Intrinsic value of Corning - GLW

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$31.41

  Intrinsic Value

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  Value-price divergence*

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$31.41

 
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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of GLW stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 29.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  3.06
  16.00
  14.90
  13.91
  13.02
  12.22
  11.50
  10.85
  10.26
  9.74
  9.26
  8.84
  8.45
  8.11
  7.80
  7.52
  7.26
  7.04
  6.83
  6.65
  6.49
  6.34
  6.20
  6.08
  5.97
  5.88
  5.79
  5.71
  5.64
  5.58
  5.52
Revenue, $m
  9,390
  10,892
  12,515
  14,256
  16,112
  18,081
  20,159
  22,346
  24,639
  27,037
  29,541
  32,151
  34,869
  37,695
  40,634
  43,688
  46,862
  50,161
  53,589
  57,153
  60,860
  64,717
  68,732
  72,913
  77,269
  81,811
  86,547
  91,490
  96,650
  102,038
  107,669
Variable operating expenses, $m
 
  8,177
  9,372
  10,653
  12,020
  13,469
  14,999
  16,609
  18,297
  20,063
  21,906
  23,670
  25,671
  27,752
  29,915
  32,164
  34,500
  36,929
  39,452
  42,076
  44,805
  47,645
  50,601
  53,679
  56,886
  60,230
  63,717
  67,355
  71,154
  75,121
  79,267
Fixed operating expenses, $m
 
  978
  1,002
  1,027
  1,053
  1,079
  1,106
  1,134
  1,162
  1,191
  1,221
  1,252
  1,283
  1,315
  1,348
  1,382
  1,416
  1,452
  1,488
  1,525
  1,563
  1,602
  1,642
  1,683
  1,726
  1,769
  1,813
  1,858
  1,905
  1,952
  2,001
Total operating expenses, $m
  7,999
  9,155
  10,374
  11,680
  13,073
  14,548
  16,105
  17,743
  19,459
  21,254
  23,127
  24,922
  26,954
  29,067
  31,263
  33,546
  35,916
  38,381
  40,940
  43,601
  46,368
  49,247
  52,243
  55,362
  58,612
  61,999
  65,530
  69,213
  73,059
  77,073
  81,268
Operating income, $m
  1,391
  1,738
  2,141
  2,576
  3,040
  3,533
  4,054
  4,603
  5,179
  5,783
  6,414
  7,230
  7,915
  8,629
  9,371
  10,143
  10,946
  11,780
  12,649
  13,552
  14,491
  15,470
  16,489
  17,551
  18,658
  19,813
  21,018
  22,276
  23,591
  24,965
  26,401
EBITDA, $m
  2,586
  3,145
  3,734
  4,368
  5,045
  5,764
  6,523
  7,323
  8,163
  9,041
  9,959
  10,917
  11,914
  12,952
  14,031
  15,153
  16,320
  17,533
  18,794
  20,106
  21,471
  22,891
  24,371
  25,912
  27,519
  29,194
  30,943
  32,768
  34,674
  36,666
  38,749
Interest expense (income), $m
  184
  160
  229
  303
  383
  468
  558
  653
  753
  857
  967
  1,081
  1,201
  1,325
  1,454
  1,588
  1,728
  1,873
  2,024
  2,180
  2,343
  2,513
  2,689
  2,872
  3,063
  3,262
  3,470
  3,686
  3,912
  4,148
  4,394
Earnings before tax, $m
  3,692
  1,577
  1,912
  2,272
  2,657
  3,065
  3,496
  3,950
  4,427
  4,926
  5,447
  6,148
  6,715
  7,304
  7,917
  8,555
  9,218
  9,908
  10,625
  11,371
  12,148
  12,957
  13,800
  14,678
  15,594
  16,550
  17,548
  18,590
  19,679
  20,817
  22,007
Tax expense, $m
  -3
  426
  516
  614
  717
  828
  944
  1,067
  1,195
  1,330
  1,471
  1,660
  1,813
  1,972
  2,138
  2,310
  2,489
  2,675
  2,869
  3,070
  3,280
  3,498
  3,726
  3,963
  4,210
  4,469
  4,738
  5,019
  5,313
  5,621
  5,942
Net income, $m
  3,695
  1,151
  1,396
  1,659
  1,939
  2,237
  2,552
  2,884
  3,232
  3,596
  3,976
  4,488
  4,902
  5,332
  5,780
  6,245
  6,729
  7,233
  7,756
  8,301
  8,868
  9,459
  10,074
  10,715
  11,384
  12,082
  12,810
  13,571
  14,366
  15,196
  16,065

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  5,291
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  27,899
  26,247
  30,158
  34,352
  38,825
  43,568
  48,576
  53,845
  59,370
  65,150
  71,184
  77,473
  84,021
  90,832
  97,914
  105,273
  112,921
  120,869
  129,130
  137,718
  146,651
  155,944
  165,619
  175,694
  186,191
  197,134
  208,548
  220,457
  232,890
  245,876
  259,443
Adjusted assets (=assets-cash), $m
  22,608
  26,247
  30,158
  34,352
  38,825
  43,568
  48,576
  53,845
  59,370
  65,150
  71,184
  77,473
  84,021
  90,832
  97,914
  105,273
  112,921
  120,869
  129,130
  137,718
  146,651
  155,944
  165,619
  175,694
  186,191
  197,134
  208,548
  220,457
  232,890
  245,876
  259,443
Revenue / Adjusted assets
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
Average production assets, $m
  13,348
  15,489
  17,797
  20,272
  22,912
  25,711
  28,666
  31,775
  35,036
  38,447
  42,008
  45,719
  49,583
  53,603
  57,782
  62,125
  66,638
  71,328
  76,203
  81,272
  86,543
  92,027
  97,737
  103,682
  109,877
  116,335
  123,070
  130,099
  137,436
  145,099
  153,105
Working capital, $m
  6,297
  1,460
  1,677
  1,910
  2,159
  2,423
  2,701
  2,994
  3,302
  3,623
  3,959
  4,308
  4,672
  5,051
  5,445
  5,854
  6,280
  6,722
  7,181
  7,659
  8,155
  8,672
  9,210
  9,770
  10,354
  10,963
  11,597
  12,260
  12,951
  13,673
  14,428
Total debt, $m
  3,902
  5,208
  6,894
  8,702
  10,629
  12,674
  14,832
  17,103
  19,484
  21,976
  24,576
  27,287
  30,109
  33,045
  36,097
  39,269
  42,565
  45,991
  49,551
  53,253
  57,102
  61,108
  65,278
  69,620
  74,144
  78,861
  83,780
  88,913
  94,272
  99,868
  105,716
Total liabilities, $m
  10,006
  11,312
  12,998
  14,806
  16,733
  18,778
  20,936
  23,207
  25,588
  28,080
  30,680
  33,391
  36,213
  39,149
  42,201
  45,373
  48,669
  52,095
  55,655
  59,357
  63,206
  67,212
  71,382
  75,724
  80,248
  84,965
  89,884
  95,017
  100,376
  105,972
  111,820
Total equity, $m
  17,893
  14,934
  17,160
  19,547
  22,091
  24,790
  27,640
  30,638
  33,782
  37,070
  40,504
  44,082
  47,808
  51,684
  55,713
  59,901
  64,252
  68,775
  73,475
  78,362
  83,444
  88,732
  94,237
  99,970
  105,943
  112,169
  118,664
  125,440
  132,515
  139,903
  147,623
Total liabilities and equity, $m
  27,899
  26,246
  30,158
  34,353
  38,824
  43,568
  48,576
  53,845
  59,370
  65,150
  71,184
  77,473
  84,021
  90,833
  97,914
  105,274
  112,921
  120,870
  129,130
  137,719
  146,650
  155,944
  165,619
  175,694
  186,191
  197,134
  208,548
  220,457
  232,891
  245,875
  259,443
Debt-to-equity ratio
  0.218
  0.350
  0.400
  0.450
  0.480
  0.510
  0.540
  0.560
  0.580
  0.590
  0.610
  0.620
  0.630
  0.640
  0.650
  0.660
  0.660
  0.670
  0.670
  0.680
  0.680
  0.690
  0.690
  0.700
  0.700
  0.700
  0.710
  0.710
  0.710
  0.710
  0.720
Adjusted equity ratio
  0.557
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,695
  1,151
  1,396
  1,659
  1,939
  2,237
  2,552
  2,884
  3,232
  3,596
  3,976
  4,488
  4,902
  5,332
  5,780
  6,245
  6,729
  7,233
  7,756
  8,301
  8,868
  9,459
  10,074
  10,715
  11,384
  12,082
  12,810
  13,571
  14,366
  15,196
  16,065
Depreciation, amort., depletion, $m
  1,195
  1,407
  1,593
  1,793
  2,005
  2,231
  2,470
  2,720
  2,983
  3,258
  3,545
  3,687
  3,999
  4,323
  4,660
  5,010
  5,374
  5,752
  6,145
  6,554
  6,979
  7,422
  7,882
  8,361
  8,861
  9,382
  9,925
  10,492
  11,084
  11,702
  12,347
Funds from operations, $m
  2,771
  2,558
  2,989
  3,451
  3,945
  4,468
  5,022
  5,604
  6,215
  6,854
  7,522
  8,175
  8,900
  9,655
  10,439
  11,255
  12,103
  12,985
  13,902
  14,855
  15,847
  16,880
  17,956
  19,077
  20,245
  21,464
  22,735
  24,063
  25,449
  26,898
  28,412
Change in working capital, $m
  250
  201
  217
  233
  249
  264
  279
  293
  307
  321
  336
  350
  364
  379
  394
  409
  425
  442
  459
  478
  497
  517
  538
  560
  584
  609
  635
  662
  691
  722
  754
Cash from operations, $m
  2,521
  2,357
  2,771
  3,218
  3,696
  4,205
  4,743
  5,311
  5,908
  6,533
  7,186
  7,826
  8,536
  9,276
  10,046
  10,846
  11,678
  12,543
  13,442
  14,378
  15,351
  16,363
  17,418
  18,516
  19,661
  20,855
  22,100
  23,400
  24,758
  26,176
  27,658
Maintenance CAPEX, $m
  0
  -1,076
  -1,249
  -1,435
  -1,635
  -1,848
  -2,073
  -2,312
  -2,563
  -2,825
  -3,101
  -3,388
  -3,687
  -3,999
  -4,323
  -4,660
  -5,010
  -5,374
  -5,752
  -6,145
  -6,554
  -6,979
  -7,422
  -7,882
  -8,361
  -8,861
  -9,382
  -9,925
  -10,492
  -11,084
  -11,702
New CAPEX, $m
  -1,130
  -2,141
  -2,308
  -2,476
  -2,639
  -2,799
  -2,956
  -3,109
  -3,261
  -3,411
  -3,561
  -3,712
  -3,864
  -4,020
  -4,179
  -4,343
  -4,513
  -4,690
  -4,875
  -5,068
  -5,271
  -5,485
  -5,709
  -5,946
  -6,195
  -6,458
  -6,735
  -7,028
  -7,337
  -7,663
  -8,007
Cash from investing activities, $m
  3,662
  -3,217
  -3,557
  -3,911
  -4,274
  -4,647
  -5,029
  -5,421
  -5,824
  -6,236
  -6,662
  -7,100
  -7,551
  -8,019
  -8,502
  -9,003
  -9,523
  -10,064
  -10,627
  -11,213
  -11,825
  -12,464
  -13,131
  -13,828
  -14,556
  -15,319
  -16,117
  -16,953
  -17,829
  -18,747
  -19,709
Free cash flow, $m
  6,183
  -860
  -786
  -693
  -578
  -442
  -286
  -110
  84
  296
  525
  726
  985
  1,258
  1,544
  1,843
  2,155
  2,479
  2,815
  3,164
  3,525
  3,900
  4,287
  4,689
  5,105
  5,536
  5,983
  6,447
  6,929
  7,429
  7,950
Issuance/(repayment) of debt, $m
  -573
  1,562
  1,686
  1,808
  1,928
  2,044
  2,159
  2,271
  2,381
  2,491
  2,601
  2,711
  2,822
  2,936
  3,052
  3,172
  3,296
  3,425
  3,560
  3,702
  3,850
  4,006
  4,170
  4,342
  4,524
  4,717
  4,919
  5,133
  5,359
  5,597
  5,848
Issuance/(repurchase) of shares, $m
  -4,089
  925
  829
  728
  605
  462
  298
  114
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -4,661
  2,487
  2,515
  2,536
  2,533
  2,506
  2,457
  2,385
  2,381
  2,491
  2,601
  2,711
  2,822
  2,936
  3,052
  3,172
  3,296
  3,425
  3,560
  3,702
  3,850
  4,006
  4,170
  4,342
  4,524
  4,717
  4,919
  5,133
  5,359
  5,597
  5,848
Total cash flow (excl. dividends), $m
  1,436
  1,627
  1,729
  1,843
  1,955
  2,064
  2,170
  2,275
  2,466
  2,787
  3,125
  3,437
  3,807
  4,193
  4,596
  5,015
  5,451
  5,904
  6,375
  6,866
  7,375
  7,905
  8,457
  9,031
  9,629
  10,253
  10,902
  11,580
  12,287
  13,026
  13,797
Retained Cash Flow (-), $m
  895
  -2,076
  -2,225
  -2,387
  -2,545
  -2,699
  -2,850
  -2,998
  -3,144
  -3,289
  -3,433
  -3,579
  -3,726
  -3,876
  -4,029
  -4,188
  -4,352
  -4,522
  -4,700
  -4,887
  -5,082
  -5,288
  -5,505
  -5,733
  -5,973
  -6,227
  -6,494
  -6,777
  -7,074
  -7,389
  -7,720
Prev. year cash balance distribution, $m
 
  5,035
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  4,585
  -496
  -543
  -590
  -635
  -679
  -723
  -678
  -501
  -308
  -142
  81
  318
  567
  827
  1,099
  1,382
  1,675
  1,979
  2,293
  2,617
  2,952
  3,299
  3,656
  4,026
  4,408
  4,803
  5,213
  5,637
  6,077
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  4,396
  -454
  -473
  -486
  -492
  -493
  -488
  -424
  -288
  -161
  -67
  35
  121
  190
  243
  279
  301
  308
  305
  291
  271
  245
  216
  186
  157
  129
  103
  81
  62
  46
Current shareholders' claim on cash, %
  100
  95.8
  92.6
  90.2
  88.6
  87.4
  86.8
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6
  86.6

Corning Incorporated manufactures and sells specialty glasses, ceramics, and related materials in North America, the Asia Pacific, Europe, and internationally. The company operates through five segments: Display Technologies, Optical Communications, Environmental Technologies, Specialty Materials, and Life Sciences. The Display Technologies segment manufactures glass substrates for liquid crystal displays (LCDs) used in LCD televisions, notebook computers, and flat panel desktop monitors. The Optical Communications segment manufactures optical fiber and cable; and hardware and equipment products comprising cable assemblies, fiber optic hardware and connectors, optical components and couplers, closures, network interface devices, and other accessories for various carrier network applications. This segment also offers subscriber demarcation, connection and protection devices, passive solutions, and outside plant enclosures; and coaxial RF interconnects for the cable television industry and microwave applications. The Environmental Technologies segment manufactures ceramic substrates and filter products for emissions control in mobile and stationary, and gasoline and diesel applications. The Specialty Materials segment manufactures products that provide approximately 150 material formulations for glass, glass ceramics, and fluoride crystals. The Life Sciences segment manufactures and supplies scientific laboratory products consisting of consumables, such as plastic vessels, specialty surfaces, and media, as well as general labware and equipment for cell culture research, bioprocessing, genomics, drug discovery, microbiology, and chemistry; and develops and produces technologies for biologic drug production markets. The company was formerly known as Corning Glass Works and changed its name to Corning Incorporated in April 1989. Corning Incorporated was founded in 1851 and is headquartered in Corning, New York.

FINANCIAL RATIOS  of  Corning (GLW)

Valuation Ratios
P/E Ratio 7.9
Price to Sales 3.1
Price to Book 1.6
Price to Tangible Book
Price to Cash Flow 11.5
Price to Free Cash Flow 20.9
Growth Rates
Sales Growth Rate 3.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -9.6%
Cap. Spend. - 3 Yr. Gr. Rate 2.1%
Financial Strength
Quick Ratio 21
Current Ratio 0.3
LT Debt to Equity 20.4%
Total Debt to Equity 21.8%
Interest Coverage 21
Management Effectiveness
Return On Assets 13.7%
Ret/ On Assets - 3 Yr. Avg. 9.2%
Return On Total Capital 16.4%
Ret/ On T. Cap. - 3 Yr. Avg. 10.7%
Return On Equity 20.1%
Return On Equity - 3 Yr. Avg. 12.8%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 39.9%
Gross Margin - 3 Yr. Avg. 40.6%
EBITDA Margin 54%
EBITDA Margin - 3 Yr. Avg. 45.4%
Operating Margin 14.8%
Oper. Margin - 3 Yr. Avg. 16.7%
Pre-Tax Margin 39.3%
Pre-Tax Margin - 3 Yr. Avg. 30.8%
Net Profit Margin 39.4%
Net Profit Margin - 3 Yr. Avg. 26.5%
Effective Tax Rate -0.1%
Eff/ Tax Rate - 3 Yr. Avg. 13.5%
Payout Ratio 17.5%

GLW stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GLW stock intrinsic value calculation we used $9390 million for the last fiscal year's total revenue generated by Corning. The default revenue input number comes from 2016 income statement of Corning. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our GLW stock valuation model: a) initial revenue growth rate of 16% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for GLW is calculated based on our internal credit rating of Corning, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Corning.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of GLW stock the variable cost ratio is equal to 75.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $954 million in the base year in the intrinsic value calculation for GLW stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.4% for Corning.

Corporate tax rate of 27% is the nominal tax rate for Corning. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the GLW stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for GLW are equal to 142.2%.

Life of production assets of 12.4 years is the average useful life of capital assets used in Corning operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for GLW is equal to 13.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $17893 million for Corning - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 926.596 million for Corning is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Corning at the current share price and the inputted number of shares is $29.1 billion.


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COMPANY NEWS

▶ Corning Acquires SpiderCloud Wireless   [Jul-19-17 04:32PM  GlobeNewswire]
▶ Corning Declares Quarterly Dividend   [11:17AM  GlobeNewswire]
▶ Corning Beats Apple   [Jul-09-17 08:13PM  Forbes]
▶ 3 Growth Dividend Stocks for July   [Jul-08-17 11:06AM  Motley Fool]
▶ Corning division to develop nearly 200,000-square-foot HQ at Riverbend Village   [Jun-30-17 12:55PM  American City Business Journals]
▶ Lock More Gains Into Corning   [Jun-29-17 10:15AM  TheStreet.com]
▶ Why the Best Is Yet to Come for Corning Incorporated   [Jun-28-17 09:31PM  Motley Fool]
▶ Better Buy: Corning Incorporated vs. Apple   [Jun-23-17 07:52AM  Motley Fool]
▶ Better Buy: Corning Incorporated vs. Universal Display   [Jun-21-17 07:58PM  Motley Fool]
▶ 7 Companies With Growing Revenue and Earnings   [Jun-19-17 04:10PM  GuruFocus.com]
▶ Time To Go Bargain Hunting In High Tech Stocks   [Jun-15-17 09:08PM  Forbes]
▶ Corning Hosts Annual Investor Meeting   [04:32PM  GlobeNewswire]
▶ 3 Lowest P/E Stocks Today   [Jun-14-17 10:33AM  Motley Fool]
▶ 3 Dividend Stocks to Buy on Sale   [Jun-13-17 05:43PM  Motley Fool]
▶ Cramer's game plan: A vicious rotation is upon us   [Jun-09-17 06:39PM  CNBC Videos]
▶ 5 Companies Reach Yearly Highs   [Jun-06-17 01:47PM  GuruFocus.com]
▶ 3 Stocks for Warren Buffett Fans   [08:32AM  Motley Fool]
▶ Here's how Pittsburgh Corning acquisition will impact Pittsburgh   [May-16-17 08:00AM  American City Business Journals]
▶ Company News for May 15, 2017   [10:40AM  Zacks]
▶ Apple to invest $200 million in scratch-resistant glass   [May-12-17 06:12PM  Associated Press]
▶ Business Highlights   [05:50PM  Associated Press]
▶ Apple investing $200M in Kentucky manufacturing plant   [12:09PM  American City Business Journals]
▶ Apple invests $200M in partner for U.S. manufacturing effort   [10:15AM  American City Business Journals]
▶ Corning Stock: 3 Things to Watch in 2017   [May-10-17 11:11AM  Motley Fool]
▶ Jeff Auxier's Spring 2017 Market Commentary   [May-09-17 03:43PM  GuruFocus.com]
▶ ETFs with exposure to Corning, Inc. : May 8, 2017   [May-08-17 04:34PM  Capital Cube]
▶ Corning's Glass Is More Than Half Full   [May-06-17 08:22PM  Motley Fool]
▶ Enthusiasm for buybacks has faded   [May-01-17 12:58PM  Yahoo Finance]
▶ ETFs with exposure to Corning, Inc. : April 28, 2017   [Apr-28-17 03:53PM  Capital Cube]
▶ Which Companies Are Now Outperforming 95% Of All Stocks?   [03:30PM  Investor's Business Daily]
▶ Corning Enters Buy Zone On Earnings; Gets IBD Rating Upgrade   [11:29AM  Investor's Business Daily]
▶ Corning Holds Annual Meeting of Shareholders   [Apr-27-17 12:01PM  GlobeNewswire]
▶ Corning Declares Quarterly Dividend   [08:46AM  GlobeNewswire]
▶ Company News for April 26, 2017   [10:33AM  Zacks]
▶ Corning tops Street 1Q forecasts   [07:22AM  Associated Press]
▶ What Investors Should Expect When Corning Reports   [Apr-24-17 08:00PM  Motley Fool]
▶ 8 Undervalued Stocks With Growing Book Values   [Apr-18-17 06:37PM  GuruFocus.com]
▶ Verizon Makes Big 5G Fiber Deal, But Puts This Option On Hold   [04:18PM  Investor's Business Daily]
▶ Verizon and Corning CEOs on 5G fiber deal   [10:44AM  CNBC Videos]
▶ 10 Things You Didn't Know About Corning Incorporated   [Apr-15-17 12:00PM  Motley Fool]
▶ Corning Named 2017 ENERGY STAR® Partner of the Year   [Apr-06-17 10:02AM  GlobeNewswire]
▶ Why Wendy's, Rent-A-Center, and Corning Slumped Today   [Mar-31-17 05:11PM  Motley Fool]
▶ Phoenix Venture Partners LLC Raises 2nd Fund, PVP II LP   [Mar-27-17 07:00AM  PR Newswire]
Stock chart of GLW Financial statements of GLW Annual reports of GLW
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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