Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.
As of today (2024-04-29), the stock price of ARI Network Services is $14.30. ARI Network Services's graham number for the quarter that ended in Apr. 2017 was $N/A. Therefore, ARI Network Services's Price to Graham Number ratio for today is N/A.
The historical rank and industry rank for ARI Network Services's Graham Number or its related term are showing as below:
ARIS's Price-to-Graham-Number is not ranked *
in the Software industry.
Industry Median: 2.23 * Ranked among companies with meaningful Price-to-Graham-Number only.
Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.
ARI Network Services Graham Number Historical Data
The historical data trend for ARI Network Services's Graham Number can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of ARI Network Services's Graham Number
For the Software - Application subindustry, ARI Network Services's Price-to-Graham-Number, along with its competitors' market caps and Price-to-Graham-Number data, can be viewed below:
* 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. Note that "N/A" values will not show up in the chart.
ARI Network Services's Price-to-Graham-Number Distribution in the Software Industry
For the Software industry and Technology sector, ARI Network Services's Price-to-Graham-Number distribution charts can be found below:
* The bar in red indicates where ARI Network Services's Price-to-Graham-Number falls into.
ARI Network Services Graham Number Calculation
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
ARI Network Services's Graham Number for the fiscal year that ended in Jul. 2016 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
ARI Network Services (NAS:ARIS) Graham Number Explanation
Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:
Current price should not be more than 15 times average earnings of the past three years.
Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)
Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.
In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.
ARI Network Services's Price to Graham number Ratio for today is calculated as
Price to Graham number
=
Share Price (Today)
/
Graham number (Q: Apr. 2017 )
=
14.30
/
N/A
=
N/A
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Please keep these in mind:
1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.
ARI Network Services Graham Number Related Terms
Thank you for viewing the detailed overview of ARI Network Services's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
ARI Network Services (ARI Network Services) Business Description
ARI Network Services Inc was incorporated in Wisconsin in 1981. The Company creates software-as-a-service and data-as-a-service solutions that help equipment manufacturers, distributors and dealers in selected vertical markets Sell More Stuff!TM online and in-store. Its SaaS and DaaS solutions include eCommerce-enabled websites, which provide a web presence for dealers and serve as a platform for driving leads and eCommerce sales, eCatalogs, which drive sales of inventory and PG&A both online and within the dealership, and lead management software designed to increase sales for dealers through more efficient management and improved closure of leads. Its SaaS and DaaS solutions are sold through its internal sales force and are comprised of recurring hosting, license and eCatalog subscriptions. Customers typically sign annual, auto-renewing contracts. Its eCommerce-enabled websites provide consumers with information about a dealership and its product lines and allow consumers to obtain information on whole goods and purchase PG&A through the dealers website 24 hours a day, 7 days a week. Its website solutions are tailored to each of the vertical markets it serves and tightly integrated with its electronic library of inventory and PG&A content. The Company also offers a mobile solution that allows dealers websites to be fully functional on smart mobile phones. Its eCatalog solutions, which encompass its PartSmart, PartSmart Web and PartStream products, leverage its library of electronic whole goods and PG&A content to allow distributors and dealers to view and interact with this information to efficiently support the sales and service of equipment. Its SaaS solution, Footsteps, is designed to efficiently manage and nurture generated leads, increasing conversion rates and ultimately revenues for its customers. It also offers solutions, which include search engine marketing, software and website customization services, website hosting, and document transfer and communication services. Competition for its products and services varies by product and by vertical market. In eCatalogs, it competes with Snap-on Business Solutions, which designs and delivers eCatalogs, accessory sales tools, and manufacturer network development services, mainly to the automotive, powersports, OPE, construction, agriculture and mining markets.
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