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Earnings Power Value Calculator
What is a stock worth based purely on its current earning power, ignoring growth? Enter a ticker for live data — get EPV per share and a clear verdict on whether the market is paying a premium or a discount to that earning power, the Greenwald way.
Loaded values auto-fill below — adjust WACC (default 8%) to match the company's cost of capital. Not sure? Calculate your WACC.
Enter a ticker to value its earning power
Try AAPL, KO, or any US-listed company. The calculator pulls operating income (EBIT), D&A, the effective tax rate, shares outstanding, and the current price — then applies the Greenwald EPV method to tell you whether the stock trades at a premium or a discount to its current earning power.
What Earnings Power Value Measures
Value without a growth assumption
Earnings Power Value, developed by Bruce Greenwald at Columbia Business School, answers a deliberately narrow question: what is this business worth if it earns exactly what it earns today — forever — and never grows? You take adjusted operating income (EBIT plus D&A minus maintenance capex), tax it, and capitalize it at the cost of capital. No projections, no terminal value, no growth rate to argue about.
That restraint is the point. Growth is the assumption that does most of the damage in a valuation, and EPV removes it entirely. The result is a conservative floor you can defend with current filings alone.
The premium or discount is the signal
The headline number is not the EPV itself — it is the gap between EPV and the market value. When a stock trades above its EPV, the market is paying for growth that has not been earned yet. When it trades below, the market is valuing the business at less than its current earnings alone justify — a potential margin of safety.
This calculator states that gap in plain language: “trading at a 34% premium to earnings power” or “an 18% discount to earnings power.”
WACC is the only lever that matters
EPV capitalizes earnings at the weighted average cost of capital. Because the formula divides by WACC, the discount rate is the single assumption that moves the answer most — a shift from 8% to 10% cuts EPV by a fifth. Use the WACC calculator to derive a defensible rate from the company's actual capital structure.
A floor, not a price target
EPV is not meant to be a single fair value you buy and sell against. It is the base of the valuation — the no-growth floor. A full thesis layers a growth estimate on top, which is what a DCF does. Reading EPV and DCF together tells you how much of a stock's price rests on growth you still have to believe in.
EPV vs DCF vs Multiples
Current earning power, zero growth
Capitalizes today's sustainable after-tax operating income at WACC. No growth, no terminal value. The conservative floor and the sharpest reality check on a growth story.
Explicitly values growth
Projects future cash flows and discounts them back, with a terminal value for everything beyond the forecast. Powerful but assumption-heavy — growth and terminal value usually do most of the work.
Relative, not absolute
P/E, EV/EBITDA and peers tell you what the market pays for similar businesses today. Fast and market-anchored, but they inherit whatever optimism or pessimism is already in the comps.
Read the gap, not the number
Market value minus EPV is the growth premium being priced in. If the premium is large, your DCF has to justify a lot of future growth. If the market trades below EPV, start by asking whether current earnings are sustainable.
Frequently asked questions
What is Earnings Power Value (EPV)?
Earnings Power Value is a valuation method developed by Bruce Greenwald at Columbia Business School. It values a company on the assumption that its current earning power persists forever with zero growth. The formula is EPV = Adjusted Operating Income × (1 − Tax Rate) ÷ WACC, where adjusted operating income is EBIT plus D&A minus maintenance capex. Because it assigns no value to growth, EPV is a conservative floor — what the business is worth if it never grows again.
How is EPV different from DCF?
A DCF (discounted cash flow) model projects future cash flows and explicitly values growth, so its output depends heavily on growth and terminal-value assumptions. EPV strips growth out entirely and capitalizes only today's sustainable earnings at the cost of capital. The gap between a company's market value and its EPV is the growth premium the market is pricing in — so the two methods are complementary: EPV sets the floor, DCF estimates the growth on top. If a stock trades far above its EPV, the DCF has to justify a lot of future growth.
When is EPV most useful?
EPV is most useful for mature, stable businesses with predictable operating earnings — consumer staples, industrials, utilities — where current earning power is a fair proxy for the future. It is a powerful reality check on growth stories: if a company trades at a large premium to EPV, you are paying for growth that has not yet been earned. EPV is less reliable for cyclical companies at a peak or trough (current earnings mislead), early-stage or high-growth companies (almost all value is future growth), and financials, where capital is a product rather than an input.
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