Intrinsic value of Genworth Financial Cl A - GNW

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$4.07

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$4.07

 
Intrinsic value

$45.29

 
Up/down potential

+999%

 
Rating

str. buy

 
Value-price divergence* premium content

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Our model is not good at valuating stocks of financial companies, such as GNW.

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

We calculate the intrinsic value of GNW 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 2013), $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 2.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2013(a)
   2014
   2015
   2016
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -3.26
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  0
  9,617
  9,838
  10,091
  10,374
  10,689
  11,034
  11,410
  11,817
  12,255
  12,725
  13,228
  13,765
  14,337
  14,944
  15,589
  16,272
  16,995
  17,760
  18,568
  19,421
  20,321
  21,271
  22,271
  23,326
  24,436
  25,605
  26,836
  28,131
  29,493
  30,926
Variable operating expenses, $m
 
  8,547
  8,742
  8,964
  9,214
  9,491
  9,794
  10,125
  10,483
  10,869
  11,282
  11,638
  12,111
  12,614
  13,148
  13,715
  14,316
  14,952
  15,625
  16,336
  17,087
  17,879
  18,714
  19,595
  20,522
  21,499
  22,528
  23,611
  24,750
  25,948
  27,209
Fixed operating expenses, $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
Total operating expenses, $m
  7,886
  8,547
  8,742
  8,964
  9,214
  9,491
  9,794
  10,125
  10,483
  10,869
  11,282
  11,638
  12,111
  12,614
  13,148
  13,715
  14,316
  14,952
  15,625
  16,336
  17,087
  17,879
  18,714
  19,595
  20,522
  21,499
  22,528
  23,611
  24,750
  25,948
  27,209
Operating income, $m
  1,542
  1,069
  1,096
  1,126
  1,160
  1,198
  1,240
  1,285
  1,334
  1,386
  1,443
  1,590
  1,655
  1,723
  1,796
  1,874
  1,956
  2,043
  2,135
  2,232
  2,334
  2,443
  2,557
  2,677
  2,804
  2,937
  3,078
  3,226
  3,381
  3,545
  3,717
EBITDA, $m
  2,111
  1,235
  1,263
  1,296
  1,332
  1,372
  1,417
  1,465
  1,517
  1,573
  1,634
  1,698
  1,767
  1,841
  1,919
  2,002
  2,089
  2,182
  2,280
  2,384
  2,494
  2,609
  2,731
  2,860
  2,995
  3,138
  3,288
  3,446
  3,612
  3,787
  3,971
Interest expense (income), $m
  453
  461
  597
  733
  889
  1,065
  1,259
  1,472
  1,705
  1,956
  2,227
  2,517
  2,828
  3,160
  3,513
  3,888
  4,287
  4,709
  5,156
  5,628
  6,127
  6,655
  7,211
  7,797
  8,416
  9,067
  9,753
  10,476
  11,236
  12,036
  12,878
Earnings before tax, $m
  1,050
  608
  499
  393
  271
  133
  -20
  -188
  -371
  -570
  -784
  -927
  -1,174
  -1,437
  -1,717
  -2,015
  -2,331
  -2,666
  -3,021
  -3,396
  -3,793
  -4,212
  -4,654
  -5,120
  -5,612
  -6,130
  -6,675
  -7,250
  -7,855
  -8,491
  -9,161
Tax expense, $m
  324
  164
  135
  106
  73
  36
  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
Net income, $m
  560
  444
  364
  287
  198
  97
  -20
  -188
  -371
  -570
  -784
  -927
  -1,174
  -1,437
  -1,717
  -2,015
  -2,331
  -2,666
  -3,021
  -3,396
  -3,793
  -4,212
  -4,654
  -5,120
  -5,612
  -6,130
  -6,675
  -7,250
  -7,855
  -8,491
  -9,161

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
  0
Total assets, $m
  108,045
  110,535
  113,077
  115,984
  119,246
  122,861
  126,828
  131,147
  135,823
  140,860
  146,266
  152,049
  158,220
  164,791
  171,774
  179,183
  187,036
  195,348
  204,138
  213,425
  223,232
  233,579
  244,491
  255,994
  268,113
  280,877
  294,316
  308,461
  323,346
  339,006
  355,477
Adjusted assets (=assets-cash), $m
  108,045
  110,535
  113,077
  115,984
  119,246
  122,861
  126,828
  131,147
  135,823
  140,860
  146,266
  152,049
  158,220
  164,791
  171,774
  179,183
  187,036
  195,348
  204,138
  213,425
  223,232
  233,579
  244,491
  255,994
  268,113
  280,877
  294,316
  308,461
  323,346
  339,006
  355,477
Revenue / Adjusted assets
  0.000
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
  0.087
Average production assets, $m
  383
  394
  403
  414
  425
  438
  452
  468
  484
  502
  522
  542
  564
  588
  613
  639
  667
  697
  728
  761
  796
  833
  872
  913
  956
  1,002
  1,050
  1,100
  1,153
  1,209
  1,268
Working capital, $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
  0
Total debt, $m
  7,441
  9,623
  11,827
  14,347
  17,175
  20,310
  23,749
  27,494
  31,547
  35,915
  40,601
  45,616
  50,966
  56,662
  62,717
  69,141
  75,949
  83,155
  90,776
  98,829
  107,331
  116,302
  125,763
  135,736
  146,243
  157,309
  168,961
  181,225
  194,130
  207,707
  221,987
Total liabilities, $m
  93,652
  95,834
  98,038
  100,558
  103,386
  106,521
  109,960
  113,705
  117,758
  122,126
  126,812
  131,827
  137,177
  142,873
  148,928
  155,352
  162,160
  169,366
  176,987
  185,040
  193,542
  202,513
  211,974
  221,947
  232,454
  243,520
  255,172
  267,436
  280,341
  293,918
  308,198
Total equity, $m
  14,393
  14,701
  15,039
  15,426
  15,860
  16,341
  16,868
  17,443
  18,064
  18,734
  19,453
  20,223
  21,043
  21,917
  22,846
  23,831
  24,876
  25,981
  27,150
  28,386
  29,690
  31,066
  32,517
  34,047
  35,659
  37,357
  39,144
  41,025
  43,005
  45,088
  47,278
Total liabilities and equity, $m
  108,045
  110,535
  113,077
  115,984
  119,246
  122,862
  126,828
  131,148
  135,822
  140,860
  146,265
  152,050
  158,220
  164,790
  171,774
  179,183
  187,036
  195,347
  204,137
  213,426
  223,232
  233,579
  244,491
  255,994
  268,113
  280,877
  294,316
  308,461
  323,346
  339,006
  355,476
Debt-to-equity ratio
  0.517
  0.650
  0.790
  0.930
  1.080
  1.240
  1.410
  1.580
  1.750
  1.920
  2.090
  2.260
  2.420
  2.590
  2.750
  2.900
  3.050
  3.200
  3.340
  3.480
  3.620
  3.740
  3.870
  3.990
  4.100
  4.210
  4.320
  4.420
  4.510
  4.610
  4.700
Adjusted equity ratio
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  560
  444
  364
  287
  198
  97
  -20
  -188
  -371
  -570
  -784
  -927
  -1,174
  -1,437
  -1,717
  -2,015
  -2,331
  -2,666
  -3,021
  -3,396
  -3,793
  -4,212
  -4,654
  -5,120
  -5,612
  -6,130
  -6,675
  -7,250
  -7,855
  -8,491
  -9,161
Depreciation, amort., depletion, $m
  569
  166
  167
  169
  172
  174
  177
  180
  184
  187
  191
  108
  113
  118
  123
  128
  133
  139
  146
  152
  159
  167
  174
  183
  191
  200
  210
  220
  231
  242
  254
Funds from operations, $m
  1,570
  609
  532
  456
  369
  272
  158
  -7
  -187
  -382
  -593
  -819
  -1,061
  -1,319
  -1,594
  -1,887
  -2,197
  -2,527
  -2,875
  -3,244
  -3,634
  -4,045
  -4,480
  -4,938
  -5,421
  -5,930
  -6,466
  -7,030
  -7,624
  -8,249
  -8,907
Change in working capital, $m
  171
  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 from operations, $m
  1,399
  626
  532
  456
  369
  272
  158
  -7
  -187
  -382
  -593
  -819
  -1,061
  -1,319
  -1,594
  -1,887
  -2,197
  -2,527
  -2,875
  -3,244
  -3,634
  -4,045
  -4,480
  -4,938
  -5,421
  -5,930
  -6,466
  -7,030
  -7,624
  -8,249
  -8,907
Maintenance CAPEX, $m
  0
  -77
  -79
  -81
  -83
  -85
  -88
  -90
  -94
  -97
  -100
  -104
  -108
  -113
  -118
  -123
  -128
  -133
  -139
  -146
  -152
  -159
  -167
  -174
  -183
  -191
  -200
  -210
  -220
  -231
  -242
New CAPEX, $m
  0
  -12
  -9
  -10
  -12
  -13
  -14
  -15
  -17
  -18
  -19
  -21
  -22
  -23
  -25
  -26
  -28
  -30
  -31
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -48
  -50
  -53
  -56
  -59
Cash from investing activities, $m
  -580
  -89
  -88
  -91
  -95
  -98
  -102
  -105
  -111
  -115
  -119
  -125
  -130
  -136
  -143
  -149
  -156
  -163
  -170
  -179
  -187
  -196
  -206
  -215
  -226
  -237
  -248
  -260
  -273
  -287
  -301
Free cash flow, $m
  819
  537
  444
  365
  275
  174
  56
  -113
  -298
  -497
  -713
  -944
  -1,191
  -1,455
  -1,737
  -2,036
  -2,353
  -2,690
  -3,046
  -3,423
  -3,821
  -4,241
  -4,685
  -5,153
  -5,647
  -6,166
  -6,714
  -7,290
  -7,897
  -8,536
  -9,208
Issuance/(repayment) of debt, $m
  219
  2,182
  2,204
  2,520
  2,829
  3,134
  3,439
  3,745
  4,054
  4,367
  4,687
  5,014
  5,350
  5,697
  6,054
  6,424
  6,808
  7,207
  7,621
  8,052
  8,502
  8,971
  9,461
  9,972
  10,507
  11,066
  11,652
  12,264
  12,905
  13,577
  14,281
Issuance/(repurchase) of shares, $m
  -43
  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 from financing (excl. dividends), $m  
  -149
  2,182
  2,204
  2,520
  2,829
  3,134
  3,439
  3,745
  4,054
  4,367
  4,687
  5,014
  5,350
  5,697
  6,054
  6,424
  6,808
  7,207
  7,621
  8,052
  8,502
  8,971
  9,461
  9,972
  10,507
  11,066
  11,652
  12,264
  12,905
  13,577
  14,281
Total cash flow (excl. dividends), $m
  561
  2,719
  2,648
  2,885
  3,104
  3,308
  3,495
  3,632
  3,756
  3,870
  3,974
  4,070
  4,159
  4,241
  4,317
  4,388
  4,455
  4,517
  4,575
  4,630
  4,681
  4,730
  4,776
  4,819
  4,861
  4,900
  4,938
  4,974
  5,008
  5,041
  5,073
Retained Cash Flow (-), $m
  2,100
  -308
  -338
  -387
  -434
  -481
  -528
  -574
  -622
  -670
  -719
  -769
  -821
  -874
  -929
  -986
  -1,044
  -1,106
  -1,169
  -1,235
  -1,304
  -1,376
  -1,451
  -1,530
  -1,612
  -1,698
  -1,787
  -1,881
  -1,980
  -2,083
  -2,191
Prev. year cash balance distribution, $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 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
 
  2,411
  2,310
  2,498
  2,670
  2,827
  2,967
  3,057
  3,134
  3,200
  3,255
  3,301
  3,338
  3,367
  3,389
  3,403
  3,410
  3,411
  3,406
  3,394
  3,377
  3,353
  3,324
  3,289
  3,249
  3,202
  3,150
  3,092
  3,028
  2,958
  2,882
Discount rate, %
 
  7.00
  7.35
  7.72
  8.10
  8.51
  8.93
  9.38
  9.85
  10.34
  10.86
  11.40
  11.97
  12.57
  13.20
  13.86
  14.55
  15.28
  16.04
  16.85
  17.69
  18.57
  19.50
  20.48
  21.50
  22.58
  23.70
  24.89
  26.13
  27.44
  28.81
PV of cash for distribution, $m
 
  2,254
  2,004
  1,999
  1,955
  1,879
  1,776
  1,632
  1,478
  1,320
  1,161
  1,007
  859
  722
  597
  486
  388
  304
  234
  176
  130
  94
  66
  45
  30
  20
  12
  8
  5
  3
  1
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Genworth Financial, Inc. provides insurance and homeownership solutions in the United States and internationally. It operates through five segments: U.S. Mortgage Insurance, Canada Mortgage Insurance, Australia Mortgage Insurance, U.S. Life Insurance, and Runoff. The U.S. Mortgage Insurance segment offers mortgage insurance products primarily insure prime-based and individually underwritten residential mortgage loans. The Canada Mortgage Insurance segment provides flow mortgage insurance; and bulk mortgage insurance products and services that aid in the sale of mortgages to the capital markets, as well as helps lenders manage capital and risk in Canada. The Australia Mortgage Insurance segment offers flow mortgage insurance, as well as bulk mortgage insurance that aids in the sale of mortgages to the capital markets in Australia. The U.S. Life Insurance segment offers long-term care insurance products, as well as service traditional life insurance and fixed annuity products in the United States. The Runoff segment covers non-strategic products, which primarily include variable annuity, variable life insurance, institutional, corporate-owned life insurance, and accident and health insurance products. This segmentÂ’s institutional products include funding agreements, funding agreements backing notes, and guaranteed investment contracts. It distributes its products and services primarily through appointed independent producers, financial intermediaries, employer groups, and sales specialists. Genworth Financial, Inc. was founded in 2003 and is headquartered in Richmond, Virginia.

FINANCIAL RATIOS  of  Genworth Financial Cl A (GNW)

Valuation Ratios
P/E Ratio 3.6
Price to Sales 0.2
Price to Book 0.1
Price to Tangible Book
Price to Cash Flow 1.4
Price to Free Cash Flow 1.4
Growth Rates
Sales Growth Rate -3.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 51.7%
Total Debt to Equity 51.7%
Interest Coverage 3
Management Effectiveness
Return On Assets 0.8%
Ret/ On Assets - 3 Yr. Avg. 0.6%
Return On Total Capital 2.5%
Ret/ On T. Cap. - 3 Yr. Avg. 1.3%
Return On Equity 3.6%
Return On Equity - 3 Yr. Avg. 2%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 22%
EBITDA Margin - 3 Yr. Avg. 17.3%
Operating Margin 16.4%
Oper. Margin - 3 Yr. Avg. 11.3%
Pre-Tax Margin 11.1%
Pre-Tax Margin - 3 Yr. Avg. 6.2%
Net Profit Margin 5.9%
Net Profit Margin - 3 Yr. Avg. 3.2%
Effective Tax Rate 30.9%
Eff/ Tax Rate - 3 Yr. Avg. 15.1%
Payout Ratio 0%

GNW stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GNW stock intrinsic value calculation we used $9428 million for the last fiscal year's total revenue generated by Genworth Financial Cl A. The default revenue input number comes from 2013 income statement of Genworth Financial Cl A. 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 GNW stock valuation model: a) initial revenue growth rate of 2% 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 7%, whose default value for GNW is calculated based on our internal credit rating of Genworth Financial Cl A, 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 Genworth Financial Cl A.
    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 GNW stock the variable cost ratio is equal to 88.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for GNW 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 6.2% for Genworth Financial Cl A.

Corporate tax rate of 27% is the nominal tax rate for Genworth Financial Cl A. 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 GNW 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 GNW are equal to 4.1%.

Life of production assets of 2.2 years is the average useful life of capital assets used in Genworth Financial Cl A 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 GNW is equal to 0%. 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 - $14393 million for Genworth Financial Cl A - 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 500 million for Genworth Financial Cl A 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 Genworth Financial Cl A at the current share price and the inputted number of shares is $2.0 billion.


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Stock chart of GNW Financial statements of GNW
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