Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Express Scripts Holding Co., FCFE calculation
US$ in thousands
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
The financial performance between 2013 and 2017 demonstrates a general upward trajectory in cash generation, characterized by steady operational growth and significant volatility in the cash available to equity holders.
- Net Cash Flows from Operating Activities
- Operating cash flows remained relatively stable over the analyzed period, beginning at US$ 4.77 billion in 2013 and concluding at US$ 5.35 billion in 2017. Aside from a slight contraction in 2014, the trend reflects a consistent capacity to generate liquidity from core business operations, with a compounded increase observed from 2015 through 2017.
- Free Cash Flow to Equity (FCFE) Trends
- FCFE exhibited substantial variance compared to the stability of operating cash flows. A significant growth phase occurred between 2013 and 2015, with FCFE rising from US$ 2.41 billion to a peak of US$ 6.66 billion. This peak was followed by a sharp decline in 2016 to US$ 4.64 billion, before rebounding to US$ 5.55 billion in 2017.
- Comparative Analysis of CFO and FCFE
- A critical divergence is observed in 2015, where FCFE substantially exceeded net cash flows from operating activities. This anomaly suggests that the increase in cash available to shareholders was driven by factors outside of operations, such as significant new debt issuance or a substantial reduction in capital expenditures. Conversely, during 2013 and 2014, FCFE remained below operating cash flows, indicating that capital investments or debt repayments exceeded new borrowings during those periods.
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Price to FCFE Ratio, Current
Express Scripts Holding Co., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 563,860,000 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 5,552,600) |
| FCFE per share | 9.85 |
| Current share price (P) | 96.97 |
| Valuation Ratio | |
| P/FCFE | 9.85 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Abbott Laboratories | 32.90 |
| Elevance Health Inc. | 24.18 |
| Intuitive Surgical Inc. | 63.02 |
| Medtronic PLC | 30.62 |
| UnitedHealth Group Inc. | 21.02 |
Based on: 10-K (reporting date: 2017-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Express Scripts Holding Co., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 564,347,000 | 605,720,000 | 668,046,000 | 726,898,000 | 776,032,000 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 5,552,600) | 4,643,300) | 6,661,600) | 3,768,200) | 2,414,300) | |
| FCFE per share3 | 9.84 | 7.67 | 9.97 | 5.18 | 3.11 | |
| Share price1, 4 | 78.64 | 69.63 | 68.65 | 86.72 | 77.12 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 7.99 | 9.08 | 6.88 | 16.73 | 24.79 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 Data adjusted for splits and stock dividends.
3 2017 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 5,552,600,000 ÷ 564,347,000 = 9.84
4 Closing price as at the filing date of Express Scripts Holding Co. Annual Report.
5 2017 Calculation
P/FCFE = Share price ÷ FCFE per share
= 78.64 ÷ 9.84 = 7.99
6 Click competitor name to see calculations.
Between 2013 and 2017, a significant decompression in the valuation multiple relative to Free Cash Flow to Equity (FCFE) occurred. While the share price exhibited moderate volatility, the capacity to generate FCFE per share grew substantially, leading to a consistently lower P/FCFE ratio over the period.
- Free Cash Flow to Equity (FCFE) per Share
- A strong upward trend is observed in FCFE per share, which increased from 3.11 US$ in 2013 to 9.84 US$ in 2017. A notable surge occurred in 2015, where FCFE per share reached 9.97 US$, representing a more than three-fold increase compared to the 2013 baseline.
- Share Price Performance
- The share price showed fluctuations throughout the period, peaking at 86.72 US$ in 2014 before declining to 68.65 US$ in 2015. A gradual recovery followed, with the price rising to 78.64 US$ by the end of 2017.
- Price to FCFE (P/FCFE) Ratio
- The P/FCFE ratio experienced a sharp decline from 24.79 in 2013 to a low of 6.88 in 2015. This compression indicates that the growth in cash flow generation significantly outpaced the growth in the market price of the shares. Following 2015, the ratio remained relatively stable in the single digits, ending the period at 7.99 in 2017, suggesting a fundamental shift in the valuation of the company's cash flow generation capabilities.
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