A strong performer from today's afternoon trading session is Corning, whose shares rose 1.7% to $49.47 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
Corning's Valuation Is in Line With Its Sector Averages:
Corning Incorporated engages in the display technologies, optical communications, environmental technologies, specialty materials, and life sciences businesses in the United States and internationally. The company belongs to the Industrials sector, which has an average price to earnings (P/E) ratio of 25.42 and an average price to book (P/B) ratio of 3.2. In contrast, Corning has a trailing 12 month P/E ratio of 260.4 and a P/B ratio of 3.63.
Corning has moved 68.6% over the last year compared to 32.0% for the S&P 500 — a difference of 36.6%. Corning has a 52 week high of $51.03 and a 52 week low of $28.3.
The Company's Revenues Are Declining:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $11,290 | $11,503 | $11,303 | $14,082 | $14,189 | $12,588 |
| Gross Margins | 40% | 35% | 31% | 36% | 32% | 31% |
| Net Margins | 9% | 8% | 5% | 14% | 9% | 5% |
| Net Income (M) | $1,066 | $960 | $512 | $1,906 | $1,316 | $581 |
| Net Interest Expense (M) | $191 | $221 | $276 | $300 | $292 | $329 |
| Depreciation & Amort. (M) | $1,199 | $1,390 | $1,399 | $129 | $123 | $122 |
| Diluted Shares (M) | 941 | 899 | 772 | 844 | 857 | 859 |
| Earnings Per Share | $1.13 | $1.07 | $0.54 | $1.28 | $1.54 | $0.68 |
| EPS Growth | n/a | -5.31% | -49.53% | 137.04% | 20.31% | -55.84% |
| Avg. Price | $26.65 | $27.5 | $26.49 | $37.55 | $35.09 | $49.55 |
| P/E Ratio | 22.39 | 24.77 | 49.06 | 28.88 | 22.49 | 71.81 |
| Free Cash Flow (M) | $677 | $53 | $803 | $1,775 | $1,011 | $615 |
| CAPEX (M) | $2,242 | $1,978 | $1,377 | $1,637 | $1,604 | $1,390 |
| EV / EBITDA | 9.55 | 9.99 | 13.38 | 15.06 | 22.37 | 47.13 |
| Total Debt (M) | $5,998 | $7,740 | $7,972 | $7,044 | $6,911 | $7,526 |
| Net Debt / EBITDA | 1.31 | 1.97 | 2.78 | 2.18 | 3.36 | 5.68 |
| Current Ratio | 2.12 | 2.12 | 2.12 | 1.59 | 1.44 | 1.67 |
Corning's financial statements include several red flags such as slight revenue growth and decreasing reinvestment in the business, slimmer gross margins than its peers, and declining EPS growth. Additionally, the firm has a highly leveraged balance sheet. On the other hand, the company has a decent current ratio of 1.67 working in its favor. Furthermore, Corning has positive cash flows.
