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I Asked ChatGPT How Much the Average Middle-Class Retiree Spends Monthly at Age 75: Here's What It Said
Retirement spending statistics are often valuable to consider, whether one is comparing and contrasting said figures with their budgetary situation as retirees or plotting a comfortable path to enjoy one's golden years. Read More: Find Out: ChatGPT is growing in popularity as an artificial intelligence (AI) research tool as well as a personal finance tipster, so it may be valuable to consult its take on exactly how much a middle-class retiree might be expected to spend when they reach age 75. Here's what it said — though, as always, it's best to take generative AI data with a pinch of salt. Using Fed and BLS Data as a Baseline ChatGPT gestured toward data from the Federal Reserve of St. Louis (FRED) and the Bureau of Labor Statistics (BLS) as its primary sources. However, on first glance, while the module did cite BLS table 1300 as an accurate source, it did not correctly identify $53,481 as the mean annual expenditure for Americans aged 75 and older (instead providing a much lower figure of $36,673) in 2022 survey data terms. Once course-corrected, however, ChatGPT provided the following breakdown of expenditures, inflation-adjusted for 2025. Housing: $29,145 Food: $7,249 Healthcare: $9,694 Transportation: $5,390 Entertainment: $2,696 Cash contributions (donations, gifts, alimony or child support): $3,851 Apparel and services: $1,219 Personal insurance: $963 Miscellaneous: $3,977 That amounts to a projected total of $64,184 in annual expenses for middle-class retirees in this age group in 2025. What the future holds is uncertain, and these figures may be less than concrete, but they do provide a general guideline as to what one can expect reality to look like. Discover Next: Key Expense Insights for Retirees Age 75 and Older A few notable pieces of insight that the LLM issued as part of a category breakdown included the fact that housing was, by far, the largest expense — 'even in mortgage-free households' — due to property taxes, maintenance, utilities and insurance. Healthcare did tick upward versus other age groups, logically, but was perhaps less than anticipated due to Medicare coverage. Cash contributions reflected a strong pattern of generosity and gifting within this age cohort, and transportation remained expensive (including gas, insurance and repairs) even though older Americans reported less driving frequency. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 I'm a Retired Boomer: 6 Bills I Canceled This Year That Were a Waste of Money Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck This article originally appeared on I Asked ChatGPT How Much the Average Middle-Class Retiree Spends Monthly at Age 75: Here's What It Said Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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With 80% institutional ownership, Axon Enterprise, Inc. (NASDAQ:AXON) is a favorite amongst the big guns
Key Insights Institutions' substantial holdings in Axon Enterprise implies that they have significant influence over the company's share price A total of 17 investors have a majority stake in the company with 50% ownership Insiders have been selling lately AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Every investor in Axon Enterprise, Inc. (NASDAQ:AXON) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 80% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn). Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future. In the chart below, we zoom in on the different ownership groups of Axon Enterprise. Check out our latest analysis for Axon Enterprise What Does The Institutional Ownership Tell Us About Axon Enterprise? Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing. We can see that Axon Enterprise does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Axon Enterprise, (below). Of course, keep in mind that there are other factors to consider, too. Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Axon Enterprise. The Vanguard Group, Inc. is currently the company's largest shareholder with 11% of shares outstanding. With 9.3% and 4.0% of the shares outstanding respectively, BlackRock, Inc. and State Street Global Advisors, Inc. are the second and third largest shareholders. Additionally, the company's CEO Patrick Smith directly holds 3.9% of the total shares outstanding. Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 17 shareholders, meaning that no single shareholder has a majority interest in the ownership. Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily. Insider Ownership Of Axon Enterprise The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO. I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions. Our most recent data indicates that insiders own some shares in Axon Enterprise, Inc.. It is a very large company, and board members collectively own US$2.6b worth of shares (at current prices). It is good to see this level of investment. You can check here to see if those insiders have been buying recently. General Public Ownership With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Axon Enterprise. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders. Next Steps: I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for Axon Enterprise you should be aware of. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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4 minutes ago
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Is There An Opportunity With IQVIA Holdings Inc.'s (NYSE:IQV) 39% Undervaluation?
Key Insights Using the 2 Stage Free Cash Flow to Equity, IQVIA Holdings fair value estimate is US$325 IQVIA Holdings' US$199 share price signals that it might be 39% undervalued Our fair value estimate is 56% higher than IQVIA Holdings' analyst price target of US$208 Today we will run through one way of estimating the intrinsic value of IQVIA Holdings Inc. (NYSE:IQV) by taking the expected future cash flows and discounting them to their present value. Our analysis will employ the Discounted Cash Flow (DCF) model. There's really not all that much to it, even though it might appear quite complex. We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Step By Step Through The Calculation We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars: 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Levered FCF ($, Millions) US$2.11b US$2.27b US$2.44b US$2.69b US$2.87b US$3.02b US$3.17b US$3.30b US$3.42b US$3.55b Growth Rate Estimate Source Analyst x6 Analyst x4 Analyst x2 Analyst x2 Est @ 6.55% Est @ 5.46% Est @ 4.71% Est @ 4.18% Est @ 3.81% Est @ 3.55% Present Value ($, Millions) Discounted @ 7.7% US$2.0k US$2.0k US$2.0k US$2.0k US$2.0k US$1.9k US$1.9k US$1.8k US$1.8k US$1.7k ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$19b The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.9%. We discount the terminal cash flows to today's value at a cost of equity of 7.7%. Terminal Value (TV)= FCF2035 × (1 + g) ÷ (r – g) = US$3.5b× (1 + 2.9%) ÷ (7.7%– 2.9%) = US$76b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$76b÷ ( 1 + 7.7%)10= US$36b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$55b. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of US$199, the company appears quite good value at a 39% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. The Assumptions Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at IQVIA Holdings as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.7%, which is based on a levered beta of 1.104. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Check out our latest analysis for IQVIA Holdings SWOT Analysis for IQVIA Holdings Strength Debt is well covered by earnings. Weakness Earnings declined over the past year. Opportunity Annual earnings are forecast to grow for the next 3 years. Trading below our estimate of fair value by more than 20%. Threat Debt is not well covered by operating cash flow. Annual earnings are forecast to grow slower than the American market. Moving On: Whilst important, the DCF calculation is only one of many factors that you need to assess for a company. It's not possible to obtain a foolproof valuation with a DCF model. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. What is the reason for the share price sitting below the intrinsic value? For IQVIA Holdings, we've compiled three essential elements you should consider: Risks: As an example, we've found 1 warning sign for IQVIA Holdings that you need to consider before investing here. Future Earnings: How does IQV's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NYSE every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
