Cyclically adjusted price to earnings (CAPE)
Price divided by the average inflation-adjusted earnings per share of the last ten years.
Averaging a full decade is the strongest available defence against buying a cyclical at its peak.
How it is computed here
Share price / mean earnings per share over the last ten fiscal years, each in today's dollars by CPI
Combines more than one basis. See the note. Today's price over the mean earnings per share of the last ten filed fiscal years, each restated to today's dollars with CPI. Filed under value. Neither a high nor a low reading is good on its own, so it is never coloured as one.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Every filed year counts, losses included. Needs at least five; n/m when they average a loss.
- A company that has genuinely transformed is misrepresented by its own history.
- After a split, filed per-share figures are restated to today's share count, and the split is cited.
Questions
How is cyclically adjusted price to earnings calculated?
Share price / mean earnings per share over the last ten fiscal years, each in today's dollars by CPI. Combines more than one basis. See the note. Today's price over the mean earnings per share of the last ten filed fiscal years, each restated to today's dollars with CPI.
What does cyclically adjusted price to earnings tell a value investor?
Averaging a full decade is the strongest available defence against buying a cyclical at its peak.
When does cyclically adjusted price to earnings mislead?
Every filed year counts, losses included. Needs at least five; n/m when they average a loss. A company that has genuinely transformed is misrepresented by its own history. After a split, filed per-share figures are restated to today's share count, and the split is cited.