I have been looking at CBM, and this morning I calculated its 1YPEG:
Trailing PE of 23.13 divided by end of trailing earnings growth of -1.65 = 21.48.
Is this correct? If so, it looks like a stock I would want no part of!
Am I missing something here?
It helps if you show your work if you’re looking for confirmation that you did it right. For instance, if you wanted to ask if I calculated FB’s 1YPEG correctly, I would show my work like this:
Revenue (billions) Q1 Q2 Q3 Q4
2013 1.458 1.813 2.016 2.585
2014 2.502 2.910 3.203 3.851
2015 3.543 4.042 4.501 5.841
EPS (non-GAAP) Q1 Q2 Q3 Q4
2013 0.12 0.19 0.27 0.32
2014 0.35 0.43 0.43 0.54
2015 0.42 0.50 0.57 0.79
(2015 Q4 Earnings):
Revenue Growth (billions)
2014 Q4 TTM Revenue = 12.466
2015 Q4 TTM Revenue = 17.927
Year Over Year Revenue Growth = 43.8%, previously 42.29%,
EPS Growth (non-GAAP)
2014 Q4 TTM Earnings = 1.75
2015 Q4 TTM Earnings = 2.28
Year Over Year EPS Growth = 30.29%, previously 32.7%%
P/E = (Check Current Price) 94.45/2.28 = 41.42
1YPEG = 41.42/30.29 = 1.37
Note: This isn’t updated for correct, price, P/E, YPEG, etc. It was last calculated right after their last earnings report. I’m just trying to use this as an example of how you can show your work to let others check it.
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Thanks Matt. I appreciate your response.
What I was trying to get at, though, is why Saul apparently still likes (or at least still owns) CBM when it had what looks like a really bad end of 2015, and 1 1YPEG that looks completely out of whack.
Matt, in thinking about your response above again, I realized that I did make a mistake in my calculations, because I only used the 4th quarter earnings in my calculations, i.e.- i didn’t include the entire year.
And, having realized your error, the new answer is … ?
For CBM I take the adjusted earnings right off the press releases. For example, from the most recent Dec quarter:
Adjusted income from continuing operations was $33.0 million or $1.01 per share, compared to $20.4 million or $0.64 per share in the same period last year
What I have for 2014 was 06 + 35 + 28 + 64 = $1.33
What I have for 2015 was 29 + 63 + 40 + 101 = $2.33
(Note that the 1st and 3rd quarters seemed lower each year, implying a definite seasonality).
Now for PE we have 40.75 divided by 2.33 = 17.5
For rate of growth we have 233 divided by 133 = 1.75, so 75%.
I would expect that the rate of growth for 2016 will come down to 50% or even lower. But with a PE of 17.5 we seem pretty safe.
One thing that threw me is that on Yahoo Finance, it is showing the current PE as 23.13, while you have it (above) as 40.75. Where should I be looking for the PE (I am assuming Yahoo Finance is not correct)?
Saul, I just realized I misspoke in my message above…i jumbled my numbers again. I should have finished my cup of coffee before responding!
Thanks again for the information.
I finished my coffee, and looked at your numbers again.
The 1YPEG calculates to .306, correct?
ie- the 1 year trailing PE (17.5) divided by the rate of growth (1.75%)
Sorry to bother you again with this, but I want to make sure I am calculating the 1YPEG correctly.
Thanks so much.
Hi Speedy, you need to read these things better.
I clearly showed that the rate of growth was 75%. Thus a 1 yr forward PEG would be 17.5 divided by 75, which comes to 0.23.