Using the Earnings Power Value framework with a WACC of 7.7% and normalized earnings of $9.6B, Blackstone Inc. has a fair value of $146.00 per share. The EPV range is $119.82 – $184.87 based on WACC sensitivity (6.2% – 9.2%).
| Low | Selected | High | |
|---|---|---|---|
| Normalized Earnings | 9,643 | 9,643 | 9,643 |
| (/) WACC | 9.2% | 7.7% | 6.2% |
| Enterprise Value | 104,882 | 125,330 | 155,681 |
| (-) Net debt | 11,313 | 11,313 | 11,313 |
| Equity Value | 93,570 | 114,017 | 144,368 |
| (/) Outstanding shares | 781 | 781 | 781 |
| Fair Price | $119.82 | $146.00 | $184.87 |
Earnings Power Value (EPV) estimates what a company is worth based on its current normalized earnings, assuming zero growth. It values the business as a perpetuity: Normalized Earnings / WACC. This gives a conservative floor value — the company's worth if it never grows but maintains its current profitability.
The model normalizes earnings by: (1) using sustainable gross margins (5-year average) applied to current revenue, (2) deducting maintenance-level operating expenses (average R&D + SG&A as % of revenue), (3) applying the average effective tax rate, and (4) subtracting the average excess of CapEx over D&A (net reinvestment needed to maintain current capacity).
EPV is most useful as a comparison anchor: if the market price is below EPV, the stock may be undervalued even without any growth. If market price exceeds EPV, the premium reflects growth expectations — which may or may not materialize.