Intrinsic value of Corning - GLW

Previous Close

$30.06

  Intrinsic Value

$10.62

stock screener

  Rating & Target

str. sell

-65%

Previous close

$30.06

 
Intrinsic value

$10.62

 
Up/down potential

-65%

 
Rating

str. sell

*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 27.2

 

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
  5.80
  5.72
  5.65
  5.58
  5.52
  5.47
  5.43
  5.38
  5.34
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
  5.16
  5.15
  5.13
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
  5.05
  5.04
  5.04
Revenue, $m
  9,390
  9,935
  10,503
  11,096
  11,716
  12,363
  13,039
  13,747
  14,487
  15,261
  16,071
  16,920
  17,808
  18,739
  19,714
  20,736
  21,807
  22,929
  24,106
  25,341
  26,635
  27,993
  29,417
  30,911
  32,478
  34,123
  35,849
  37,660
  39,560
  41,555
  43,648
Variable operating expenses, $m
 
  7,472
  7,890
  8,327
  8,783
  9,259
  9,757
  10,278
  10,823
  11,393
  11,990
  12,456
  13,110
  13,796
  14,513
  15,266
  16,054
  16,881
  17,747
  18,656
  19,609
  20,608
  21,657
  22,757
  23,911
  25,121
  26,392
  27,725
  29,124
  30,593
  32,134
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
  8,450
  8,892
  9,354
  9,836
  10,338
  10,863
  11,412
  11,985
  12,584
  13,211
  13,708
  14,393
  15,111
  15,861
  16,648
  17,470
  18,333
  19,235
  20,181
  21,172
  22,210
  23,299
  24,440
  25,637
  26,890
  28,205
  29,583
  31,029
  32,545
  34,135
Operating income, $m
  1,391
  1,485
  1,611
  1,742
  1,880
  2,024
  2,176
  2,335
  2,501
  2,677
  2,861
  3,212
  3,415
  3,628
  3,852
  4,088
  4,336
  4,597
  4,871
  5,160
  5,463
  5,782
  6,118
  6,471
  6,842
  7,233
  7,644
  8,076
  8,531
  9,010
  9,513
EBITDA, $m
  2,586
  2,782
  2,973
  3,172
  3,381
  3,600
  3,829
  4,069
  4,320
  4,584
  4,861
  5,152
  5,457
  5,777
  6,113
  6,466
  6,837
  7,226
  7,636
  8,066
  8,517
  8,992
  9,491
  10,015
  10,567
  11,146
  11,755
  12,395
  13,068
  13,775
  14,518
Interest expense (income), $m
  184
  160
  185
  211
  238
  267
  296
  327
  360
  393
  429
  466
  505
  545
  588
  632
  679
  728
  779
  833
  889
  949
  1,011
  1,076
  1,144
  1,216
  1,291
  1,370
  1,452
  1,539
  1,630
Earnings before tax, $m
  3,692
  1,325
  1,425
  1,531
  1,641
  1,757
  1,879
  2,007
  2,142
  2,283
  2,432
  2,746
  2,910
  3,083
  3,265
  3,456
  3,657
  3,869
  4,092
  4,327
  4,574
  4,833
  5,107
  5,395
  5,698
  6,017
  6,353
  6,707
  7,079
  7,470
  7,883
Tax expense, $m
  -3
  358
  385
  413
  443
  475
  507
  542
  578
  616
  657
  741
  786
  832
  881
  933
  987
  1,045
  1,105
  1,168
  1,235
  1,305
  1,379
  1,457
  1,538
  1,625
  1,715
  1,811
  1,911
  2,017
  2,128
Net income, $m
  3,695
  967
  1,040
  1,117
  1,198
  1,283
  1,372
  1,465
  1,564
  1,667
  1,775
  2,004
  2,124
  2,251
  2,383
  2,523
  2,670
  2,824
  2,987
  3,158
  3,339
  3,528
  3,728
  3,938
  4,160
  4,393
  4,638
  4,896
  5,167
  5,453
  5,754

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
  23,939
  25,308
  26,738
  28,230
  29,790
  31,420
  33,125
  34,908
  36,773
  38,726
  40,770
  42,911
  45,154
  47,503
  49,965
  52,546
  55,251
  58,088
  61,062
  64,181
  67,452
  70,884
  74,484
  78,261
  82,224
  86,382
  90,746
  95,326
  100,132
  105,176
Adjusted assets (=assets-cash), $m
  22,608
  23,939
  25,308
  26,738
  28,230
  29,790
  31,420
  33,125
  34,908
  36,773
  38,726
  40,770
  42,911
  45,154
  47,503
  49,965
  52,546
  55,251
  58,088
  61,062
  64,181
  67,452
  70,884
  74,484
  78,261
  82,224
  86,382
  90,746
  95,326
  100,132
  105,176
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
  14,127
  14,935
  15,779
  16,660
  17,580
  18,542
  19,548
  20,600
  21,701
  22,853
  24,060
  25,323
  26,647
  28,033
  29,486
  31,009
  32,605
  34,279
  36,034
  37,875
  39,806
  41,831
  43,955
  46,184
  48,523
  50,977
  53,552
  56,254
  59,091
  62,068
Working capital, $m
  6,297
  1,331
  1,407
  1,487
  1,570
  1,657
  1,747
  1,842
  1,941
  2,045
  2,154
  2,267
  2,386
  2,511
  2,642
  2,779
  2,922
  3,073
  3,230
  3,396
  3,569
  3,751
  3,942
  4,142
  4,352
  4,572
  4,804
  5,046
  5,301
  5,568
  5,849
Total debt, $m
  3,902
  4,214
  4,804
  5,420
  6,063
  6,736
  7,438
  8,173
  8,941
  9,745
  10,587
  11,468
  12,391
  13,357
  14,370
  15,431
  16,543
  17,709
  18,932
  20,214
  21,558
  22,968
  24,447
  25,999
  27,626
  29,334
  31,127
  33,008
  34,981
  37,053
  39,227
Total liabilities, $m
  10,006
  10,318
  10,908
  11,524
  12,167
  12,840
  13,542
  14,277
  15,045
  15,849
  16,691
  17,572
  18,495
  19,461
  20,474
  21,535
  22,647
  23,813
  25,036
  26,318
  27,662
  29,072
  30,551
  32,103
  33,730
  35,438
  37,231
  39,112
  41,085
  43,157
  45,331
Total equity, $m
  17,893
  13,621
  14,400
  15,214
  16,063
  16,951
  17,878
  18,848
  19,863
  20,924
  22,035
  23,198
  24,417
  25,693
  27,029
  28,430
  29,899
  31,438
  33,052
  34,744
  36,519
  38,380
  40,333
  42,381
  44,530
  46,785
  49,152
  51,634
  54,240
  56,975
  59,845
Total liabilities and equity, $m
  27,899
  23,939
  25,308
  26,738
  28,230
  29,791
  31,420
  33,125
  34,908
  36,773
  38,726
  40,770
  42,912
  45,154
  47,503
  49,965
  52,546
  55,251
  58,088
  61,062
  64,181
  67,452
  70,884
  74,484
  78,260
  82,223
  86,383
  90,746
  95,325
  100,132
  105,176
Debt-to-equity ratio
  0.218
  0.310
  0.330
  0.360
  0.380
  0.400
  0.420
  0.430
  0.450
  0.470
  0.480
  0.490
  0.510
  0.520
  0.530
  0.540
  0.550
  0.560
  0.570
  0.580
  0.590
  0.600
  0.610
  0.610
  0.620
  0.630
  0.630
  0.640
  0.640
  0.650
  0.660
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
  967
  1,040
  1,117
  1,198
  1,283
  1,372
  1,465
  1,564
  1,667
  1,775
  2,004
  2,124
  2,251
  2,383
  2,523
  2,670
  2,824
  2,987
  3,158
  3,339
  3,528
  3,728
  3,938
  4,160
  4,393
  4,638
  4,896
  5,167
  5,453
  5,754
Depreciation, amort., depletion, $m
  1,195
  1,297
  1,362
  1,430
  1,501
  1,575
  1,653
  1,734
  1,819
  1,908
  2,001
  1,940
  2,042
  2,149
  2,261
  2,378
  2,501
  2,629
  2,764
  2,906
  3,054
  3,210
  3,373
  3,545
  3,725
  3,913
  4,111
  4,319
  4,537
  4,765
  5,005
Funds from operations, $m
  2,771
  2,264
  2,403
  2,548
  2,699
  2,858
  3,025
  3,200
  3,383
  3,575
  3,776
  3,945
  4,167
  4,399
  4,644
  4,901
  5,171
  5,454
  5,752
  6,064
  6,393
  6,739
  7,102
  7,483
  7,884
  8,306
  8,749
  9,215
  9,704
  10,219
  10,760
Change in working capital, $m
  250
  73
  76
  79
  83
  87
  91
  95
  99
  104
  109
  114
  119
  125
  131
  137
  144
  150
  158
  165
  173
  182
  191
  200
  210
  220
  231
  243
  255
  267
  281
Cash from operations, $m
  2,521
  2,191
  2,326
  2,468
  2,616
  2,772
  2,934
  3,105
  3,283
  3,471
  3,667
  3,831
  4,048
  4,275
  4,513
  4,764
  5,027
  5,303
  5,594
  5,899
  6,220
  6,557
  6,911
  7,283
  7,674
  8,085
  8,518
  8,972
  9,449
  9,952
  10,479
Maintenance CAPEX, $m
  0
  -1,076
  -1,139
  -1,204
  -1,272
  -1,344
  -1,418
  -1,495
  -1,576
  -1,661
  -1,750
  -1,843
  -1,940
  -2,042
  -2,149
  -2,261
  -2,378
  -2,501
  -2,629
  -2,764
  -2,906
  -3,054
  -3,210
  -3,373
  -3,545
  -3,725
  -3,913
  -4,111
  -4,319
  -4,537
  -4,765
New CAPEX, $m
  -1,130
  -779
  -808
  -844
  -881
  -920
  -962
  -1,006
  -1,052
  -1,101
  -1,152
  -1,206
  -1,263
  -1,323
  -1,387
  -1,453
  -1,523
  -1,596
  -1,674
  -1,755
  -1,841
  -1,931
  -2,025
  -2,124
  -2,229
  -2,339
  -2,454
  -2,575
  -2,703
  -2,836
  -2,977
Cash from investing activities, $m
  3,662
  -1,855
  -1,947
  -2,048
  -2,153
  -2,264
  -2,380
  -2,501
  -2,628
  -2,762
  -2,902
  -3,049
  -3,203
  -3,365
  -3,536
  -3,714
  -3,901
  -4,097
  -4,303
  -4,519
  -4,747
  -4,985
  -5,235
  -5,497
  -5,774
  -6,064
  -6,367
  -6,686
  -7,022
  -7,373
  -7,742
Free cash flow, $m
  6,183
  336
  379
  420
  463
  508
  554
  603
  655
  709
  765
  782
  844
  909
  978
  1,050
  1,126
  1,206
  1,291
  1,379
  1,473
  1,572
  1,675
  1,785
  1,900
  2,022
  2,150
  2,286
  2,428
  2,579
  2,737
Issuance/(repayment) of debt, $m
  -573
  568
  590
  616
  643
  672
  703
  735
  768
  804
  842
  881
  923
  967
  1,013
  1,061
  1,112
  1,166
  1,222
  1,282
  1,344
  1,410
  1,479
  1,552
  1,628
  1,708
  1,792
  1,881
  1,974
  2,071
  2,174
Issuance/(repurchase) of shares, $m
  -4,089
  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  
  -4,661
  568
  590
  616
  643
  672
  703
  735
  768
  804
  842
  881
  923
  967
  1,013
  1,061
  1,112
  1,166
  1,222
  1,282
  1,344
  1,410
  1,479
  1,552
  1,628
  1,708
  1,792
  1,881
  1,974
  2,071
  2,174
Total cash flow (excl. dividends), $m
  1,436
  903
  969
  1,036
  1,106
  1,180
  1,257
  1,338
  1,423
  1,513
  1,607
  1,663
  1,767
  1,876
  1,991
  2,111
  2,238
  2,372
  2,513
  2,661
  2,817
  2,982
  3,155
  3,337
  3,528
  3,730
  3,943
  4,166
  4,402
  4,650
  4,911
Retained Cash Flow (-), $m
  895
  -763
  -779
  -813
  -849
  -887
  -928
  -970
  -1,015
  -1,062
  -1,111
  -1,163
  -1,218
  -1,276
  -1,337
  -1,401
  -1,468
  -1,539
  -1,614
  -1,692
  -1,775
  -1,861
  -1,953
  -2,048
  -2,149
  -2,255
  -2,366
  -2,483
  -2,606
  -2,735
  -2,870
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
 
  5,175
  190
  223
  257
  292
  330
  368
  409
  451
  495
  499
  548
  600
  654
  710
  770
  833
  899
  969
  1,043
  1,120
  1,202
  1,288
  1,379
  1,475
  1,577
  1,683
  1,796
  1,915
  2,041
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
 
  4,962
  174
  194
  212
  227
  239
  249
  255
  259
  260
  237
  234
  228
  219
  209
  196
  181
  166
  149
  132
  116
  100
  84
  70
  57
  46
  36
  28
  21
  15
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

Corning Incorporated is engaged in manufacturing specialty glass and ceramics. Its segments include Display Technologies, Optical Communications, Environmental Technologies, Specialty Materials, Life Sciences and All Other. The Display Technologies segment manufactures glass substrates for flat panel liquid crystal displays (LCDs). The Optical Communications segment manufactures carrier and enterprise network components for the telecommunications industry. The Environmental Technologies segment manufactures ceramic substrates and filters for automotive and diesel emission control applications. As of December 31, 2016, the Specialty Materials segment manufactured products, which provided more than 150 material formulations for glass, glass ceramics and fluoride crystals. The Life Sciences segment manufactures glass and plastic labware, equipment, media and reagents. The All Other segment consists of its Pharmaceutical Technologies business and non-LCD glass business, and among others.

FINANCIAL RATIOS  of  Corning (GLW)

Valuation Ratios
P/E Ratio 7.5
Price to Sales 3
Price to Book 1.6
Price to Tangible Book
Price to Cash Flow 11
Price to Free Cash Flow 20
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 5.8% 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 903.194 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 $27.2 billion.

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Financial statements 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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