Intrinsic value of Ensign Energy Services Inc. - ESI

Previous Close

$6.39

  Intrinsic Value

$2.94

stock screener

  Rating & Target

str. sell

-54%

Previous close

$6.39

 
Intrinsic value

$2.94

 
Up/down potential

-54%

 
Rating

str. sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of ESI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -38.17
  31.80
  29.12
  26.71
  24.54
  22.58
  20.83
  19.24
  17.82
  16.54
  15.38
  14.34
  13.41
  12.57
  11.81
  11.13
  10.52
  9.97
  9.47
  9.02
  8.62
  8.26
  7.93
  7.64
  7.38
  7.14
  6.92
  6.73
  6.56
  6.40
  6.26
Revenue, $m
  860
  1,133
  1,464
  1,854
  2,309
  2,831
  3,421
  4,079
  4,806
  5,600
  6,462
  7,389
  8,379
  9,433
  10,547
  11,721
  12,954
  14,245
  15,593
  17,000
  18,466
  19,991
  21,577
  23,225
  24,938
  26,718
  28,568
  30,491
  32,490
  34,571
  36,736
Variable operating expenses, $m
 
  986
  1,273
  1,613
  2,009
  2,463
  2,976
  3,549
  4,181
  4,872
  5,622
  6,428
  7,290
  8,206
  9,176
  10,197
  11,270
  12,393
  13,566
  14,790
  16,065
  17,392
  18,772
  20,206
  21,696
  23,244
  24,854
  26,527
  28,267
  30,077
  31,960
Fixed operating expenses, $m
 
  300
  308
  316
  323
  332
  340
  348
  357
  366
  375
  384
  394
  404
  414
  424
  435
  446
  457
  468
  480
  492
  504
  517
  530
  543
  557
  571
  585
  600
  615
Total operating expenses, $m
  1,034
  1,286
  1,581
  1,929
  2,332
  2,795
  3,316
  3,897
  4,538
  5,238
  5,997
  6,812
  7,684
  8,610
  9,590
  10,621
  11,705
  12,839
  14,023
  15,258
  16,545
  17,884
  19,276
  20,723
  22,226
  23,787
  25,411
  27,098
  28,852
  30,677
  32,575
Operating income, $m
  -174
  -153
  -118
  -74
  -23
  37
  105
  182
  268
  362
  465
  576
  695
  822
  957
  1,099
  1,249
  1,406
  1,570
  1,742
  1,920
  2,107
  2,301
  2,502
  2,712
  2,930
  3,157
  3,393
  3,639
  3,895
  4,161
EBITDA, $m
  176
  310
  480
  683
  920
  1,192
  1,501
  1,847
  2,230
  2,649
  3,103
  3,593
  4,117
  4,674
  5,263
  5,885
  6,538
  7,222
  7,937
  8,683
  9,460
  10,269
  11,110
  11,985
  12,894
  13,839
  14,821
  15,842
  16,905
  18,010
  19,160
Interest expense (income), $m
  31
  28
  46
  67
  92
  122
  155
  193
  236
  283
  334
  390
  450
  514
  581
  653
  729
  809
  892
  979
  1,070
  1,164
  1,263
  1,365
  1,472
  1,582
  1,697
  1,816
  1,941
  2,070
  2,204
Earnings before tax, $m
  -205
  -181
  -163
  -142
  -116
  -85
  -51
  -12
  32
  79
  131
  186
  246
  309
  376
  446
  520
  597
  678
  763
  851
  942
  1,038
  1,137
  1,240
  1,348
  1,460
  1,577
  1,698
  1,825
  1,957
Tax expense, $m
  -54
  0
  0
  0
  0
  0
  0
  0
  9
  21
  35
  50
  66
  83
  101
  120
  140
  161
  183
  206
  230
  254
  280
  307
  335
  364
  394
  426
  459
  493
  528
Net income, $m
  -151
  -181
  -163
  -142
  -116
  -85
  -51
  -12
  23
  58
  95
  136
  179
  225
  274
  326
  379
  436
  495
  557
  621
  688
  757
  830
  905
  984
  1,066
  1,151
  1,240
  1,332
  1,429

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  30
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  3,214
  4,198
  5,421
  6,868
  8,554
  10,485
  12,669
  15,107
  17,798
  20,742
  23,932
  27,365
  31,035
  34,936
  39,062
  43,411
  47,976
  52,758
  57,754
  62,964
  68,392
  74,040
  79,913
  86,018
  92,362
  98,955
  105,806
  112,929
  120,335
  128,040
  136,058
Adjusted assets (=assets-cash), $m
  3,184
  4,198
  5,421
  6,868
  8,554
  10,485
  12,669
  15,107
  17,798
  20,742
  23,932
  27,365
  31,035
  34,936
  39,062
  43,411
  47,976
  52,758
  57,754
  62,964
  68,392
  74,040
  79,913
  86,018
  92,362
  98,955
  105,806
  112,929
  120,335
  128,040
  136,058
Revenue / Adjusted assets
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
Average production assets, $m
  3,090
  4,073
  5,259
  6,663
  8,298
  10,172
  12,290
  14,655
  17,266
  20,122
  23,217
  26,547
  30,107
  33,892
  37,895
  42,113
  46,542
  51,181
  56,027
  61,082
  66,348
  71,827
  77,525
  83,447
  89,601
  95,997
  102,644
  109,553
  116,738
  124,213
  131,991
Working capital, $m
  -11
  122
  158
  200
  249
  306
  369
  441
  519
  605
  698
  798
  905
  1,019
  1,139
  1,266
  1,399
  1,538
  1,684
  1,836
  1,994
  2,159
  2,330
  2,508
  2,693
  2,886
  3,085
  3,293
  3,509
  3,734
  3,967
Total debt, $m
  717
  1,119
  1,639
  2,254
  2,970
  3,791
  4,719
  5,755
  6,899
  8,150
  9,506
  10,965
  12,525
  14,183
  15,937
  17,784
  19,725
  21,757
  23,880
  26,095
  28,402
  30,802
  33,298
  35,893
  38,589
  41,391
  44,303
  47,330
  50,477
  53,752
  57,160
Total liabilities, $m
  1,382
  1,784
  2,304
  2,919
  3,635
  4,456
  5,384
  6,420
  7,564
  8,815
  10,171
  11,630
  13,190
  14,848
  16,602
  18,449
  20,390
  22,422
  24,545
  26,760
  29,067
  31,467
  33,963
  36,558
  39,254
  42,056
  44,968
  47,995
  51,142
  54,417
  57,825
Total equity, $m
  1,832
  2,414
  3,117
  3,949
  4,918
  6,029
  7,285
  8,686
  10,234
  11,926
  13,761
  15,735
  17,845
  20,088
  22,461
  24,961
  27,586
  30,336
  33,208
  36,205
  39,326
  42,573
  45,950
  49,460
  53,108
  56,899
  60,839
  64,934
  69,193
  73,623
  78,233
Total liabilities and equity, $m
  3,214
  4,198
  5,421
  6,868
  8,553
  10,485
  12,669
  15,106
  17,798
  20,741
  23,932
  27,365
  31,035
  34,936
  39,063
  43,410
  47,976
  52,758
  57,753
  62,965
  68,393
  74,040
  79,913
  86,018
  92,362
  98,955
  105,807
  112,929
  120,335
  128,040
  136,058
Debt-to-equity ratio
  0.391
  0.460
  0.530
  0.570
  0.600
  0.630
  0.650
  0.660
  0.670
  0.680
  0.690
  0.700
  0.700
  0.710
  0.710
  0.710
  0.720
  0.720
  0.720
  0.720
  0.720
  0.720
  0.720
  0.730
  0.730
  0.730
  0.730
  0.730
  0.730
  0.730
  0.730
Adjusted equity ratio
  0.566
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -151
  -181
  -163
  -142
  -116
  -85
  -51
  -12
  23
  58
  95
  136
  179
  225
  274
  326
  379
  436
  495
  557
  621
  688
  757
  830
  905
  984
  1,066
  1,151
  1,240
  1,332
  1,429
Depreciation, amort., depletion, $m
  350
  463
  598
  757
  943
  1,156
  1,397
  1,665
  1,962
  2,287
  2,638
  3,017
  3,421
  3,851
  4,306
  4,786
  5,289
  5,816
  6,367
  6,941
  7,540
  8,162
  8,810
  9,483
  10,182
  10,909
  11,664
  12,449
  13,266
  14,115
  14,999
Funds from operations, $m
  160
  282
  434
  616
  827
  1,071
  1,346
  1,654
  1,985
  2,344
  2,734
  3,153
  3,601
  4,077
  4,580
  5,111
  5,668
  6,252
  6,862
  7,498
  8,160
  8,850
  9,567
  10,313
  11,087
  11,893
  12,730
  13,600
  14,505
  15,447
  16,428
Change in working capital, $m
  -5
  30
  36
  42
  49
  56
  64
  71
  78
  86
  93
  100
  107
  114
  120
  127
  133
  139
  146
  152
  158
  165
  171
  178
  185
  192
  200
  208
  216
  225
  234
Cash from operations, $m
  165
  252
  398
  573
  778
  1,014
  1,282
  1,583
  1,907
  2,259
  2,641
  3,053
  3,494
  3,963
  4,460
  4,984
  5,535
  6,113
  6,716
  7,346
  8,002
  8,685
  9,396
  10,135
  10,902
  11,701
  12,530
  13,393
  14,289
  15,223
  16,194
Maintenance CAPEX, $m
  0
  -351
  -463
  -598
  -757
  -943
  -1,156
  -1,397
  -1,665
  -1,962
  -2,287
  -2,638
  -3,017
  -3,421
  -3,851
  -4,306
  -4,786
  -5,289
  -5,816
  -6,367
  -6,941
  -7,540
  -8,162
  -8,810
  -9,483
  -10,182
  -10,909
  -11,664
  -12,449
  -13,266
  -14,115
New CAPEX, $m
  -43
  -983
  -1,186
  -1,404
  -1,635
  -1,874
  -2,118
  -2,365
  -2,611
  -2,855
  -3,095
  -3,330
  -3,560
  -3,784
  -4,003
  -4,218
  -4,429
  -4,638
  -4,847
  -5,055
  -5,265
  -5,479
  -5,698
  -5,922
  -6,154
  -6,396
  -6,647
  -6,910
  -7,185
  -7,474
  -7,779
Cash from investing activities, $m
  -53
  -1,334
  -1,649
  -2,002
  -2,392
  -2,817
  -3,274
  -3,762
  -4,276
  -4,817
  -5,382
  -5,968
  -6,577
  -7,205
  -7,854
  -8,524
  -9,215
  -9,927
  -10,663
  -11,422
  -12,206
  -13,019
  -13,860
  -14,732
  -15,637
  -16,578
  -17,556
  -18,574
  -19,634
  -20,740
  -21,894
Free cash flow, $m
  112
  -1,082
  -1,250
  -1,429
  -1,614
  -1,803
  -1,992
  -2,179
  -2,370
  -2,559
  -2,741
  -2,916
  -3,083
  -3,243
  -3,395
  -3,540
  -3,680
  -3,815
  -3,946
  -4,076
  -4,204
  -4,333
  -4,464
  -4,597
  -4,735
  -4,877
  -5,025
  -5,181
  -5,345
  -5,517
  -5,700
Issuance/(repayment) of debt, $m
  -49
  432
  520
  615
  716
  821
  928
  1,036
  1,144
  1,251
  1,356
  1,459
  1,560
  1,658
  1,754
  1,848
  1,940
  2,032
  2,123
  2,215
  2,307
  2,400
  2,496
  2,595
  2,696
  2,802
  2,912
  3,027
  3,148
  3,274
  3,408
Issuance/(repurchase) of shares, $m
  -2
  763
  866
  974
  1,085
  1,196
  1,306
  1,413
  1,525
  1,635
  1,739
  1,838
  1,931
  2,018
  2,099
  2,175
  2,246
  2,313
  2,378
  2,440
  2,500
  2,560
  2,620
  2,680
  2,742
  2,807
  2,874
  2,944
  3,019
  3,098
  3,182
Cash from financing (excl. dividends), $m  
  -53
  1,195
  1,386
  1,589
  1,801
  2,017
  2,234
  2,449
  2,669
  2,886
  3,095
  3,297
  3,491
  3,676
  3,853
  4,023
  4,186
  4,345
  4,501
  4,655
  4,807
  4,960
  5,116
  5,275
  5,438
  5,609
  5,786
  5,971
  6,167
  6,372
  6,590
Total cash flow (excl. dividends), $m
  55
  114
  136
  161
  187
  214
  242
  271
  299
  327
  354
  381
  407
  433
  458
  483
  507
  531
  554
  578
  602
  627
  652
  677
  704
  732
  760
  790
  822
  855
  890
Retained Cash Flow (-), $m
  255
  -763
  -866
  -974
  -1,085
  -1,196
  -1,306
  -1,413
  -1,548
  -1,692
  -1,835
  -1,974
  -2,110
  -2,243
  -2,373
  -2,500
  -2,625
  -2,749
  -2,873
  -2,996
  -3,121
  -3,248
  -3,377
  -3,510
  -3,648
  -3,791
  -3,940
  -4,095
  -4,259
  -4,430
  -4,610
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -649
  -731
  -813
  -898
  -982
  -1,064
  -1,143
  -1,249
  -1,366
  -1,481
  -1,593
  -1,703
  -1,810
  -1,915
  -2,018
  -2,119
  -2,219
  -2,318
  -2,418
  -2,519
  -2,621
  -2,725
  -2,833
  -2,944
  -3,059
  -3,179
  -3,305
  -3,437
  -3,575
  -3,721
Discount rate, %
 
  6.00
  6.30
  6.62
  6.95
  7.29
  7.66
  8.04
  8.44
  8.86
  9.31
  9.77
  10.26
  10.78
  11.31
  11.88
  12.47
  13.10
  13.75
  14.44
  15.16
  15.92
  16.72
  17.55
  18.43
  19.35
  20.32
  21.33
  22.40
  23.52
  24.70
PV of cash for distribution, $m
 
  -613
  -647
  -671
  -686
  -690
  -683
  -665
  -653
  -636
  -608
  -571
  -527
  -479
  -427
  -375
  -323
  -274
  -228
  -186
  -150
  -118
  -91
  -69
  -51
  -37
  -26
  -18
  -12
  -8
  -5
Current shareholders' claim on cash, %
  100
  62.7
  41.4
  28.7
  20.6
  15.3
  11.7
  9.1
  7.3
  5.9
  4.9
  4.1
  3.5
  3.0
  2.6
  2.3
  2.1
  1.8
  1.6
  1.5
  1.4
  1.2
  1.1
  1.1
  1.0
  0.9
  0.8
  0.8
  0.7
  0.7
  0.7

Ensign Energy Services Inc. is a Canada-based company engaged in the business of providing oilfield services to the oil and gas industry in Canada, the United States and internationally. The Company's oilfield services include drilling and well servicing, oil sands coring, directional services, underbalanced and managed pressure drilling, equipment rentals, wireline services and production testing/fracturing fluid (frac flowback) services. Its Canadian operations span over four western provinces of British Columbia, Alberta, Saskatchewan and Manitoba and include the Northwest Territories and the Yukon. In the United States, the Company operates in the Rocky Mountain and southern regions, as well as the states of California, Nevada, New Mexico, North Dakota, South Dakota, Nebraska, Pennsylvania and Michigan. Internationally, it operates in Australia, Argentina, Kurdistan, Libya, Oman and Venezuela. The Company owns a fleet approximately 220 land drilling rigs across the world.

FINANCIAL RATIOS  of  Ensign Energy Services Inc. (ESI)

Valuation Ratios
P/E Ratio -6.5
Price to Sales 1.1
Price to Book 0.5
Price to Tangible Book
Price to Cash Flow 5.9
Price to Free Cash Flow 8
Growth Rates
Sales Growth Rate -38.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -74.4%
Cap. Spend. - 3 Yr. Gr. Rate -33.9%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 31.8%
Total Debt to Equity 39.1%
Interest Coverage -6
Management Effectiveness
Return On Assets -3.8%
Ret/ On Assets - 3 Yr. Avg. -1.2%
Return On Total Capital -5.6%
Ret/ On T. Cap. - 3 Yr. Avg. -2.2%
Return On Equity -7.7%
Return On Equity - 3 Yr. Avg. -3.1%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 27.7%
Gross Margin - 3 Yr. Avg. 27.8%
EBITDA Margin 20.5%
EBITDA Margin - 3 Yr. Avg. 18.5%
Operating Margin -20.2%
Oper. Margin - 3 Yr. Avg. -7.4%
Pre-Tax Margin -23.8%
Pre-Tax Margin - 3 Yr. Avg. -9.5%
Net Profit Margin -17.6%
Net Profit Margin - 3 Yr. Avg. -7.3%
Effective Tax Rate 26.3%
Eff/ Tax Rate - 3 Yr. Avg. 27.5%
Payout Ratio -43.7%

ESI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ESI stock intrinsic value calculation we used $860 million for the last fiscal year's total revenue generated by Ensign Energy Services Inc.. The default revenue input number comes from 2016 income statement of Ensign Energy Services Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ESI stock valuation model: a) initial revenue growth rate of 31.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6%, whose default value for ESI is calculated based on our internal credit rating of Ensign Energy Services Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Ensign Energy Services Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ESI stock the variable cost ratio is equal to 87%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $293 million in the base year in the intrinsic value calculation for ESI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.1% for Ensign Energy Services Inc..

Corporate tax rate of 27% is the nominal tax rate for Ensign Energy Services Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ESI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ESI are equal to 359.3%.

Life of production assets of 8.8 years is the average useful life of capital assets used in Ensign Energy Services Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ESI is equal to 10.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1832 million for Ensign Energy Services Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 155.953 million for Ensign Energy Services Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Ensign Energy Services Inc. at the current share price and the inputted number of shares is $1.0 billion.

RELATED COMPANIES Price Int.Val. Rating
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Financial statements of ESI
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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