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MercadoLibre Inc  (NAS:MELI) E10: $1.94 (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.

MercadoLibre Inc's adjusted earnings per share data for the three months ended in Sep. 2017 was $0.630. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.94 for the trailing ten years ended in Sep. 2017.

As of today, MercadoLibre Inc's current stock price is $265.89. MercadoLibre Inc's E10 for the quarter that ended in Sep. 2017 was $1.94. MercadoLibre Inc's Shiller PE Ratio of today is 137.06.

During the past 13 years, the highest Shiller PE Ratio of MercadoLibre Inc was 156.13. The lowest was 63.56. And the median was 106.67.


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.

MercadoLibre 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 0.00 0.00 1.17 1.42 1.71

MercadoLibre 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 1.64 1.71 1.84 1.87 1.94

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, MercadoLibre 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)
=0.63/246.819*246.819
=0.630

Current CPI (Sep. 2017) = 246.819.

MercadoLibre Inc Quarterly Data

per share eps CPI Adj_EPS
200712 0.120 210.036 0.141
200803 0.050 213.528 0.058
200806 0.070 218.815 0.079
200809 0.130 218.783 0.147
200812 0.170 210.228 0.200
200903 0.120 212.709 0.139
200906 0.150 215.693 0.172
200909 0.220 215.969 0.251
200912 0.250 215.949 0.286
201003 0.220 217.631 0.250
201006 0.260 217.965 0.294
201009 0.430 218.439 0.486
201012 0.360 219.179 0.405
201103 0.320 223.467 0.353
201106 0.340 225.722 0.372
201109 0.600 226.889 0.653
201112 0.480 225.672 0.525
201203 0.450 229.392 0.484
201206 0.570 229.478 0.613
201209 0.590 231.407 0.629
201212 0.680 229.601 0.731
201303 0.400 232.773 0.424
201306 0.670 233.504 0.708
201309 0.660 234.149 0.696
201312 0.930 233.049 0.985
201403 0.690 236.293 0.721
201406 -0.580 238.343 -0.601
201409 0.760 238.031 0.788
201412 0.760 234.812 0.799
201503 0.040 236.119 0.042
201506 0.440 238.638 0.455
201509 1.030 237.945 1.068
201512 0.890 236.525 0.929
201603 0.680 238.132 0.705
201606 0.360 241.018 0.369
201609 0.880 241.428 0.900
201612 1.160 241.432 1.186
201703 1.100 243.801 1.114
201706 0.120 244.955 0.121
201709 0.630 246.819 0.630

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.

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

Shiller PE Ratio=Share Price/E10
=265.89/1.94
=137.06

* 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 MercadoLibre Inc was 156.13. The lowest was 63.56. And the median was 106.67.


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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