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Electro Rent Corp  (NAS:ELRC) PS Ratio: 1.93 (As of Today)

As of today, Electro Rent Corp's share price is $15.50. Electro Rent Corp's Revenue per Share for the trailing twelve months (TTM) ended in Feb. 2016 was $8.05. Hence, Electro Rent Corp's P/S Ratio for today is 1.93.

Electro Rent Corp's Revenue per Sharefor the three months ended in Feb. 2016 was $1.62. Its Revenue per Share for the trailing twelve months (TTM) ended in Feb. 2016 was $8.05.


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.

Electro Rent Corp Annual Data

May06 May07 May08 May09 May10 May11 May12 May13 May14 May15
PS Ratio Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.61 1.34 1.66 1.63 1.05

Electro Rent Corp Quarterly Data

May11 Aug11 Nov11 Feb12 May12 Aug12 Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16
PS Ratio 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 1.32 1.05 1.13 1.18 1.18

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

The P/S Ratio is another ratio widely used to value stocks. It was first used by Ken Fisher.

Electro Rent Corp's P/S Ratio for today is calculated as

P/S Ratio=Share Price/Revenue per Share (TTM)
=15.50/8.05
=1.93

Electro Rent Corp's Share Price of today is $15.50.
Electro Rent Corp's Revenue per Share for the trailing twelve months (TTM) ended in Feb. 2016 was 2.478 (May. 2015 ) + 2.184 (Aug. 2015 ) + 1.772 (Nov. 2015 ) + 1.616 (Feb. 2016 ) = $8.05.

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

It can also be calculated from the numbers for the whole company:


The revenue here is for the trailing 12 months.


Explanation

The P/S ratio is an excellent valuation indicator if you want to compare a stock with its historical valuation or with the stocks in the same industry. The P/S ratio works especially well when you want to compare the stock's current valuation with its historical valuation. The P/S ratio is a great valuation tool for evaluating cyclical businesses where the P/E ratio works poorly. It works the best when comparing the current valuation with the historical valuation because over time, a company's profit margin tends to revert to the mean.

When the P/S ratio is applied to the whole stock market, it can be used to evaluate the current market valuation and projected returns. In this case, the price is the total market cap of all stocks that are traded, and sales are the GDP of the country. This is how Warren Buffett estimates the broad market valuation and project future returns.

Similar to the Price/Earnings ratio and Price/Cash Flow or Price/Free Cash Flow, the P/E ratio measures the valuation based on the earning power of the company. This is where it is different from Price/Book ratio, which measures the valuation based on the company's balance sheet.


Be Aware

The P/S ratio does not tell you how cheap or expensive the stock is. It cannot be used to compare companies in different industries. It works better for companies within the same industry because these companies tend to have similar capital structures and profit margins. It works the best when comparing a company with itself in the past.


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