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eBay Inc  (NAS:EBAY) E10: $2.24 (As of Sep. 2017)

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. E10 is the average of the inflation adjusted earnings of a company over the past 10 years.

eBay Inc's adjusted earnings per share data for the three months ended in Sep. 2017 was $0.480. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $2.24 for the trailing ten years ended in Sep. 2017.

As of today, eBay Inc's current stock price is $37.60. eBay Inc's E10 for the quarter that ended in Sep. 2017 was $2.24. eBay Inc's Shiller PE Ratio of today is 16.79.

During the past 13 years, the highest Shiller PE Ratio of eBay Inc was 42.47. The lowest was 8.78. And the median was 16.44.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

eBay Inc Annual Data

Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.25 1.45 1.38 1.45 2.02

eBay Inc Quarterly Data

Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.53 2.02 2.10 2.09 2.24

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. When we calculate the today's Shiller P/E ratio of a stock, we use today’s price divided by E10.

What is E10? How do we calculate E10?

E10 is the average of the inflation adjusted earnings of a company over the past 10 years. Let's use an example to explain.

If we want to calculate the E10 of Wal-Mart (WMT) for Dec. 31, 2010, we need to have the inflation data and the earnings from 2001 through 2010.

We adjusted the earnings of 2001 earnings data with the total inflation from 2001 through 2010 to the equivalent earnings in 2010. If the total inflation from 2001 to 2010 is 40%, and Wal-Mart earned $1 a share in 2001, then the 2001's equivalent earnings in 2010 is $1.4 a share. If Wal-Mart earns $1 again in 2002, and the total inflation from 2002 through 2010 is 35%, then the equivalent 2002 earnings in 2010 is $1.35. So on and so forth, you get the equivalent earnings of past 10 years. Then you add them together and divided the sum by 10 to get E10.

For example, eBay Inc's adjusted earnings per share data for the three months ended in Sep. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Sep. 2017 (Change)*Current CPI (Sep. 2017)
=0.48/246.819*246.819
=0.480

Current CPI (Sep. 2017) = 246.819.

eBay Inc Quarterly Data

per share eps CPI Adj_EPS
200712 0.380 210.036 0.447
200803 0.340 213.528 0.393
200806 0.350 218.815 0.395
200809 0.380 218.783 0.429
200812 0.290 210.228 0.340
200903 0.280 212.709 0.325
200906 0.250 215.693 0.286
200909 0.270 215.969 0.309
200912 1.030 215.949 1.177
201003 0.300 217.631 0.340
201006 0.310 217.965 0.351
201009 0.330 218.439 0.373
201012 0.420 219.179 0.473
201103 0.360 223.467 0.398
201106 0.220 225.722 0.241
201109 0.370 226.889 0.403
201112 1.510 225.672 1.651
201203 0.440 229.392 0.473
201206 0.530 229.478 0.570
201209 0.450 231.407 0.480
201212 0.570 229.601 0.613
201303 0.510 232.773 0.541
201306 0.490 233.504 0.518
201309 0.530 234.149 0.559
201312 0.650 233.049 0.688
201403 -1.820 236.293 -1.901
201406 0.530 238.343 0.549
201409 0.540 238.031 0.560
201412 0.820 234.812 0.862
201503 0.510 236.119 0.533
201506 0.070 238.638 0.072
201509 0.450 237.945 0.467
201512 0.400 236.525 0.417
201603 0.410 238.132 0.425
201606 0.380 241.018 0.389
201609 0.360 241.428 0.368
201612 5.200 241.432 5.316
201703 0.940 243.801 0.952
201706 0.020 244.955 0.020
201709 0.480 246.819 0.480

Add all the adjusted EPS together and divide 10 will get our e10.


Explanation

If a company grows much fast than inflation, E10 may underestimate the company's earnings power. Shiller PE Ratio can seem to be too high even the actual P/E is low.

For the Shiller P/E, the earnings of the past 10 years are inflation-adjusted and averaged. The result is used for P/E calculation. Since it looks at the average over the last 10 years, the Shiller P/E is also called PE10.

The Shiller P/E was first used by professor Robert Shiller to measure the valuation of the overall market. The same calculation is applied here to individual companies.

eBay Inc's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=37.60/2.24
=16.79

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

During the past 13 years, the highest Shiller P/E Ratio of eBay Inc was 42.47. The lowest was 8.78. And the median was 16.44.


Be Aware

Shiller PE Ratio works better for cyclical companies. It gives you a better idea on the company's real earnings power.


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