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
Edwards Lifesciences Corp., current price multiples
| Edwards Lifesciences Corp. | Abbott Laboratories | Elevance Health Inc. | Intuitive Surgical Inc. | Medtronic PLC | UnitedHealth Group Inc. | Health Care Equipment & Services | Health Care | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||
| Current share price (P) | $107.73 | ||||||||||
| No. shares of common stock outstanding | 623,207,437 | ||||||||||
| Growth rate (g) | 22.69% | ||||||||||
| Earnings per share (EPS) | $2.41 | ||||||||||
| Next year expected EPS | $2.96 | ||||||||||
| Operating profit per share | $2.71 | ||||||||||
| Sales per share | $8.40 | ||||||||||
| Book value per share (BVPS) | $9.36 | ||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||
| Price to earnings (P/E) | 44.67 | 26.81 | 15.25 | 49.42 | 23.58 | 27.92 | 23.82 | 31.29 | |||
| Price to next year expected earnings | 36.41 | 24.86 | 13.64 | 43.33 | 23.26 | 24.87 | 21.44 | 27.32 | |||
| Price-earnings-growth (PEG) | 1.97 | 3.42 | 1.29 | 3.52 | 17.21 | 2.28 | 2.14 | 2.15 | |||
| Price to operating profit (P/OP) | 39.72 | 21.72 | 13.14 | 47.92 | 17.51 | 17.75 | 18.63 | 26.42 | |||
| Price to sales (P/S) | 12.83 | 3.95 | 0.44 | 14.02 | 3.11 | 0.76 | 1.70 | 4.76 | |||
| Price to book value (P/BV) | 11.50 | 3.35 | 1.97 | 7.92 | 2.29 | 3.58 | 4.12 | 7.95 | |||
Based on: 10-K (reporting date: 2021-12-31).
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)
Edwards Lifesciences Corp., historical price multiples
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The valuation multiples between 2017 and 2021 exhibit a combination of steady growth in revenue-based premiums and significant volatility in earnings-based ratios. While the market's valuation of revenue showed a consistent upward trend, multiples tied to profit and book value experienced a pronounced expansion peaking in 2020, followed by a contraction in 2021.
- Earnings and Operating Profit Multiples
- The Price to Earnings (P/E) and Price to Operating Profit (P/OP) ratios followed synchronized trajectories. The P/E ratio fluctuated from 48.16 in 2017 to a peak of 66.48 in 2020, before declining to 44.67 in 2021. Similarly, the P/OP ratio rose from 25.66 in 2017 to a high of 60.98 in 2020, eventually retreating to 39.72 in 2021. This pattern indicates a significant temporary expansion in profit-based valuation during 2020.
- Revenue Valuation
- A consistent and linear upward trend is observed in the Price to Sales (P/S) ratio. This metric increased every year of the analyzed period, rising from 8.18 in 2017 to 12.83 in 2021. This trend suggests a sustained increase in the market premium attributed to the company's top-line performance.
- Asset-Based Valuation
- The Price to Book Value (P/BV) ratio remained relatively stable compared to the profit multiples. After an initial increase from 9.51 in 2017 to 11.76 in 2018, the ratio maintained a tight range, peaking at 11.97 in 2020 and ending the period at 11.50. This reflects a consistent valuation relative to the company's equity base.
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Price to Earnings (P/E)
Edwards Lifesciences Corp., historical P/E calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 623,207,437 | 624,518,873 | 627,367,734 | 623,298,987 | 630,071,124 | |
| Selected Financial Data (US$) | ||||||
| Net income (in thousands) | 1,503,100) | 823,400) | 1,046,900) | 722,200) | 583,600) | |
| Earnings per share (EPS)2 | 2.41 | 1.32 | 1.67 | 1.16 | 0.93 | |
| Share price1, 3 | 107.73 | 87.65 | 76.85 | 59.26 | 44.61 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 44.67 | 66.48 | 46.05 | 51.14 | 48.16 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Abbott Laboratories | 29.13 | — | — | — | — | |
| Elevance Health Inc. | 18.13 | — | — | — | — | |
| Intuitive Surgical Inc. | 59.94 | — | — | — | — | |
| Medtronic PLC | 46.56 | — | — | — | — | |
| UnitedHealth Group Inc. | 26.03 | — | — | — | — | |
| P/E Ratio, Sector | ||||||
| Health Care Equipment & Services | 28.98 | — | — | — | — | |
| P/E Ratio, Industry | ||||||
| Health Care | 21.55 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= 1,503,100,000 ÷ 623,207,437 = 2.41
3 Closing price as at the filing date of Edwards Lifesciences Corp. Annual Report.
4 2021 Calculation
P/E ratio = Share price ÷ EPS
= 107.73 ÷ 2.41 = 44.67
5 Click competitor name to see calculations.
The financial data from 2017 to 2021 demonstrates a consistent upward trajectory in equity value alongside fluctuating valuation multiples. While the market price of the stock increased monotonically over the five-year period, the earnings per share exhibited volatility, specifically in 2020, which significantly influenced the price-to-earnings (P/E) ratio.
- Share Price Performance
- A steady appreciation in share price is observed, rising from US$ 44.61 in 2017 to US$ 107.73 in 2021. This represents a sustained increase in market valuation, with the price more than doubling over the analyzed timeframe.
- Earnings Per Share (EPS) Trends
- EPS exhibited a general growth trend, increasing from US$ 0.93 in 2017 to US$ 1.67 in 2019. A temporary contraction occurred in 2020, where EPS fell to US$ 1.32, before a sharp recovery in 2021 to a period high of US$ 2.41.
- Price-to-Earnings (P/E) Ratio Analysis
- The P/E ratio remained relatively stable between 46.05 and 51.14 from 2017 through 2019. A significant spike to 66.48 was recorded in 2020, a result of the share price continuing to rise despite a decrease in earnings. In 2021, the ratio contracted to 44.67, the lowest level in the five-year series, as the substantial growth in EPS outpaced the increase in the share price.
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Price to Operating Profit (P/OP)
Edwards Lifesciences Corp., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 623,207,437 | 624,518,873 | 627,367,734 | 623,298,987 | 630,071,124 | |
| Selected Financial Data (US$) | ||||||
| Operating income (in thousands) | 1,690,300) | 897,600) | 1,146,800) | 748,200) | 1,095,500) | |
| Operating profit per share2 | 2.71 | 1.44 | 1.83 | 1.20 | 1.74 | |
| Share price1, 3 | 107.73 | 87.65 | 76.85 | 59.26 | 44.61 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 39.72 | 60.98 | 42.04 | 49.37 | 25.66 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Abbott Laboratories | 24.45 | — | — | — | — | |
| Elevance Health Inc. | 15.70 | — | — | — | — | |
| Intuitive Surgical Inc. | 56.11 | — | — | — | — | |
| Medtronic PLC | 37.44 | — | — | — | — | |
| UnitedHealth Group Inc. | 18.77 | — | — | — | — | |
| P/OP Ratio, Sector | ||||||
| Health Care Equipment & Services | 22.66 | — | — | — | — | |
| P/OP Ratio, Industry | ||||||
| Health Care | 18.20 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 1,690,300,000 ÷ 623,207,437 = 2.71
3 Closing price as at the filing date of Edwards Lifesciences Corp. Annual Report.
4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 107.73 ÷ 2.71 = 39.72
5 Click competitor name to see calculations.
An analysis of the valuation multiples from 2017 to 2021 reveals a period of significant share price appreciation contrasted by volatility in operating performance, leading to substantial fluctuations in the price-to-operating profit (P/OP) ratio.
- Share Price Trajectory
- A consistent and strong upward trend is observed in the share price, which rose from 44.61 USD in 2017 to 107.73 USD by the end of 2021. This represents a steady increase in market valuation over the five-year period.
- Operating Profit per Share Performance
- Operating profit per share exhibited a non-linear progression. After an initial decline from 1.74 USD in 2017 to 1.20 USD in 2018, the figure fluctuated, dipping again in 2020 to 1.44 USD before achieving a period high of 2.71 USD in 2021.
- P/OP Ratio Dynamics
- The P/OP ratio experienced significant volatility, reflecting the divergence between market pricing and operational earnings. The ratio increased sharply from 25.66 in 2017 to a peak of 60.98 in 2020. This peak was driven by the combination of rising share prices and a temporary contraction in operating profit per share.
- Valuation Correction
- A notable correction in the P/OP ratio occurred in 2021, dropping to 39.72. While the share price continued to climb, the substantial increase in operating profit per share to 2.71 USD served to compress the multiple, suggesting a realignment of the market price with the company's operational earnings capacity.
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Price to Sales (P/S)
Edwards Lifesciences Corp., historical P/S calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 623,207,437 | 624,518,873 | 627,367,734 | 623,298,987 | 630,071,124 | |
| Selected Financial Data (US$) | ||||||
| Net sales (in thousands) | 5,232,500) | 4,386,300) | 4,348,000) | 3,722,800) | 3,435,300) | |
| Sales per share2 | 8.40 | 7.02 | 6.93 | 5.97 | 5.45 | |
| Share price1, 3 | 107.73 | 87.65 | 76.85 | 59.26 | 44.61 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 12.83 | 12.48 | 11.09 | 9.92 | 8.18 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Abbott Laboratories | 4.78 | — | — | — | — | |
| Elevance Health Inc. | 0.81 | — | — | — | — | |
| Intuitive Surgical Inc. | 17.89 | — | — | — | — | |
| Medtronic PLC | 5.57 | — | — | — | — | |
| UnitedHealth Group Inc. | 1.58 | — | — | — | — | |
| P/S Ratio, Sector | ||||||
| Health Care Equipment & Services | 2.07 | — | — | — | — | |
| P/S Ratio, Industry | ||||||
| Health Care | 3.28 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Sales per share = Net sales ÷ No. shares of common stock outstanding
= 5,232,500,000 ÷ 623,207,437 = 8.40
3 Closing price as at the filing date of Edwards Lifesciences Corp. Annual Report.
4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= 107.73 ÷ 8.40 = 12.83
5 Click competitor name to see calculations.
The financial data reveals a consistent upward trajectory in valuation and operational performance from 2017 through 2021. There is a clear positive correlation between the growth in share price and the expansion of the price-to-sales multiple, suggesting increasing investor confidence and a higher premium attributed to the company's revenue generation.
- Share Price Trend
- A continuous increase in share price is observed, rising from 44.61 US$ in 2017 to 107.73 US$ by the end of 2021. This represents a substantial growth in market capitalization over the five-year period.
- Sales per Share Performance
- Sales per share exhibited steady growth, moving from 5.45 US$ in 2017 to 8.40 US$ in 2021. While the revenue per share grew consistently, the rate of increase was more moderate compared to the acceleration seen in the share price.
- Price-to-Sales (P/S) Ratio Expansion
- The P/S ratio experienced an uninterrupted climb, starting at 8.18 in 2017 and reaching 12.83 by 2021. This expansion indicates a multiple expansion where the market is willing to pay significantly more for each dollar of sales over time.
The disparity between the growth rate of the share price and the growth rate of sales per share is the primary driver of the rising P/S ratio. This pattern suggests that the valuation increase was driven not only by organic revenue growth but also by an increase in the valuation multiple applied by the market.
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Price to Book Value (P/BV)
Edwards Lifesciences Corp., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 623,207,437 | 624,518,873 | 627,367,734 | 623,298,987 | 630,071,124 | |
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in thousands) | 5,835,900) | 4,574,300) | 4,148,300) | 3,140,400) | 2,956,200) | |
| Book value per share (BVPS)2 | 9.36 | 7.32 | 6.61 | 5.04 | 4.69 | |
| Share price1, 3 | 107.73 | 87.65 | 76.85 | 59.26 | 44.61 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 11.50 | 11.97 | 11.62 | 11.76 | 9.51 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Abbott Laboratories | 5.75 | — | — | — | — | |
| Elevance Health Inc. | 3.07 | — | — | — | — | |
| Intuitive Surgical Inc. | 8.59 | — | — | — | — | |
| Medtronic PLC | 3.26 | — | — | — | — | |
| UnitedHealth Group Inc. | 6.27 | — | — | — | — | |
| P/BV Ratio, Sector | ||||||
| Health Care Equipment & Services | 5.01 | — | — | — | — | |
| P/BV Ratio, Industry | ||||||
| Health Care | 5.48 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= 5,835,900,000 ÷ 623,207,437 = 9.36
3 Closing price as at the filing date of Edwards Lifesciences Corp. Annual Report.
4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= 107.73 ÷ 9.36 = 11.50
5 Click competitor name to see calculations.
Between 2017 and 2021, a consistent upward trajectory is observed in both the market valuation and the underlying book value per share. The share price grew at a rate that initially outpaced the increase in book value, leading to an expansion of the price-to-book multiple, which then transitioned into a period of relative stability.
- Share Price Appreciation
- The market price per share experienced significant growth over the five-year period, increasing from 44.61 USD in 2017 to 107.73 USD in 2021. This represents a substantial increase in market capitalization over the observed timeframe.
- Book Value per Share (BVPS) Growth
- The book value per share demonstrated steady and uninterrupted annual growth, rising from 4.69 USD in 2017 to 9.36 USD in 2021. The near doubling of the BVPS indicates a consistent accumulation of net assets on a per-share basis.
- Price to Book Value (P/BV) Analysis
- The P/BV ratio rose from 9.51 in 2017 to 11.76 in 2018, signaling an increase in the premium that investors were willing to pay relative to the company's accounting value. From 2018 through 2021, the ratio remained remarkably stable, fluctuating within a narrow range between 11.50 and 11.97. This stability suggests that the market valuation tracked the growth of the book value proportionally during the latter four years of the period.
The sustained high P/BV ratio indicates that the market assigns significant value to intangible assets, intellectual property, or future growth prospects that are not captured in the historical cost of the book value. The alignment of share price growth with BVPS growth after 2018 reflects a consistent valuation multiple maintained by investors.
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