Price to Sales (P/S)
since 2005
Calculation
McKesson Corp., P/S, long-term trends, calculation
| P/S | = | Share price1, 2, 3 | ÷ | Sales per share1 | Sales per share1 | = | Revenues1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| May 5, 2016 | 0.20 | = | 172.70 | ÷ | 848.30 | 848.30 | = | 190,884 | ÷ | 225,020,523 | |
| May 12, 2015 | 0.30 | = | 229.55 | ÷ | 773.23 | 773.23 | = | 179,045 | ÷ | 231,553,531 | |
| May 14, 2014 | 0.30 | = | 178.20 | ÷ | 596.80 | 596.80 | = | 137,609 | ÷ | 230,576,753 | |
| May 7, 2013 | 0.20 | = | 108.63 | ÷ | 540.38 | 540.38 | = | 122,455 | ÷ | 226,611,092 | |
| May 2, 2012 | 0.17 | = | 90.17 | ÷ | 521.39 | 521.39 | = | 122,734 | ÷ | 235,397,188 | |
| May 5, 2011 | 0.19 | = | 82.84 | ÷ | 444.57 | 444.57 | = | 112,084 | ÷ | 252,120,037 | |
| May 4, 2010 | 0.17 | = | 67.54 | ÷ | 400.54 | 400.54 | = | 108,702 | ÷ | 271,391,624 | |
| May 5, 2009 | 0.10 | = | 38.18 | ÷ | 392.87 | 392.87 | = | 106,632 | ÷ | 271,418,501 | |
| May 7, 2008 | 0.16 | = | 57.36 | ÷ | 366.79 | 366.79 | = | 101,703 | ÷ | 277,279,250 | |
| May 9, 2007 | 0.19 | = | 59.78 | ÷ | 312.84 | 312.84 | = | 92,977 | ÷ | 297,204,662 | |
| May 16, 2006 | 0.17 | = | 49.37 | ÷ | 289.52 | 289.52 | = | 88,050 | ÷ | 304,120,397 | |
| May 13, 2005 | 0.14 | = | 37.68 | ÷ | 268.40 | 268.40 | = | 80,515 | ÷ | 299,979,779 |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31), 10-K (reporting date: 2010-03-31), 10-K (reporting date: 2009-03-31), 10-K (reporting date: 2008-03-31), 10-K (reporting date: 2007-03-31), 10-K (reporting date: 2006-03-31), 10-K (reporting date: 2005-03-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of McKesson Corp. Annual Report.
The financial trajectory from 2005 to 2016 is characterized by consistent growth in sales per share, while the Price to Sales (P/S) ratio exhibited periodic volatility and an overall low valuation profile typical of the industry.
- Sales Per Share Trend
- A continuous upward trajectory in sales per share is observed, rising from 268.40 US$ in 2005 to 848.30 US$ by 2016. This indicates a sustained expansion in top-line revenue generation on a per-share basis throughout the eleven-year period.
- P/S Ratio Valuation Cycles
- The P/S ratio remained below 0.35 throughout the entire period, reflecting a low multiple of sales. The ratio experienced an initial rise from 0.14 in 2005 to 0.19 in 2007, followed by a sharp contraction to a period low of 0.10 in 2009, coinciding with a significant decline in share price despite increasing sales per share.
- Valuation Expansion and Correction
- A period of valuation expansion occurred between 2010 and 2015, with the P/S ratio peaking at 0.30 in 2014 and 2015. This peak represents a doubling of the valuation multiple relative to the 2009 trough. However, by 2016, the ratio corrected to 0.20, driven by a decrease in share price from 229.55 US$ to 172.70 US$ even as sales per share reached their highest point of 848.30 US$.
- Correlation Between Price and Sales
- While both share price and sales per share generally trended upward, the P/S ratio demonstrates that the market valuation did not always move in lockstep with revenue growth. The divergence is most evident in 2009 and 2016, where share price declines led to a compression of the P/S ratio despite the consistent growth in sales performance.
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Comparison to Competitors
McKesson Corp., P/S, long-term trends, comparison to competitors
| McKesson Corp. | Abbott Laboratories | Elevance Health Inc. | Intuitive Surgical Inc. | Medtronic PLC | UnitedHealth Group Inc. | |
|---|---|---|---|---|---|---|
| May 5, 2016 | 0.20 | 3.70 | 0.51 | 10.11 | 4.07 | 0.83 |
| May 12, 2015 | 0.30 | 2.78 | 0.42 | 8.46 | 5.36 | 0.68 |
| May 14, 2014 | 0.30 | 3.53 | 0.54 | 8.80 | 3.74 | 0.80 |
| May 7, 2013 | 0.20 | 2.74 | 0.35 | 6.76 | 3.13 | 0.57 |
| May 2, 2012 | 0.17 | 1.38 | 0.31 | 10.56 | 2.36 | 0.53 |
| May 5, 2011 | 0.19 | 2.27 | 0.37 | 11.00 | 2.60 | 0.55 |
| May 4, 2010 | 0.17 | 2.06 | 0.44 | 9.15 | 2.48 | 0.50 |
| May 5, 2009 | 0.10 | 2.74 | 0.43 | 12.01 | 2.54 | 0.44 |
| May 7, 2008 | 0.16 | 2.83 | 0.33 | 5.14 | 4.30 | 0.43 |
| May 9, 2007 | 0.19 | 3.31 | 0.67 | 19.21 | 4.74 | 0.81 |
| May 16, 2006 | 0.17 | 3.68 | 0.89 | 11.23 | 4.81 | 1.03 |
| May 13, 2005 | 0.14 | 3.02 | 1.14 | 15.19 | 6.30 | 1.78 |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31), 10-K (reporting date: 2010-03-31), 10-K (reporting date: 2009-03-31), 10-K (reporting date: 2008-03-31), 10-K (reporting date: 2007-03-31), 10-K (reporting date: 2006-03-31), 10-K (reporting date: 2005-03-31).
Comparison to Sector (Health Care Equipment & Services)
McKesson Corp., P/S, long-term trends, comparison to sector (health care equipment & services)
| McKesson Corp. | Health Care Equipment & Services | |
|---|---|---|
| May 5, 2016 | 0.20 | 1.30 |
| May 12, 2015 | 0.30 | 1.17 |
| May 14, 2014 | 0.30 | 1.23 |
| May 7, 2013 | 0.20 | 0.95 |
| May 2, 2012 | 0.17 | 0.85 |
| May 5, 2011 | 0.19 | 1.04 |
| May 4, 2010 | 0.17 | 0.96 |
| May 5, 2009 | 0.10 | 1.02 |
| May 7, 2008 | 0.16 | 1.08 |
| May 9, 2007 | 0.19 | 1.48 |
| May 16, 2006 | 0.17 | 1.64 |
| May 13, 2005 | 0.14 | 2.17 |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31), 10-K (reporting date: 2010-03-31), 10-K (reporting date: 2009-03-31), 10-K (reporting date: 2008-03-31), 10-K (reporting date: 2007-03-31), 10-K (reporting date: 2006-03-31), 10-K (reporting date: 2005-03-31).
Comparison to Industry (Health Care)
McKesson Corp., P/S, long-term trends, comparison to industry (health care)
| McKesson Corp. | Health Care | |
|---|---|---|
| May 5, 2016 | 0.20 | 2.80 |
| May 12, 2015 | 0.30 | 2.72 |
| May 14, 2014 | 0.30 | 3.08 |
| May 7, 2013 | 0.20 | 2.81 |
| May 2, 2012 | 0.17 | 2.20 |
| May 5, 2011 | 0.19 | 1.90 |
| May 4, 2010 | 0.17 | 1.80 |
| May 5, 2009 | 0.10 | 2.08 |
| May 7, 2008 | 0.16 | 1.70 |
| May 9, 2007 | 0.19 | 2.42 |
| May 16, 2006 | 0.17 | 2.85 |
| May 13, 2005 | 0.14 | 3.17 |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31), 10-K (reporting date: 2010-03-31), 10-K (reporting date: 2009-03-31), 10-K (reporting date: 2008-03-31), 10-K (reporting date: 2007-03-31), 10-K (reporting date: 2006-03-31), 10-K (reporting date: 2005-03-31).