Intrinsic value of NuVista Energy Ltd. - NVA

Previous Close

$6.66

  Intrinsic Value

$1.14

stock screener

  Rating & Target

str. sell

-83%

  Value-price divergence*

0%

Previous close

$6.66

 
Intrinsic value

$1.14

 
Up/down potential

-83%

 
Rating

str. sell

 
Value-price divergence*

0%

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

We calculate the intrinsic value of NVA 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 1.1

 

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, %
  16.44
  43.90
  40.01
  36.51
  33.36
  30.52
  27.97
  25.67
  23.61
  21.75
  20.07
  18.56
  17.21
  15.99
  14.89
  13.90
  13.01
  12.21
  11.49
  10.84
  10.25
  9.73
  9.26
  8.83
  8.45
  8.10
  7.79
  7.51
  7.26
  7.04
  6.83
Revenue, $m
  255
  367
  514
  701
  935
  1,221
  1,562
  1,963
  2,427
  2,954
  3,547
  4,206
  4,930
  5,718
  6,569
  7,482
  8,455
  9,487
  10,577
  11,724
  12,926
  14,184
  15,497
  16,865
  18,290
  19,772
  21,312
  22,914
  24,578
  26,307
  28,104
Variable operating expenses, $m
 
  665
  931
  1,271
  1,695
  2,212
  2,831
  3,557
  4,397
  5,353
  6,428
  7,621
  8,932
  10,360
  11,903
  13,557
  15,321
  17,191
  19,166
  21,243
  23,422
  25,701
  28,080
  30,559
  33,141
  35,826
  38,618
  41,520
  44,535
  47,668
  50,925
Fixed operating expenses, $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
Total operating expenses, $m
  241
  665
  931
  1,271
  1,695
  2,212
  2,831
  3,557
  4,397
  5,353
  6,428
  7,621
  8,932
  10,360
  11,903
  13,557
  15,321
  17,191
  19,166
  21,243
  23,422
  25,701
  28,080
  30,559
  33,141
  35,826
  38,618
  41,520
  44,535
  47,668
  50,925
Operating income, $m
  15
  -298
  -417
  -569
  -759
  -991
  -1,268
  -1,594
  -1,970
  -2,399
  -2,880
  -3,415
  -4,003
  -4,643
  -5,334
  -6,075
  -6,866
  -7,704
  -8,589
  -9,520
  -10,496
  -11,517
  -12,583
  -13,694
  -14,851
  -16,055
  -17,306
  -18,606
  -19,957
  -21,361
  -22,821
EBITDA, $m
  116
  -153
  -214
  -292
  -390
  -509
  -651
  -819
  -1,012
  -1,232
  -1,479
  -1,754
  -2,056
  -2,384
  -2,739
  -3,120
  -3,526
  -3,956
  -4,411
  -4,889
  -5,390
  -5,915
  -6,462
  -7,033
  -7,627
  -8,245
  -8,887
  -9,555
  -10,249
  -10,970
  -11,719
Interest expense (income), $m
  9
  5
  11
  19
  29
  42
  57
  76
  98
  123
  152
  184
  220
  259
  302
  349
  398
  451
  508
  567
  630
  695
  764
  835
  910
  987
  1,068
  1,152
  1,239
  1,330
  1,424
Earnings before tax, $m
  -3
  -303
  -428
  -588
  -788
  -1,033
  -1,326
  -1,670
  -2,068
  -2,522
  -3,032
  -3,599
  -4,223
  -4,902
  -5,636
  -6,424
  -7,264
  -8,155
  -9,096
  -10,087
  -11,125
  -12,212
  -13,347
  -14,530
  -15,761
  -17,042
  -18,374
  -19,758
  -21,197
  -22,691
  -24,245
Tax expense, $m
  -1
  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
Net income, $m
  -2
  -303
  -428
  -588
  -788
  -1,033
  -1,326
  -1,670
  -2,068
  -2,522
  -3,032
  -3,599
  -4,223
  -4,902
  -5,636
  -6,424
  -7,264
  -8,155
  -9,096
  -10,087
  -11,125
  -12,212
  -13,347
  -14,530
  -15,761
  -17,042
  -18,374
  -19,758
  -21,197
  -22,691
  -24,245

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  5
  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
  961
  1,374
  1,924
  2,627
  3,503
  4,572
  5,851
  7,353
  9,089
  11,065
  13,286
  15,752
  18,463
  21,414
  24,603
  28,022
  31,667
  35,534
  39,615
  43,909
  48,412
  53,122
  58,039
  63,165
  68,501
  74,051
  79,822
  85,819
  92,051
  98,528
  105,259
Adjusted assets (=assets-cash), $m
  956
  1,374
  1,924
  2,627
  3,503
  4,572
  5,851
  7,353
  9,089
  11,065
  13,286
  15,752
  18,463
  21,414
  24,603
  28,022
  31,667
  35,534
  39,615
  43,909
  48,412
  53,122
  58,039
  63,165
  68,501
  74,051
  79,822
  85,819
  92,051
  98,528
  105,259
Revenue / Adjusted assets
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
Average production assets, $m
  846
  1,218
  1,705
  2,327
  3,103
  4,050
  5,183
  6,514
  8,052
  9,803
  11,770
  13,955
  16,356
  18,971
  21,796
  24,825
  28,054
  31,479
  35,096
  38,899
  42,888
  47,061
  51,417
  55,958
  60,685
  65,602
  70,714
  76,028
  81,549
  87,286
  93,250
Working capital, $m
  -33
  -55
  -77
  -104
  -139
  -182
  -233
  -293
  -362
  -440
  -529
  -627
  -735
  -852
  -979
  -1,115
  -1,260
  -1,414
  -1,576
  -1,747
  -1,926
  -2,113
  -2,309
  -2,513
  -2,725
  -2,946
  -3,176
  -3,414
  -3,662
  -3,920
  -4,188
Total debt, $m
  67
  156
  274
  424
  612
  840
  1,114
  1,436
  1,807
  2,230
  2,705
  3,233
  3,813
  4,445
  5,127
  5,859
  6,639
  7,466
  8,340
  9,259
  10,222
  11,230
  12,282
  13,379
  14,521
  15,709
  16,944
  18,227
  19,561
  20,947
  22,388
Total liabilities, $m
  205
  294
  412
  562
  750
  978
  1,252
  1,574
  1,945
  2,368
  2,843
  3,371
  3,951
  4,583
  5,265
  5,997
  6,777
  7,604
  8,478
  9,397
  10,360
  11,368
  12,420
  13,517
  14,659
  15,847
  17,082
  18,365
  19,699
  21,085
  22,526
Total equity, $m
  756
  1,080
  1,512
  2,065
  2,753
  3,594
  4,599
  5,779
  7,144
  8,697
  10,443
  12,381
  14,512
  16,832
  19,338
  22,025
  24,891
  27,929
  31,138
  34,513
  38,052
  41,754
  45,619
  49,647
  53,841
  58,204
  62,740
  67,454
  72,352
  77,443
  82,734
Total liabilities and equity, $m
  961
  1,374
  1,924
  2,627
  3,503
  4,572
  5,851
  7,353
  9,089
  11,065
  13,286
  15,752
  18,463
  21,415
  24,603
  28,022
  31,668
  35,533
  39,616
  43,910
  48,412
  53,122
  58,039
  63,164
  68,500
  74,051
  79,822
  85,819
  92,051
  98,528
  105,260
Debt-to-equity ratio
  0.089
  0.140
  0.180
  0.210
  0.220
  0.230
  0.240
  0.250
  0.250
  0.260
  0.260
  0.260
  0.260
  0.260
  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
Adjusted equity ratio
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786
  0.786

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -2
  -303
  -428
  -588
  -788
  -1,033
  -1,326
  -1,670
  -2,068
  -2,522
  -3,032
  -3,599
  -4,223
  -4,902
  -5,636
  -6,424
  -7,264
  -8,155
  -9,096
  -10,087
  -11,125
  -12,212
  -13,347
  -14,530
  -15,761
  -17,042
  -18,374
  -19,758
  -21,197
  -22,691
  -24,245
Depreciation, amort., depletion, $m
  101
  145
  203
  277
  369
  482
  617
  775
  959
  1,167
  1,401
  1,661
  1,947
  2,258
  2,595
  2,955
  3,340
  3,748
  4,178
  4,631
  5,106
  5,603
  6,121
  6,662
  7,224
  7,810
  8,418
  9,051
  9,708
  10,391
  11,101
Funds from operations, $m
  126
  -158
  -225
  -311
  -419
  -551
  -709
  -894
  -1,110
  -1,355
  -1,631
  -1,938
  -2,275
  -2,644
  -3,041
  -3,469
  -3,924
  -4,408
  -4,918
  -5,456
  -6,020
  -6,610
  -7,226
  -7,868
  -8,537
  -9,232
  -9,955
  -10,707
  -11,488
  -12,300
  -13,144
Change in working capital, $m
  -1
  -17
  -22
  -28
  -35
  -43
  -51
  -60
  -69
  -79
  -88
  -98
  -108
  -117
  -127
  -136
  -145
  -154
  -162
  -171
  -179
  -187
  -196
  -204
  -212
  -221
  -230
  -239
  -248
  -258
  -268
Cash from operations, $m
  127
  -141
  -203
  -283
  -384
  -508
  -658
  -835
  -1,040
  -1,276
  -1,543
  -1,840
  -2,168
  -2,526
  -2,915
  -3,333
  -3,779
  -4,254
  -4,756
  -5,285
  -5,841
  -6,422
  -7,030
  -7,664
  -8,324
  -9,011
  -9,726
  -10,469
  -11,240
  -12,042
  -12,876
Maintenance CAPEX, $m
  0
  -101
  -145
  -203
  -277
  -369
  -482
  -617
  -775
  -959
  -1,167
  -1,401
  -1,661
  -1,947
  -2,258
  -2,595
  -2,955
  -3,340
  -3,748
  -4,178
  -4,631
  -5,106
  -5,603
  -6,121
  -6,662
  -7,224
  -7,810
  -8,418
  -9,051
  -9,708
  -10,391
New CAPEX, $m
  -192
  -372
  -487
  -622
  -776
  -947
  -1,133
  -1,331
  -1,538
  -1,751
  -1,967
  -2,185
  -2,401
  -2,615
  -2,824
  -3,029
  -3,230
  -3,425
  -3,616
  -3,804
  -3,989
  -4,173
  -4,356
  -4,541
  -4,727
  -4,917
  -5,112
  -5,313
  -5,521
  -5,738
  -5,964
Cash from investing activities, $m
  -117
  -473
  -632
  -825
  -1,053
  -1,316
  -1,615
  -1,948
  -2,313
  -2,710
  -3,134
  -3,586
  -4,062
  -4,562
  -5,082
  -5,624
  -6,185
  -6,765
  -7,364
  -7,982
  -8,620
  -9,279
  -9,959
  -10,662
  -11,389
  -12,141
  -12,922
  -13,731
  -14,572
  -15,446
  -16,355
Free cash flow, $m
  10
  -613
  -835
  -1,108
  -1,437
  -1,825
  -2,273
  -2,782
  -3,354
  -3,986
  -4,677
  -5,426
  -6,230
  -7,088
  -7,997
  -8,957
  -9,964
  -11,019
  -12,120
  -13,267
  -14,461
  -15,701
  -16,989
  -18,326
  -19,713
  -21,153
  -22,648
  -24,200
  -25,812
  -27,488
  -29,231
Issuance/(repayment) of debt, $m
  -130
  89
  118
  150
  188
  229
  274
  321
  371
  423
  475
  528
  580
  632
  682
  732
  780
  827
  874
  919
  964
  1,008
  1,052
  1,097
  1,142
  1,188
  1,235
  1,283
  1,334
  1,386
  1,441
Issuance/(repurchase) of shares, $m
  125
  632
  860
  1,140
  1,477
  1,873
  2,331
  2,851
  3,432
  4,075
  4,778
  5,538
  6,353
  7,222
  8,142
  9,112
  10,129
  11,194
  12,305
  13,462
  14,665
  15,914
  17,212
  18,558
  19,955
  21,405
  22,909
  24,472
  26,095
  27,782
  29,536
Cash from financing (excl. dividends), $m  
  -5
  721
  978
  1,290
  1,665
  2,102
  2,605
  3,172
  3,803
  4,498
  5,253
  6,066
  6,933
  7,854
  8,824
  9,844
  10,909
  12,021
  13,179
  14,381
  15,629
  16,922
  18,264
  19,655
  21,097
  22,593
  24,144
  25,755
  27,429
  29,168
  30,977
Total cash flow (excl. dividends), $m
  5
  108
  143
  182
  227
  277
  332
  390
  450
  513
  576
  640
  703
  765
  827
  887
  945
  1,003
  1,059
  1,114
  1,168
  1,222
  1,275
  1,329
  1,384
  1,439
  1,497
  1,555
  1,616
  1,680
  1,746
Retained Cash Flow (-), $m
  -126
  -632
  -860
  -1,140
  -1,477
  -1,873
  -2,331
  -2,851
  -3,432
  -4,075
  -4,778
  -5,538
  -6,353
  -7,222
  -8,142
  -9,112
  -10,129
  -11,194
  -12,305
  -13,462
  -14,665
  -15,914
  -17,212
  -18,558
  -19,955
  -21,405
  -22,909
  -24,472
  -26,095
  -27,782
  -29,536
Prev. year cash balance distribution, $m
 
  5
  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
 
  -519
  -717
  -958
  -1,250
  -1,596
  -1,999
  -2,461
  -2,982
  -3,563
  -4,202
  -4,898
  -5,650
  -6,456
  -7,315
  -8,225
  -9,184
  -10,191
  -11,246
  -12,348
  -13,497
  -14,693
  -15,936
  -17,229
  -18,571
  -19,965
  -21,413
  -22,917
  -24,479
  -26,102
  -27,790
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  -498
  -657
  -834
  -1,029
  -1,237
  -1,451
  -1,663
  -1,864
  -2,047
  -2,203
  -2,326
  -2,411
  -2,455
  -2,456
  -2,415
  -2,334
  -2,217
  -2,071
  -1,901
  -1,715
  -1,520
  -1,322
  -1,129
  -946
  -777
  -625
  -492
  -379
  -285
  -209
Current shareholders' claim on cash, %
  100
  63.5
  41.1
  27.1
  18.2
  12.4
  8.6
  6.0
  4.3
  3.1
  2.2
  1.6
  1.2
  0.9
  0.7
  0.5
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

NuVista Energy Ltd., an oil and natural gas company, explores, develops, and produces oil and natural gas reserves in Canada. It primarily focuses on the condensate-rich Montney formation in the Wapiti area of the Alberta Deep Basin. NuVista Energy Ltd. was founded in 2003 and is headquartered in Calgary, Canada.

FINANCIAL RATIOS  of  NuVista Energy Ltd. (NVA)

Valuation Ratios
P/E Ratio -575.3
Price to Sales 4.5
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 9.1
Price to Free Cash Flow -17.7
Growth Rates
Sales Growth Rate 16.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -31.4%
Cap. Spend. - 3 Yr. Gr. Rate -3.3%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 8.9%
Total Debt to Equity 8.9%
Interest Coverage 1
Management Effectiveness
Return On Assets 0.4%
Ret/ On Assets - 3 Yr. Avg. -7.2%
Return On Total Capital -0.2%
Ret/ On T. Cap. - 3 Yr. Avg. -9.4%
Return On Equity -0.3%
Return On Equity - 3 Yr. Avg. -11.7%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 63.1%
Gross Margin - 3 Yr. Avg. 62.4%
EBITDA Margin 42%
EBITDA Margin - 3 Yr. Avg. 38.3%
Operating Margin 5.5%
Oper. Margin - 3 Yr. Avg. -31.2%
Pre-Tax Margin -1.2%
Pre-Tax Margin - 3 Yr. Avg. -35.6%
Net Profit Margin -0.8%
Net Profit Margin - 3 Yr. Avg. -34.9%
Effective Tax Rate 33.3%
Eff/ Tax Rate - 3 Yr. Avg. 15.3%
Payout Ratio 0%

NVA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NVA stock intrinsic value calculation we used $255 million for the last fiscal year's total revenue generated by NuVista Energy Ltd.. The default revenue input number comes from 2016 income statement of NuVista Energy Ltd.. 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 NVA stock valuation model: a) initial revenue growth rate of 43.9% 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 4.3%, whose default value for NVA is calculated based on our internal credit rating of NuVista Energy Ltd., 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 NuVista Energy Ltd..
    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 NVA stock the variable cost ratio is equal to 181.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for NVA 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 6.8% for NuVista Energy Ltd..

Corporate tax rate of 27% is the nominal tax rate for NuVista Energy Ltd.. 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 NVA 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 NVA are equal to 331.8%.

Life of production assets of 8.4 years is the average useful life of capital assets used in NuVista Energy Ltd. 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 NVA is equal to -14.9%. 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 - $756 million for NuVista Energy Ltd. - 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 165.951 million for NuVista Energy Ltd. 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 NuVista Energy Ltd. at the current share price and the inputted number of shares is $1.1 billion.

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Stock chart of NVA Financial statements of NVA
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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