Market Value Added (MVA)
Market value added (MVA) is the difference between a firm fair value and its invested capital. MVA is a measure of the value a company has created in excess of the resources already committed to the enterprise.
MVA
IQVIA Holdings Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
The company experienced a sustained increase in Market Value Added (MVA) from 2018 through 2021, followed by a moderate contraction in 2022. This trend indicates a period of significant wealth creation for shareholders, as the market valuation consistently exceeded the total invested capital by an increasing margin until the 2022 fiscal year.
- Market Value Trends
- The market value exhibited a consistent upward trajectory from 2018 to 2021, rising from US$ 39,598 million to a peak of US$ 56,976 million. A slight decline was recorded in 2022, with the value settling at US$ 54,928 million, though the valuation remained substantially higher than the 2018 baseline.
- Invested Capital Stability
- Invested capital remained relatively stable over the five-year period. Following a marginal decrease in 2019, the capital base grew gradually from US$ 20,313 million to US$ 21,926 million by December 31, 2022. The limited fluctuation in invested capital suggests a controlled growth in the resources deployed to generate returns.
- Market Value Added (MVA) Performance
- MVA grew from US$ 19,140 million in 2018 to US$ 35,735 million in 2021, representing a significant increase in the premium the market placed on the company above its book value. The reduction to US$ 33,002 million in 2022 correlates directly with the dip in fair market value, as the invested capital continued to rise slightly. This trajectory suggests that while the company continued to create value, the rate of market appreciation slowed in the final year of the period.
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MVA Spread Ratio
IQVIA Holdings Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 33,002) | 35,735) | 29,296) | 24,159) | 19,140) | |
| Invested capital2 | 21,926) | 21,241) | 21,108) | 20,313) | 20,458) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 150.51% | 168.24% | 138.79% | 118.93% | 93.56% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| AbbVie Inc. | 297.39% | 253.64% | — | — | — | |
| Amgen Inc. | 308.27% | 303.88% | — | — | — | |
| Bristol-Myers Squibb Co. | 160.91% | 138.81% | — | — | — | |
| Danaher Corp. | 156.95% | 187.44% | — | — | — | |
| Eli Lilly & Co. | 1,240.67% | 834.21% | — | — | — | |
| Gilead Sciences Inc. | 175.26% | 119.58% | — | — | — | |
| Johnson & Johnson | 288.40% | 366.82% | — | — | — | |
| Merck & Co. Inc. | 312.72% | 223.02% | — | — | — | |
| Pfizer Inc. | 124.43% | 210.66% | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 521.52% | 461.61% | — | — | — | |
| Thermo Fisher Scientific Inc. | 195.34% | 212.01% | — | — | — | |
| Vertex Pharmaceuticals Inc. | 484.09% | 564.91% | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2022 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 33,002 ÷ 21,926 = 150.51%
4 Click competitor name to see calculations.
An analysis of the financial performance from 2018 to 2022 reveals a period of substantial value creation followed by a moderate correction in the final year. The overall trend indicates a strong capacity to generate market value in excess of the capital invested.
- Market Value Added (MVA)
- MVA experienced consistent growth for four consecutive years, rising from US$ 19,140 million in 2018 to a peak of US$ 35,735 million in 2021. This represents a significant increase in the value created for shareholders over that period. However, a contraction occurred in 2022, with MVA decreasing to US$ 33,002 million, indicating a reduction in the market's premium over the invested capital.
- Invested Capital
- The capital base remained relatively stable throughout the observed timeframe. After a slight decrease in 2019 to US$ 20,313 million, invested capital trended steadily upward, reaching US$ 21,926 million by December 31, 2022. The stability of this figure suggests that the growth in market value was driven by operational efficiency and market perception rather than extensive capital expansion.
- MVA Spread Ratio
- The spread ratio showed a strong upward trajectory between 2018 and 2021, increasing from 93.56% to a peak of 168.24%. This expansion reflects a period where the market valuation grew at a significantly faster pace than the underlying invested capital. In 2022, the ratio declined to 150.51%, a result of the simultaneous decrease in MVA and the continued increase in invested capital.
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MVA Margin
IQVIA Holdings Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 33,002) | 35,735) | 29,296) | 24,159) | 19,140) | |
| Revenues | 14,410) | 13,874) | 11,359) | 11,088) | 10,412) | |
| Add: Increase (decrease) in unearned income | (28) | 573) | 238) | 7) | 22) | |
| Adjusted revenues | 14,382) | 14,447) | 11,597) | 11,095) | 10,434) | |
| Performance Ratio | ||||||
| MVA margin2 | 229.46% | 247.35% | 252.62% | 217.74% | 183.44% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| AbbVie Inc. | 420.74% | 432.93% | — | — | — | |
| Amgen Inc. | 493.74% | 503.37% | — | — | — | |
| Bristol-Myers Squibb Co. | 250.01% | 240.26% | — | — | — | |
| Danaher Corp. | 389.99% | 468.46% | — | — | — | |
| Eli Lilly & Co. | 1,055.71% | 769.37% | — | — | — | |
| Gilead Sciences Inc. | 295.97% | 211.56% | — | — | — | |
| Johnson & Johnson | 345.74% | 383.60% | — | — | — | |
| Merck & Co. Inc. | 390.05% | 323.90% | — | — | — | |
| Pfizer Inc. | 136.21% | 224.83% | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 525.04% | 312.14% | — | — | — | |
| Thermo Fisher Scientific Inc. | 360.17% | 431.35% | — | — | — | |
| Vertex Pharmaceuticals Inc. | 714.32% | 700.10% | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 MVA. See details »
2 2022 Calculation
MVA margin = 100 × MVA ÷ Adjusted revenues
= 100 × 33,002 ÷ 14,382 = 229.46%
3 Click competitor name to see calculations.
The financial trajectory between 2018 and 2022 reveals a period of substantial expansion in market valuation and revenue growth, followed by a marginal correction in the final year of the period.
- Market Value Added (MVA) Trends
- A consistent upward trend is observed from 2018 to 2021, with MVA increasing from US$ 19,140 million to a peak of US$ 35,735 million. This growth indicates a significant increase in the market's valuation of the company's invested capital. In 2022, this trend reversed, resulting in a decrease to US$ 33,002 million.
- Adjusted Revenue Growth
- Adjusted revenues grew steadily from US$ 10,434 million in 2018 to US$ 14,447 million in 2021. The most significant year-over-year increase occurred between 2020 and 2021. For the period ending December 31, 2022, revenues remained nearly stagnant, showing a slight decline to US$ 14,382 million.
- MVA Margin Analysis
- The MVA margin experienced a period of expansion from 2018 to 2020, rising from 183.44% to a peak of 252.62%. Subsequent to 2020, a contraction is observed, with the margin declining to 247.35% in 2021 and further to 229.46% in 2022. This suggests that while the company expanded its revenue base, the market's valuation premium relative to those revenues peaked in 2020 and has since trended downward.
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