Beyond standard P/E — this report includes SBC-adjusted P/E (the real shareholder cost after stock compensation), P/FCF (cleaner than P/E, harder to manipulate), ROIC (best measure of capital allocation), EV/EBIT and Price-to-Tangible-Book. All S&P 500 stocks, updated daily.
Open Valuation Report → Also try: Buffett ScorecardPrice-to-Earnings = Market Cap ÷ Net Income. How many years of current earnings you pay upfront. <10 very cheap; 10–20 fair; 20–40 growth premium; >40 high expectations. Null = negative earnings.
Price-to-Sales = Market Cap ÷ Revenue. Useful for companies without profits yet. Software SaaS: 5–20×. Below 1 can indicate undervaluation in stable industries.
Enterprise Value ÷ EBITDA. More robust than P/E — accounts for debt and eliminates accounting differences. Industry average typically 8–14×. EV = Market Cap + Debt − Cash.
These metrics go beyond what most free tools offer. They reveal the real cost of ownership after accounting for stock compensation, debt load and capital requirements.
Market Cap ÷ Free Cash Flow. Cleaner than P/E because FCF is harder to manipulate with accounting. <15 cheap; 15–30 fair; >40 expensive. A company with P/E 20 but P/FCF 50 is burning more cash than income suggests.
Enterprise Value ÷ Operating Profit. Stricter than EV/EBITDA — includes depreciation, important for capital-intensive businesses where D&A is a real economic cost.
P/E after subtracting Stock-Based Compensation from earnings. SBC dilutes shareholders but GAAP adds it back. A large gap between P/E and SBC-adj P/E reveals hidden compensation costs.
Return on Invested Capital ≈ EBIT × 0.79 ÷ Enterprise Value. The best single measure of capital allocation quality. >15% good; >30% exceptional economic moat.
Market Cap ÷ (Common Equity − Goodwill). Conservative measure excluding intangibles. <1 historically a strong value signal. Negative = goodwill exceeds equity (heavy acquirer).
FCF ÷ Market Cap × 100. Like a bond yield but for free cash. >8% potentially undervalued; 4–8% fair range. Compare against current Treasury yield for context.
Don't rely on a single metric. A stock can look cheap on P/E but expensive on P/FCF if earnings quality is low. Here's the recommended approach:
Step 1: Start with P/FCF — it's the most reliable single ratio. Below 15 is historically attractive for quality businesses.
Step 2: Check SBC-Adjusted P/E. A large gap (more than 5–10 points) between standard P/E and SBC-adj P/E means the company is hiding real costs through stock compensation. Common in tech.
Step 3: Check ROIC. A company can look expensive on all ratios but still be a great investment if it consistently compounds at 30%+ ROIC. High ROIC justifies premium multiples.
Step 4: Cross-reference with Buffett Scorecard business quality and FCF Yield.
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