Using the Earnings Power Value framework with a WACC of 6.8% and normalized earnings of $494.1M, Revvity, Inc. has a fair value of $40.79 per share. The EPV range is $29.34 – $58.67 based on WACC sensitivity (5.3% – 8.3%).
| Low | Selected | High | |
|---|---|---|---|
| Normalized Earnings | 494 | 494 | 494 |
| (/) WACC | 8.3% | 6.8% | 5.3% |
| Enterprise Value | 5,919 | 7,215 | 9,238 |
| (-) Net debt | 2,596 | 2,596 | 2,596 |
| Equity Value | 3,322 | 4,618 | 6,642 |
| (/) Outstanding shares | 113 | 113 | 113 |
| Fair Price | $29.34 | $40.79 | $58.67 |
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.