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Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.
As of today (2024-05-07), the stock price of Luna Innovations is $2.7709. Luna Innovations's graham number for the quarter that ended in Sep. 2023 was $0.58. Therefore, Luna Innovations's Price to Graham Number ratio for today is 4.74.
The historical rank and industry rank for Luna Innovations's Graham Number or its related term are showing as below:
During the past 13 years, the highest Price to Graham Number ratio of Luna Innovations was 10.10. The lowest was 2.01. And the median was 3.35.
Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.
The historical data trend for Luna Innovations's Graham Number can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Luna Innovations Annual Data | |||||||||||||||||||||
Trend | Dec13 | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | |||||||||||
Graham Number | Get a 7-Day Free Trial | 1.07 | 2.54 | 1.00 | - | - |
Luna Innovations Quarterly Data | ||||||||||||||||||||
Dec18 | Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | |
Graham Number | Get a 7-Day Free Trial | - | - | - | 1.00 | 0.58 |
For the Scientific & Technical Instruments subindustry, Luna Innovations's Price-to-Graham-Number, along with its competitors' market caps and Price-to-Graham-Number data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the Hardware industry and Technology sector, Luna Innovations's Price-to-Graham-Number distribution charts can be found below:
* The bar in red indicates where Luna Innovations's Price-to-Graham-Number falls into.
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
Luna Innovations's Graham Number for the fiscal year that ended in Dec. 2022 is calculated as
Graham Number | |||||
= | sqrt of (22.5 | * | Tangible Book per Share | * | EPS without NRI) |
= | sqrt of (22.5 | * | 1.442 | * | -0.071) |
= | N/A |
Luna Innovations's Graham Number for the quarter that ended in Sep. 2023 is calculated as
Graham Number | |||||
= | sqrt of (22.5 | * | Tangible Book per Share | * | EPS without NRI (TTM)) |
= | sqrt of (22.5 | * | 1.519 | * | 0.01) |
= | 0.58 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Luna Innovations (NAS:LUNA) Graham Number Explanation
Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:
Current price should not be more than 15 times average earnings of the past three years.
Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)
Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.
In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.
Luna Innovations's Price to Graham number Ratio for today is calculated as
Price to Graham number | = | Share Price (Today) | / | Graham number (Q: Sep. 2023 ) |
= | 2.7709 | / | 0.58 | |
= | 4.74 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Please keep these in mind:
1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.
Thank you for viewing the detailed overview of Luna Innovations's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
George Gomez-quintero | officer: Chief Financial Officer | LUNA INNOVATIONS INCORPORATED, 301 FIRST STREET SW, SUITE 200, ROANOKE VA 24011 |
Pamela L Coe | director | C/O EXPEDIA, INC., 333 108TH AVENUE NE, BELLEVUE WA 98004 |
Brian Soller | officer: Chief Operating Officer | 301 1ST STREET, SW, SUITE 200, ROANOKE VA 24011 |
Gene Nestro | officer: Chief Financial Officer | C/O LUNA INNOVATIONS, INC., 301 1ST STREET, SW, SUITE 200, ROANOKE VA 24011 |
Clinic Carilion | 10 percent owner | EDWARD MURPHY, M.D., 213 SOUTH JEFFERSON STREET, SUITE 807, ROANOKE VA 24011 |
Mary Beth Vitale | director | 821 17TH STREET, DENVER CO 80202 |
Dale E Messick | officer: Chief Financial Officer | LUNA INNOVATIONS INCORPORATED, 2851 COMMERCE STREET, BLACKSBURG VA 24060 |
Scott A Graeff | officer: CFO, Executive VP Corp. Dev. | LUNA INNOVATIONS INCORPORATED, 2851 COMMERCE STREET, BLACKSBURG VA 24060 |
Barry Phelps | director | 26750 AGOURA RD, CALABASAS CA 91302 |
Michael W. Wise | director | C/O LUNA INNOVATIONS INCORPORATED, 1 RIVERSIDE CIRCLE, SUITE 400, ROANOKE VA 24016 |
Richard Roedel | director | 164 WEST RD, NEW CANAAN CT 06840 |
Donald Pastor | director | 2925 BOARDWALK, ANN ARBOR MI 48104 |
Gary Spiegel | director | |
Coringrato Edward J Jr. | director | 301 1ST STREET, SW, SUITE 200, ROANOKE VA 24011 |
Wilkin Neil D Jr | director |
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