Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
Current Valuation Ratios
Marriott International Inc., current price multiples
| Marriott International Inc. | Airbnb Inc. | Booking Holdings Inc. | Chipotle Mexican Grill Inc. | DoorDash, Inc. | McDonald’s Corp. | Starbucks Corp. | ||
|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||
| Current share price (P) | $82.31 | |||||||
| No. shares of common stock outstanding | 324,255,928 | |||||||
| Growth rate (g) | 65.04% | |||||||
| Earnings per share (EPS) | $3.93 | |||||||
| Next year expected EPS | $6.48 | |||||||
| Operating profit per share | $5.55 | |||||||
| Sales per share | $64.68 | |||||||
| Book value per share (BVPS) | $2.17 | |||||||
| Valuation Ratios (Price Multiples) | ||||||||
| Price to earnings (P/E) | 20.97 | 36.10 | 21.89 | 26.38 | 86.90 | 19.59 | 57.51 | |
| Price to next year expected earnings | 12.70 | 27.82 | 11.91 | 18.78 | 93.39 | — | — | |
| Price-earnings-growth (PEG) | 0.32 | 1.21 | 0.26 | 0.65 | — | — | — | |
| Price to operating profit (P/OP) | 14.83 | 35.63 | 13.40 | 20.92 | 112.39 | 13.53 | 36.36 | |
| Price to sales (P/S) | 1.27 | 7.41 | 4.39 | 3.40 | 5.92 | 6.24 | 2.87 | |
| Price to book value (P/BV) | 37.97 | 11.06 | — | 14.31 | 8.10 | — | — | |
Based on: 10-K (reporting date: 2019-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Marriott International Inc., historical price multiples
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
The valuation multiples between 2015 and 2019 demonstrate a general increase in market premiums, characterized by significant volatility in earnings-based ratios and an aggressive expansion in the book value multiple.
- Earnings and Operating Profit Multiples
- The Price to Earnings (P/E) and Price to Operating Profit (P/OP) ratios exhibit closely correlated movements. Both ratios experienced a sharp increase from 2015 to 2016, with the P/E ratio rising from 19.16 to 43.27 and the P/OP ratio climbing from 12.19 to 24.67. A subsequent contraction occurred through 2018, where the P/E ratio declined to 22.17 and the P/OP ratio dropped to 17.87, before both rebounded in 2019 to 30.47 and 21.55, respectively.
- Revenue Valuation
- The Price to Sales (P/S) ratio showed a steady increase from 1.14 in 2015 to a peak of 2.21 in 2017. Following this peak, the ratio experienced a marginal downward correction, ending the period at 1.85 in 2019, indicating a period of relative stabilization in the premium attributed to revenue generation.
- Book Value Expansion
- The Price to Book Value (P/BV) ratio displays the most dramatic trend of the analyzed metrics. From a starting value of 6.30 in 2016, the ratio grew consistently to 13.54 in 2017 and 19.00 in 2018. A substantial acceleration is observed in 2019, with the ratio surging to 55.18, suggesting a significant divergence between the market capitalization and the underlying accounting book value.
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Price to Earnings (P/E)
Marriott International Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 324,214,545 | 339,668,839 | 357,437,289 | 383,561,428 | 253,481,935 | |
| Selected Financial Data (US$) | ||||||
| Net income (in millions) | 1,273) | 1,907) | 1,372) | 780) | 859) | |
| Earnings per share (EPS)2 | 3.93 | 5.61 | 3.84 | 2.03 | 3.39 | |
| Share price1, 3 | 119.64 | 124.45 | 141.29 | 87.99 | 64.94 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 30.47 | 22.17 | 36.81 | 43.27 | 19.16 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Airbnb Inc. | — | — | — | — | — | |
| Booking Holdings Inc. | — | — | — | — | — | |
| Chipotle Mexican Grill Inc. | — | — | — | — | — | |
| DoorDash, Inc. | — | — | — | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= 1,273,000,000 ÷ 324,214,545 = 3.93
3 Closing price as at the filing date of Marriott International Inc. Annual Report.
4 2019 Calculation
P/E ratio = Share price ÷ EPS
= 119.64 ÷ 3.93 = 30.47
5 Click competitor name to see calculations.
The five-year period from 2015 to 2019 is characterized by significant volatility in valuation multiples, driven by divergent movements between the share price and earnings per share (EPS).
- Share Price Trends
- A strong upward trajectory is observed between 2015 and 2017, with the share price increasing from 64.94 US$ to a peak of 141.29 US$. Following this peak, a gradual moderation occurred, with the price settling at 119.64 US$ by the end of 2019.
- Earnings Per Share (EPS) Performance
- Earnings exhibited substantial fluctuations throughout the period. A notable decline occurred in 2016, with EPS dropping to 2.03 US$, followed by a recovery and growth phase that peaked at 5.61 US$ in 2018. A contraction is evident in 2019, where EPS fell to 3.93 US$.
- Price-to-Earnings (P/E) Ratio Dynamics
- The P/E ratio demonstrates a high degree of variance, shifting from 19.16 in 2015 to a peak of 43.27 in 2016. This expansion was driven by the combination of rising share prices and declining earnings. A compression phase followed, with the ratio reaching its lowest point since 2015 at 22.17 in 2018, coinciding with peak earnings. The ratio increased again to 30.47 in 2019, reflecting a decrease in earnings while the share price remained relatively stable.
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Price to Operating Profit (P/OP)
Marriott International Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 324,214,545 | 339,668,839 | 357,437,289 | 383,561,428 | 253,481,935 | |
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | 1,800) | 2,366) | 2,359) | 1,368) | 1,350) | |
| Operating profit per share2 | 5.55 | 6.97 | 6.60 | 3.57 | 5.33 | |
| Share price1, 3 | 119.64 | 124.45 | 141.29 | 87.99 | 64.94 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 21.55 | 17.87 | 21.41 | 24.67 | 12.19 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Airbnb Inc. | — | — | — | — | — | |
| Booking Holdings Inc. | — | — | — | — | — | |
| Chipotle Mexican Grill Inc. | — | — | — | — | — | |
| DoorDash, Inc. | — | — | — | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 1,800,000,000 ÷ 324,214,545 = 5.55
3 Closing price as at the filing date of Marriott International Inc. Annual Report.
4 2019 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 119.64 ÷ 5.55 = 21.55
5 Click competitor name to see calculations.
Between 2015 and 2019, the share price exhibited an overall upward trend before entering a phase of moderate correction. The price rose from 64.94 US$ in 2015 to a peak of 141.29 US$ in 2017, eventually settling at 119.64 US$ by the end of 2019. Operating profit per share demonstrated significant volatility throughout this period, characterized by a sharp decline in 2016, a strong recovery through 2018, and a subsequent decrease in 2019.
- Price to Operating Profit (P/OP) Volatility
- The P/OP ratio experienced a substantial increase between 2015 and 2016, rising from 12.19 to 24.67. This spike was primarily driven by the divergence between an increasing share price and a decreasing operating profit per share, which fell to 3.57 US$ during that year.
- Multiple Compression Phase
- Following the 2016 peak, a trend of multiple compression was observed from 2017 through 2018. The P/OP ratio declined from 24.67 to 17.87, as growth in operating profit per share outpaced the growth in share price during the 2017-2018 window.
- Valuation Rebound
- In 2019, the P/OP ratio expanded again to 21.55. This increase occurred despite a simultaneous decline in both the share price and operating profit per share, suggesting that the reduction in operating profit was more pronounced than the decline in market price, thereby inflating the valuation multiple.
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Price to Sales (P/S)
Marriott International Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 324,214,545 | 339,668,839 | 357,437,289 | 383,561,428 | 253,481,935 | |
| Selected Financial Data (US$) | ||||||
| Revenues (in millions) | 20,972) | 20,758) | 22,894) | 17,072) | 14,486) | |
| Sales per share2 | 64.69 | 61.11 | 64.05 | 44.51 | 57.15 | |
| Share price1, 3 | 119.64 | 124.45 | 141.29 | 87.99 | 64.94 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 1.85 | 2.04 | 2.21 | 1.98 | 1.14 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Airbnb Inc. | — | — | — | — | — | |
| Booking Holdings Inc. | — | — | — | — | — | |
| Chipotle Mexican Grill Inc. | — | — | — | — | — | |
| DoorDash, Inc. | — | — | — | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
Sales per share = Revenues ÷ No. shares of common stock outstanding
= 20,972,000,000 ÷ 324,214,545 = 64.69
3 Closing price as at the filing date of Marriott International Inc. Annual Report.
4 2019 Calculation
P/S ratio = Share price ÷ Sales per share
= 119.64 ÷ 64.69 = 1.85
5 Click competitor name to see calculations.
Between 2015 and 2019, the price-to-sales (P/S) ratio exhibited a trajectory of rapid expansion followed by a gradual correction. The ratio increased from 1.14 in 2015 to a peak of 2.21 in 2017, before moderating to 1.85 by the end of 2019.
- Share Price Volatility
- A strong upward trend in share price was observed from 2015 to 2017, with the value rising from US$ 64.94 to a peak of US$ 141.29. Following this peak, the share price underwent a moderate decline, closing at US$ 119.64 in 2019.
- Sales per Share Fluctuations
- Revenue per share showed inconsistency during the initial period, dropping from US$ 57.15 in 2015 to US$ 44.51 in 2016. A significant recovery occurred in 2017, with sales per share reaching US$ 64.05 and maintaining a relatively stable range through 2019, ending at US$ 64.69.
- P/S Ratio Analysis
- The expansion of the P/S ratio in 2016 to 1.98 is particularly notable as it occurred despite a decrease in sales per share, indicating that market valuation grew independently of revenue performance. The peak ratio in 2017 reflects a convergence of maximum share price and strong revenue recovery. The subsequent decline in the P/S ratio through 2018 and 2019 suggests a contraction in the valuation multiple, as the share price decreased more rapidly than the stable growth seen in sales per share.
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Price to Book Value (P/BV)
Marriott International Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 324,214,545 | 339,668,839 | 357,437,289 | 383,561,428 | 253,481,935 | |
| Selected Financial Data (US$) | ||||||
| Shareholders’ equity (deficit) (in millions) | 703) | 2,225) | 3,731) | 5,357) | (3,590) | |
| Book value per share (BVPS)2 | 2.17 | 6.55 | 10.44 | 13.97 | -14.16 | |
| Share price1, 3 | 119.64 | 124.45 | 141.29 | 87.99 | 64.94 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 55.18 | 19.00 | 13.54 | 6.30 | — | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Airbnb Inc. | — | — | — | — | — | |
| Booking Holdings Inc. | — | — | — | — | — | |
| Chipotle Mexican Grill Inc. | — | — | — | — | — | |
| DoorDash, Inc. | — | — | — | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
BVPS = Shareholders’ equity (deficit) ÷ No. shares of common stock outstanding
= 703,000,000 ÷ 324,214,545 = 2.17
3 Closing price as at the filing date of Marriott International Inc. Annual Report.
4 2019 Calculation
P/BV ratio = Share price ÷ BVPS
= 119.64 ÷ 2.17 = 55.18
5 Click competitor name to see calculations.
A significant divergence is observed between the market valuation and the book value per share from 2015 to 2019. While the share price remained elevated after an initial period of growth, the book value per share experienced a consistent decline, resulting in an exponential increase in the price-to-book value (P/BV) ratio.
- Share Price Performance
- The share price exhibited a strong upward trajectory between 2015 and 2017, rising from 64.94 US$ to a peak of 141.29 US$. A moderate correction occurred in 2018 and 2019, with the price stabilizing at 119.64 US$ by the end of 2019, maintaining a substantial net increase relative to 2015 levels.
- Book Value Per Share (BVPS) Evolution
- A transition occurred in 2016 when the book value per share shifted from a negative position of -14.16 US$ to a positive 13.97 US$. Following this recovery, a persistent downward trend is evident, with the BVPS decreasing annually to reach 2.17 US$ by December 31, 2019.
- Price to Book Value (P/BV) Ratio Analysis
- The P/BV ratio expanded aggressively from 6.30 in 2016 to 55.18 in 2019. This escalation was primarily driven by the diminishing book value per share rather than increases in the share price during the final three years of the period. Such a high multiple indicates that the market assigns a premium to the company that far exceeds its accounting net asset value.
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