Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
IQVIA Holdings Inc., FCFE 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).
Between 2018 and 2022, cash flow dynamics exhibited a general upward trajectory, characterized by significant growth in operational efficiency through 2021 and a divergent relationship between operating cash flows and equity-available cash in the final year of the period.
- Net Cash Provided by Operating Activities
- A consistent growth trend was observed from 2018 to 2021, with cash provided by operating activities increasing from 1,254 million US$ to a peak of 2,942 million US$. This represents a substantial expansion in the core ability to generate cash. However, a reversal occurred in 2022, where operating cash flow declined by approximately 23% to 2,260 million US$, indicating a reduction in cash generation from primary business operations.
- Free Cash Flow to Equity (FCFE)
- FCFE demonstrated overall resilience and growth, ending the period at its highest valuation of 2,522 million US$ in 2022. After a moderate dip in 2019 to 1,535 million US$, the metric grew steadily for three consecutive years. Notably, the growth in FCFE continued into 2022 despite the decline in operating cash flows, suggesting that the company successfully optimized its capital expenditures or increased net borrowing to bolster cash available to shareholders.
- Comparative Analysis of Cash Flow Metrics
- The relationship between operating cash flow and FCFE shifted over the five-year duration. In 2018 and 2019, FCFE exceeded operating cash flow, implying a net inflow from financing activities or minimal capital expenditure. Conversely, in 2020 and 2021, operating cash flow surpassed FCFE, which typically indicates higher capital investments or debt repayments. By 2022, a divergence is observed where FCFE reached a period high (2,522 million US$) while operating cash flow declined (2,260 million US$), highlighting a disconnect between operational performance and the cash ultimately available to equity holders.
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Price to FCFE Ratio, Current
IQVIA Holdings Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 182,500,000 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 2,522) |
| FCFE per share | 13.82 |
| Current share price (P) | 180.01 |
| Valuation Ratio | |
| P/FCFE | 13.03 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| AbbVie Inc. | 29.44 |
| Amgen Inc. | 102.99 |
| Bristol-Myers Squibb Co. | 16.56 |
| Danaher Corp. | 25.56 |
| Eli Lilly & Co. | 74.83 |
| Gilead Sciences Inc. | 27.00 |
| Johnson & Johnson | 22.67 |
| Merck & Co. Inc. | 15.25 |
| Pfizer Inc. | 18.61 |
| Regeneron Pharmaceuticals Inc. | 24.85 |
| Thermo Fisher Scientific Inc. | 22.03 |
| Vertex Pharmaceuticals Inc. | 43.50 |
| P/FCFE, Sector | |
| Pharmaceuticals, Biotechnology & Life Sciences | 33.48 |
| P/FCFE, Industry | |
| Health Care | 27.92 |
Based on: 10-K (reporting date: 2022-12-31).
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
IQVIA Holdings Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 185,722,621 | 190,485,264 | 191,281,286 | 192,339,093 | 197,599,861 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 2,522) | 2,332) | 1,652) | 1,535) | 1,788) | |
| FCFE per share3 | 13.58 | 12.24 | 8.64 | 7.98 | 9.05 | |
| Share price1, 4 | 227.03 | 232.18 | 192.66 | 165.42 | 141.49 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 16.72 | 18.97 | 22.31 | 20.73 | 15.64 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| AbbVie Inc. | 22.66 | 18.76 | — | — | — | |
| Amgen Inc. | 8.32 | 13.52 | — | — | — | |
| Bristol-Myers Squibb Co. | 22.85 | 16.17 | — | — | — | |
| Danaher Corp. | 32.04 | 20.75 | — | — | — | |
| Eli Lilly & Co. | 60.51 | 35.17 | — | — | — | |
| Gilead Sciences Inc. | 15.22 | 12.70 | — | — | — | |
| Johnson & Johnson | 16.73 | 23.28 | — | — | — | |
| Merck & Co. Inc. | 22.40 | 18.72 | — | — | — | |
| Pfizer Inc. | 10.56 | 8.88 | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 25.12 | 10.35 | — | — | — | |
| Thermo Fisher Scientific Inc. | 27.98 | 13.44 | — | — | — | |
| Vertex Pharmaceuticals Inc. | 19.91 | 26.08 | — | — | — | |
| P/FCFE, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 19.44 | 16.49 | — | — | — | |
| P/FCFE, Industry | ||||||
| Health Care | 18.50 | 17.94 | — | — | — | |
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 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 2,522,000,000 ÷ 185,722,621 = 13.58
4 Closing price as at the filing date of IQVIA Holdings Inc. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 227.03 ÷ 13.58 = 16.72
6 Click competitor name to see calculations.
The financial trajectory from 2018 to 2022 is characterized by a significant appreciation in share price and a late-period acceleration in Free Cash Flow to Equity (FCFE) per share, which collectively influenced the valuation multiple.
- Share Price Evolution
- A consistent upward trend was observed from 2018 through 2021, with the price increasing from 141.49 to 232.18. A slight correction occurred in 2022, with the price settling at 227.03.
- FCFE per Share Performance
- Following a decrease from 9.05 in 2018 to 7.98 in 2019, FCFE per share entered a growth phase, increasing to 8.64 in 2020, 12.24 in 2021, and reaching a peak of 13.58 in 2022.
- Price to FCFE Ratio Analysis
- The P/FCFE ratio experienced an expansion phase between 2018 and 2020, rising from 15.64 to a peak of 22.31. This expansion indicates that share price growth outpaced the growth in cash flow available to equity holders. However, from 2021 onward, a contraction is observed, with the ratio declining to 18.97 in 2021 and further to 16.72 by 2022. This downward trend in the multiple is attributed to the acceleration of FCFE per share, which grew more rapidly than the share price during the final two years of the analyzed period, resulting in a more conservative valuation relative to cash flow generation.
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