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Red Hat Inc  (NYSE:RHT) Median PS Value: $109.39 (As of Today)

This valuation method assumes that the stock valuation will revert to its historical mean in terms of Price/Sales Ratio. The reason we use PS Ratio instead of PE Ratio or PB Ratio is because Price/Sales Ratio is independent of profit margin, and can be applied to a broader range of situations.

Median P/S Value is calculated as trailing twelve months (TTM) Revenue per Share times 10-Year median P/S ratio. Red Hat Inc's Revenue per Share for the trailing twelve months (TTM) ended in Aug. 2017 was $14.508. Red Hat Inc's 10-Year median P/S ratio is 7.54. Therefore, the Median P/S Value for today is $109.39.

As of today, Red Hat Inc's share price is $121.80. Red Hat Inc's median P/S value is $109.39. Therefore, Red Hat Inc's Price to Median P/S Value Ratio for today is 1.11.

NYSE:RHT' s Price-to-Median-PS-Value Range Over the Past 10 Years
Min: 0.42   Max: 48.17
Current: 1.11

0.42
48.17

During the past 13 years, the highest Price to Median P/S Value Ratio of Red Hat Inc was 48.17. The lowest was 0.42. And the median was 1.18.

NYSE:RHT's Price-to-Median-PS-Value is ranked higher than
60% of the 1639 Companies
in the Global industry.

( Industry Median: 1.12 vs. NYSE:RHT: 1.11 )

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.

Red Hat Inc Annual Data

Feb08 Feb09 Feb10 Feb11 Feb12 Feb13 Feb14 Feb15 Feb16 Feb17
Median PS Value Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 51.19 60.28 71.36 83.18 99.43

Red Hat Inc Quarterly Data

Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17
Median PS Value 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 91.25 95.43 99.43 104.26 109.39

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

Red Hat Inc's Median P/S Value for today is calculated as

Median P/S Value=Total Annual Sales / Shares Outstanding*10-Year Median P/S Ratio
=Revenue per Share (TTM)*10-Year Median P/S Ratio
=14.508*7.54
=109.39

10-Year Median P/S Ratio is 7.54.
Red Hat Inc's Revenue per Share for the trailing twelve months (TTM) ended in Aug. 2017 was 3.368 (Nov. 2016 ) + 3.465 (Feb. 2017 ) + 3.723 (May. 2017 ) + 3.952 (Aug. 2017 ) = $14.508.

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


Explanation

This valuation method assumes that the stock valuation will revert to its historical mean in terms of Price/Sales Ratio. The reason we use PS Ratio instead of PE Ratio or PB Ratio is because Price/Sales Ratio is independent of profit margin, and can be applied to a broader range of situations.

It also assumes that over time the profit margin is constant. If a company increases its profit margin to a sustainable level, this value might under-estimate its value. If it has permanent declined profit margins, this may over-estimate the company's value.

Red Hat Inc's Price to Median P/S Value Ratio for today is calculated as

Price to Median P/S Value=Share Price/Median P/S Value
=121.80/109.39
=1.11

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


Related Terms


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