How to calculate/reconcile conflicting P/E ratios?
Was reading over some old LinkedIn IPO press coverage and noticed some drastically different P/E ratios being reported. Note: I know that CBS uses the IPO price and ZH uses the opening price. My question is regarding how even if you swap the numbers they still do not come close.
ZeroHedge: P/E = ( per share) / (???) = 980 (don't really understand their numbers)
CBS: P/E = ( per share) / ([CO].17 earnings per share) = 265
Seems consistent with [1], [2]
Random Quora post: P/E = 1000 for share price of -80 (no further details)
My own back-of-envelope calculation: P/E = ( per share) / (.4M earnings / 94.5M shares) = 510 (using the CBS earnings figure)
FWIW, today it's 880.
Anyone understand why these numbers are different? Would really appreciate a step-by-step breakdown of how to arrive at those numbers, for dummies.
(1)1 Comments
Sorted by latest first Latest Oldest Best
The user who wrote the Zerohedge item:
Earnings: Million
Shares: .5 Million
Price: per share
Earnings: 0.085 per share
Calculated PE: 0
The CBS article:
Earnings: Million
Shares: .5 Million
Price: per share estimated start buut quickly doubled
Earnings: 0.17 per share
Calculated PE: 5
The Quora estimate is similar to the Zerohedge one (estimated a round value of 1000 PE and a price of 70-80). Note that it was 30 days after the first 2 items you quoted.
You used the CBS numbers except you used the zerohedge price.
It depends on which earnings were for each calculation. Past or future. The CBS numbers make the most sense because you can trace where they come from based on the links in their article.
CBS based their price on the estimates made the day before the stock went on sale. The price in the zerohedge item was based on the early trading numbers.
Terms of Use Privacy policy Contact About Cancellation policy © freshhoot.com2025 All Rights reserved.