Corning Incorporated (GLW)

Conclusion

Corning Incorporated makes optical fibre and cables, glass for displays, specialty materials, automotive components and life sciences products. At a price of 115.95 USD on 2026-11-09, the company has a market capitalisation of 99.9 billion USD and an enterprise value of 105.5 billion USD.

The verdict is overvalued, with a margin of safety of -60.4%. The fair value band runs from 36.72 to 55.08 USD with a midpoint of 45.90 USD. The price-to-earnings ratio of 46.5 is well above the company's own ten-year median of 30.0, and the enterprise value to EBITDA of 22.3 is above its median of 11.2. The DCF gives 36.73 USD per share at a discount rate of 11.0%, and the fair value from historical multiples is 55.08 USD. The reverse DCF shows that the price implies growth of 21.8% a year, while revenue grew 6.7% a year over five years and free cash flow per share 9.6% a year.

What holds the case up: the balance sheet is strong, with an Altman Z-score of 4.74 and net debt to EBITDA of 1.2x, and cash conversion is high, with free cash flow at 114.5% of earnings over the trailing twelve months. What would break it: the price-to-book ratio of 7.31 against a ten-year median of 2.40 leaves little room for error, and return on invested capital of 14.2% sits only modestly above a WACC of 10.5%. The share count has also risen 2.2% a year over five years.

Financial health

Financial strength is green, because four measures are assessed as good: the Altman Z-score, net debt to EBITDA, interest coverage and the current ratio. The current ratio is 1.72x and the quick ratio 0.86x. Net debt to EBITDA is 1.2x, debt to equity 0.60 and interest coverage 8.8x. The Altman Z-score of 4.74 sits in the safe zone; that model was designed for manufacturers, and Corning is a manufacturer, so the reading applies. Insolvency risk: low, about 0.4% by the estimate of the Ohlson model over one to two years.

Earnings quality

Earnings quality is green. Free cash flow conversion is 114.5% on a trailing twelve-month basis and 98.0% over five years. The accrual ratio is -3.7%, meaning cash generation exceeds reported earnings. Stock-based compensation is 2.1% of revenue, and free cash flow after it is 2.09 billion USD. The share count rose 2.2% a year over five years, so the company has diluted shareholders rather than bought back stock. The Piotroski score is 8 out of 9, and the Beneish M-score of -2.36 points to an unlikely risk of earnings manipulation. The company beat estimates in all 8 of the last quarters, with an average surprise of 2.8%. Analysts raised the current-year estimate by 3.2% over 90 days and the next-year estimate by 5.1%, implying next-year EPS growth of 34.1%.

Profitability

Profitability is green. The gross margin is 36.4% against a ten-year median of 35.2%, the operating margin 16.6% against 12.7%, and the net margin 12.1% against 8.8%. Operating margin stability is 32.3%. Return on invested capital is 14.2% against a WACC of 10.5%, and the roic minus WACC value of 3.7% is labelled as creating value. The five-year median ROIC is 9.8%. Return on equity is 15.7%. The DuPont split shows a net margin of 10.2%, an asset turnover of 0.50 and an equity multiplier of 2.62, so leverage lifts the return on equity. Return on assets is the cleaner measure of the business.

Growth

Growth is green, with the EPS and next-year estimate assessed as good and revenue growth as neutral. Revenue compounded at 3.3% over three years, 6.7% over five and 5.5% over ten. EPS compounded at 6.5% over three years, 22.9% over five and 6.4% over ten. Free cash flow per share compounded at 11.7% over three years, 9.6% over five and 3.5% over ten. Revenue grew in 8 of the 10 years analysed.

Valuation

Valuation is red. The price-to-earnings ratio of 46.5 is a premium of 54.7% to its ten-year median of 30.0. Enterprise value to EBITDA of 22.3 carries a premium of 98.7% over a median of 11.2, and price to sales of 5.64 a premium of 119.7% over 2.57. Price to book of 7.31 carries a premium of 204.6% over 2.40. Price to free cash flow of 40.6 sits at a premium of -12.7% against a median of 46.5. The DCF gives 36.73 USD per share, using a discount rate of 11.0%, first-stage growth of 6.7% and terminal growth of 2.5%; the terminal value makes up 47.7% of it. The fair value band runs from 36.72 to 55.08 USD with a midpoint of 45.90 USD, a margin of safety of -60.4% at a price of 115.95 USD. The fair value from historical multiples is 55.08 USD. The reverse DCF implies growth of 21.8%. The fair value is built on fixed assumptions, including a 5% equity risk premium and capped growth, and is not a price target. The dividend yield is 1.0%, the forward yield 0.9%, and the payout on free cash flow 41.1%.

Risks

The main weakness is the valuation. A price-to-book ratio of 7.31 and an enterprise value to EBITDA of 22.3 mean the share price depends on sustained high returns; if return on invested capital fell toward the WACC of 10.5%, the 3.7% gap would shrink. The implied growth of 21.8% is far above the 6.7% five-year revenue rate, so the market expects a step-up that the company has not yet delivered. Dilution of 2.2% a year reduces the value per share for existing holders, and stock-based compensation of 2.1% of revenue adds to that cost. Leverage, with an equity multiplier of 2.62, flatters the return on equity. The company does not report a debt maturity schedule, and revenue by segment is not part of this analysis, so the refinancing profile and the performance of individual businesses cannot be judged here.