GlaxoSmithKline (CAI:BIOC) Earnings Power Value (EPV): E£6.76 (As of Sep16)


What is GlaxoSmithKline Earnings Power Value (EPV)?

GlaxoSmithKline CAI:BIOC +3.26% Earnings Power Value (EPV) is E£6.76 as of Sep16.

As of Sep16, GlaxoSmithKline's earnings power value is E£6.76. *

* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.

Margin of Safety is N/A.

The basic concept of EPV is that one should value a stock based on the current free cash flow of a company and not on future projections which may, or may not, come true. It is arguably a better way to analyze stocks than Discounted Cash Flow analysis that relies on highly speculative growth assumptions many years into the future. Assumption: Current profitability is sustainable.

GlaxoSmithKline  (CAI:BIOC) Earnings Power Value (EPV) Explanation

Assumption: Current profitability is sustainable.

Earnings power value (EPV) uses a very basic equation which assumes no growth, although it does rely on an assumption about the cost of capital as well as the fact that current earnings are sustainable. It also involves several adjustments to clean up the underlying Earnings figures.

Be Aware

Though using today's earnings in calculating Earnings Power Value, GuruFocus is normalizing these earnings to the business cycle. This eliminates the effects on profitability of valuing the firm at different points in the business cycle. This means that we are considering the average earnings over 5 years.

GlaxoSmithKline Earnings Power Value (EPV) Related Terms

GlaxoSmithKline Earnings Power Value (EPV) Historical Data

* Premium members only.

The historical data trend for GlaxoSmithKline's Earnings Power Value (EPV) 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.

GlaxoSmithKline Earnings Power Value (EPV) Chart

GlaxoSmithKline Annual Data
Trend Dec12 Dec13 Dec14 Dec15
Earnings Power Value (EPV)
0.00 0.00 0.00 0.00

GlaxoSmithKline Quarterly Data
Dec12 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16
Earnings Power Value (EPV) Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.00 0.00 0.00 0.00 0.00

CAI:BIOC vs PRPH: Earnings Power Value (EPV) Comparison

For the Drug Manufacturers - General subindustry, GlaxoSmithKline's Earnings Power Value (EPV), along with its competitors' market caps and Earnings Power Value (EPV) 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.

GlaxoSmithKline Earnings Power Value (EPV) vs Drug Manufacturers Industry

For the Drug Manufacturers industry and Healthcare sector, GlaxoSmithKline's Earnings Power Value (EPV) distribution charts can be found below:

* The bar in red indicates where GlaxoSmithKline's Earnings Power Value (EPV) falls into.


GlaxoSmithKline Earnings Power Value (EPV) Calculation

Earnings Power Value also known as just Earnings Power is a valuation technique popularised by Bruce Greenwald, an authority on value investing at Columbia University. It is arguably a better way to analyze stocks than Discounted Cash Flow analysis that relies on highly speculative growth assumptions many years into the future.

The basic concept of EPV is that one should value a stock based on the current free cash flow of a company and not on future projections which may, or may not, come true. This valuation tool excludes the potential growth that a company may have so that needs to be looked at separately. Since future growth is excluded from the analysis, only the maintenance capital expenditures are subtracted from after-tax EBIT (earnings before interest and taxes) and growth capex is ignored.

What does a Earnings Power Value (EPV) of E£6.76 mean?
GlaxoSmithKline (CAI:BIOC) has a Earnings Power Value (EPV) of E£6.76 as of Sep16. Bruce Greenwald's earnings power value focuses on current earnings without factoring in future growth. View historical data on GlaxoSmithKline and its competitors.
Is GlaxoSmithKline's Earnings Power Value (EPV) too high?
GlaxoSmithKline's current Earnings Power Value (EPV) is E£6.76.
How does GlaxoSmithKline's Earnings Power Value (EPV) compare to PRPH?
GlaxoSmithKline's Earnings Power Value (EPV) of E£6.76 can be compared against companies in the Drug Manufacturers industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Earnings Power Value (EPV) for a Drug Manufacturers company?
A good Earnings Power Value (EPV) depends on the Drug Manufacturers industry context. However, Earnings Power Value (EPV) should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Earnings Power Value (EPV) mean?
A high Earnings Power Value (EPV) can signal that a stock is expensive relative to its fundamentals. Bruce Greenwald's earnings power value focuses on current earnings without factoring in future growth. View historical data on GlaxoSmithKline and its competitors. GlaxoSmithKline's current Earnings Power Value (EPV) is E£6.76. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is GlaxoSmithKline stock overvalued right now?
GlaxoSmithKline (CAI:BIOC) has a current Earnings Power Value (EPV) of E£6.76. The current Earnings Power Value (EPV) is E£6.76. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Earnings Power Value (EPV) calculated?
Earnings Power Value (EPV) is calculated from a company's financial statements. For GlaxoSmithKline (CAI:BIOC), the current Earnings Power Value (EPV) is E£6.76 as of Sep16. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.

GlaxoSmithKline Business Description

Address Boomerang Building, No 46, Block (J) First Section City Centre, Town Centre, Second floor, Fifth District - New Cairo, Cairo, EGY, 11835
GlaxoSmithKline is a pharmaceutical company. It is focused on developing new medicines in respiratory, HIV, oncology, and immune-inflation. The company is segmented into Commercial Operations and Total Research and development. It generates the majority of its revenue from the Commercial Operations segment.