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Netflix E10

: $1.11 (As of Dec. 2019)
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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.

Netflix's adjusted earnings per share data for the three months ended in Dec. 2019 was $1.300. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.11 for the trailing ten years ended in Dec. 2019.

As of today (2020-03-29), Netflix's current stock price is $357.12. Netflix's E10 for the quarter that ended in Dec. 2019 was $1.11. Netflix's Shiller PE Ratio of today is 321.73.

During the past 13 years, the highest Shiller PE Ratio of Netflix was 673.92. The lowest was 38.50. And the median was 299.59.


Netflix E10 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.

Netflix Annual Data
Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.31 0.34 0.46 0.72 1.11

Netflix Quarterly Data
Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19
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 0.72 0.80 0.85 0.99 1.11

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.


Netflix E10 Distribution

* The bar in red indicates where Netflix's E10 falls into.



Netflix E10 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, Netflix's adjusted earnings per share data for the three months ended in Dec. 2019 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Dec. 2019 (Change)*Current CPI (Dec. 2019)
=1.3/257.14*257.14
=1.300

Current CPI (Dec. 2019) = 257.14.

Netflix Quarterly Data

per share eps CPI Adj_EPS
201003 0.084 217.630 0.100
201006 0.114 217.970 0.135
201009 0.100 218.440 0.118
201012 0.124 219.180 0.146
201103 0.159 223.470 0.182
201106 0.180 225.720 0.205
201109 0.166 226.890 0.188
201112 0.104 225.670 0.119
201203 -0.011 229.390 -0.013
201206 0.016 229.480 0.018
201209 0.019 231.410 0.021
201212 0.019 229.600 0.021
201303 0.007 232.770 0.008
201306 0.070 233.500 0.077
201309 0.074 234.150 0.082
201312 0.113 233.050 0.125
201403 0.123 236.290 0.134
201406 0.160 238.340 0.173
201409 0.140 238.030 0.151
201412 0.193 234.810 0.211
201503 0.050 236.120 0.054
201506 0.060 238.640 0.065
201509 0.070 237.940 0.076
201512 0.100 236.530 0.109
201603 0.060 238.130 0.065
201606 0.090 241.020 0.096
201609 0.120 241.430 0.128
201612 0.150 241.430 0.160
201703 0.400 243.800 0.422
201706 0.150 244.960 0.157
201709 0.290 246.820 0.302
201712 0.410 246.520 0.428
201803 0.640 249.550 0.659
201806 0.850 251.990 0.867
201809 0.890 252.440 0.907
201812 0.300 251.230 0.307
201903 0.760 254.200 0.769
201906 0.600 256.140 0.602
201909 1.470 256.760 1.472
201912 1.300 257.140 1.300

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


Netflix  (NAS:NFLX) 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.

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

Shiller PE Ratio=Share Price/E10
=357.12/1.11
=321.73

* 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 Netflix was 673.92. The lowest was 38.50. And the median was 299.59.


Be Aware

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


Netflix E10 Related Terms

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