EPV (earnings power value)
Per-share value of the business under the assumption of stable earnings, with no future growth. Comparing it with the market price shows whether the market is paying (only) for the current business or also for future growth.
EPV per share = EPV of equity ÷ Shares outstanding
It values the company assuming it never grows again: it takes normalized operating profit from recent years, removes taxes and capitalizes it at the WACC. It's Bruce Greenwald's method, and its virtue lies precisely in what it refuses to do — it projects nothing, so there are no growth assumptions to inflate the result.
It's used as a floor, not a target price. If the EPV already sits above the share price, you're buying the current business at a discount and future growth comes free. If it's far below, the market is paying for an expansion that hasn't happened yet — and that's where it's worth opening the DCF to see how much is needed.
It fits mature companies with stable margins, and cyclicals, where normalizing makes sense. In high-growth businesses it underestimates by construction: that's not a flaw in the arithmetic, it's what the method says about itself.
Where to see it on ValuatePad
Year by year, for every company, in the tab EPV & WACC valuation.