Intrinsic value of Coeur Mining - CDE

Previous Close

$8.78

  Intrinsic Value

$1.05

stock screener

  Rating & Target

str. sell

-88%

  Value-price divergence*

0%

Previous close

$8.78

 
Intrinsic value

$1.05

 
Up/down potential

-88%

 
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 CDE 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 1.6

 

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, %
  3.10
  39.20
  35.78
  32.70
  29.93
  27.44
  25.19
  23.18
  21.36
  19.72
  18.25
  16.92
  15.73
  14.66
  13.69
  12.82
  12.04
  11.34
  10.70
  10.13
  9.62
  9.16
  8.74
  8.37
  8.03
  7.73
  7.46
  7.21
  6.99
  6.79
  6.61
Revenue, $m
  666
  927
  1,259
  1,670
  2,170
  2,766
  3,463
  4,265
  5,176
  6,197
  7,328
  8,568
  9,916
  11,370
  12,927
  14,585
  16,341
  18,194
  20,141
  22,182
  24,316
  26,543
  28,863
  31,278
  33,790
  36,402
  39,115
  41,936
  44,866
  47,913
  51,080
Variable operating expenses, $m
 
  1,413
  1,918
  2,546
  3,308
  4,215
  5,277
  6,500
  7,889
  9,445
  11,168
  13,058
  15,113
  17,328
  19,701
  22,227
  24,904
  27,727
  30,695
  33,805
  37,057
  40,451
  43,987
  47,668
  51,496
  55,476
  59,612
  63,910
  68,376
  73,019
  77,846
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
  619
  1,413
  1,918
  2,546
  3,308
  4,215
  5,277
  6,500
  7,889
  9,445
  11,168
  13,058
  15,113
  17,328
  19,701
  22,227
  24,904
  27,727
  30,695
  33,805
  37,057
  40,451
  43,987
  47,668
  51,496
  55,476
  59,612
  63,910
  68,376
  73,019
  77,846
Operating income, $m
  47
  -486
  -660
  -875
  -1,137
  -1,449
  -1,815
  -2,235
  -2,712
  -3,247
  -3,840
  -4,490
  -5,196
  -5,958
  -6,774
  -7,642
  -8,563
  -9,533
  -10,554
  -11,623
  -12,741
  -13,908
  -15,124
  -16,390
  -17,706
  -19,074
  -20,496
  -21,974
  -23,510
  -25,106
  -26,766
EBITDA, $m
  170
  -377
  -512
  -680
  -883
  -1,125
  -1,409
  -1,736
  -2,106
  -2,522
  -2,982
  -3,486
  -4,035
  -4,626
  -5,260
  -5,935
  -6,649
  -7,403
  -8,195
  -9,026
  -9,894
  -10,800
  -11,744
  -12,727
  -13,749
  -14,812
  -15,916
  -17,064
  -18,256
  -19,496
  -20,784
Interest expense (income), $m
  42
  24
  49
  81
  121
  170
  228
  295
  373
  462
  561
  671
  791
  922
  1,063
  1,214
  1,375
  1,546
  1,725
  1,915
  2,113
  2,320
  2,536
  2,761
  2,996
  3,240
  3,493
  3,757
  4,030
  4,315
  4,611
Earnings before tax, $m
  1
  -510
  -709
  -957
  -1,259
  -1,619
  -2,042
  -2,530
  -3,086
  -3,709
  -4,401
  -5,161
  -5,987
  -6,880
  -7,837
  -8,857
  -9,938
  -11,079
  -12,279
  -13,538
  -14,854
  -16,228
  -17,660
  -19,151
  -20,702
  -22,314
  -23,990
  -25,731
  -27,540
  -29,421
  -31,377
Tax expense, $m
  -54
  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
  55
  -510
  -709
  -957
  -1,259
  -1,619
  -2,042
  -2,530
  -3,086
  -3,709
  -4,401
  -5,161
  -5,987
  -6,880
  -7,837
  -8,857
  -9,938
  -11,079
  -12,279
  -13,538
  -14,854
  -16,228
  -17,660
  -19,151
  -20,702
  -22,314
  -23,990
  -25,731
  -27,540
  -29,421
  -31,377

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  162
  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
  1,319
  1,610
  2,185
  2,900
  3,768
  4,802
  6,012
  7,405
  8,987
  10,759
  12,722
  14,876
  17,216
  19,740
  22,443
  25,321
  28,370
  31,586
  34,967
  38,510
  42,215
  46,081
  50,109
  54,303
  58,664
  63,197
  67,909
  72,805
  77,893
  83,182
  88,681
Adjusted assets (=assets-cash), $m
  1,157
  1,610
  2,185
  2,900
  3,768
  4,802
  6,012
  7,405
  8,987
  10,759
  12,722
  14,876
  17,216
  19,740
  22,443
  25,321
  28,370
  31,586
  34,967
  38,510
  42,215
  46,081
  50,109
  54,303
  58,664
  63,197
  67,909
  72,805
  77,893
  83,182
  88,681
Revenue / Adjusted assets
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
Average production assets, $m
  780
  1,086
  1,474
  1,956
  2,542
  3,239
  4,055
  4,995
  6,061
  7,257
  8,581
  10,034
  11,612
  13,314
  15,138
  17,079
  19,135
  21,305
  23,585
  25,975
  28,474
  31,081
  33,799
  36,627
  39,568
  42,626
  45,804
  49,106
  52,538
  56,106
  59,815
Working capital, $m
  294
  200
  272
  361
  469
  597
  748
  921
  1,118
  1,339
  1,583
  1,851
  2,142
  2,456
  2,792
  3,150
  3,530
  3,930
  4,350
  4,791
  5,252
  5,733
  6,234
  6,756
  7,299
  7,863
  8,449
  9,058
  9,691
  10,349
  11,033
Total debt, $m
  211
  410
  678
  1,011
  1,416
  1,898
  2,462
  3,111
  3,848
  4,674
  5,589
  6,592
  7,683
  8,859
  10,118
  11,459
  12,880
  14,379
  15,955
  17,606
  19,332
  21,134
  23,011
  24,965
  26,997
  29,110
  31,305
  33,587
  35,958
  38,423
  40,985
Total liabilities, $m
  550
  750
  1,018
  1,351
  1,756
  2,238
  2,802
  3,451
  4,188
  5,014
  5,929
  6,932
  8,023
  9,199
  10,458
  11,799
  13,220
  14,719
  16,295
  17,946
  19,672
  21,474
  23,351
  25,305
  27,337
  29,450
  31,645
  33,927
  36,298
  38,763
  41,325
Total equity, $m
  768
  859
  1,167
  1,549
  2,012
  2,564
  3,210
  3,954
  4,799
  5,745
  6,794
  7,944
  9,193
  10,541
  11,984
  13,521
  15,149
  16,867
  18,672
  20,565
  22,543
  24,607
  26,758
  28,998
  31,326
  33,747
  36,263
  38,878
  41,595
  44,419
  47,355
Total liabilities and equity, $m
  1,318
  1,609
  2,185
  2,900
  3,768
  4,802
  6,012
  7,405
  8,987
  10,759
  12,723
  14,876
  17,216
  19,740
  22,442
  25,320
  28,369
  31,586
  34,967
  38,511
  42,215
  46,081
  50,109
  54,303
  58,663
  63,197
  67,908
  72,805
  77,893
  83,182
  88,680
Debt-to-equity ratio
  0.275
  0.480
  0.580
  0.650
  0.700
  0.740
  0.770
  0.790
  0.800
  0.810
  0.820
  0.830
  0.840
  0.840
  0.840
  0.850
  0.850
  0.850
  0.850
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.870
  0.870
Adjusted equity ratio
  0.524
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  55
  -510
  -709
  -957
  -1,259
  -1,619
  -2,042
  -2,530
  -3,086
  -3,709
  -4,401
  -5,161
  -5,987
  -6,880
  -7,837
  -8,857
  -9,938
  -11,079
  -12,279
  -13,538
  -14,854
  -16,228
  -17,660
  -19,151
  -20,702
  -22,314
  -23,990
  -25,731
  -27,540
  -29,421
  -31,377
Depreciation, amort., depletion, $m
  123
  109
  147
  196
  254
  324
  405
  499
  606
  726
  858
  1,003
  1,161
  1,331
  1,514
  1,708
  1,914
  2,130
  2,359
  2,598
  2,847
  3,108
  3,380
  3,663
  3,957
  4,263
  4,580
  4,911
  5,254
  5,611
  5,981
Funds from operations, $m
  88
  -401
  -561
  -761
  -1,005
  -1,295
  -1,637
  -2,031
  -2,480
  -2,983
  -3,543
  -4,157
  -4,826
  -5,548
  -6,323
  -7,149
  -8,024
  -8,949
  -9,921
  -10,940
  -12,007
  -13,120
  -14,280
  -15,488
  -16,745
  -18,051
  -19,409
  -20,820
  -22,287
  -23,811
  -25,395
Change in working capital, $m
  -38
  56
  72
  89
  108
  129
  151
  173
  197
  221
  244
  268
  291
  314
  336
  358
  379
  400
  421
  441
  461
  481
  501
  522
  543
  564
  586
  609
  633
  658
  684
Cash from operations, $m
  126
  -457
  -633
  -850
  -1,113
  -1,424
  -1,787
  -2,204
  -2,676
  -3,204
  -3,787
  -4,425
  -5,117
  -5,862
  -6,659
  -7,507
  -8,404
  -9,349
  -10,342
  -11,381
  -12,468
  -13,601
  -14,782
  -16,010
  -17,288
  -18,616
  -19,995
  -21,429
  -22,920
  -24,469
  -26,079
Maintenance CAPEX, $m
  0
  -78
  -109
  -147
  -196
  -254
  -324
  -405
  -499
  -606
  -726
  -858
  -1,003
  -1,161
  -1,331
  -1,514
  -1,708
  -1,914
  -2,130
  -2,359
  -2,598
  -2,847
  -3,108
  -3,380
  -3,663
  -3,957
  -4,263
  -4,580
  -4,911
  -5,254
  -5,611
New CAPEX, $m
  -101
  -306
  -388
  -482
  -585
  -697
  -816
  -940
  -1,067
  -1,195
  -1,324
  -1,452
  -1,579
  -1,702
  -1,823
  -1,941
  -2,057
  -2,169
  -2,280
  -2,390
  -2,499
  -2,608
  -2,717
  -2,828
  -2,942
  -3,058
  -3,178
  -3,302
  -3,432
  -3,567
  -3,709
Cash from investing activities, $m
  -83
  -384
  -497
  -629
  -781
  -951
  -1,140
  -1,345
  -1,566
  -1,801
  -2,050
  -2,310
  -2,582
  -2,863
  -3,154
  -3,455
  -3,765
  -4,083
  -4,410
  -4,749
  -5,097
  -5,455
  -5,825
  -6,208
  -6,605
  -7,015
  -7,441
  -7,882
  -8,343
  -8,821
  -9,320
Free cash flow, $m
  43
  -841
  -1,130
  -1,479
  -1,894
  -2,376
  -2,927
  -3,550
  -4,243
  -5,005
  -5,837
  -6,736
  -7,699
  -8,726
  -9,814
  -10,962
  -12,168
  -13,432
  -14,752
  -16,130
  -17,564
  -19,056
  -20,607
  -22,218
  -23,892
  -25,630
  -27,436
  -29,312
  -31,262
  -33,290
  -35,399
Issuance/(repayment) of debt, $m
  -323
  211
  268
  333
  405
  482
  564
  649
  737
  826
  915
  1,003
  1,091
  1,176
  1,260
  1,341
  1,421
  1,499
  1,575
  1,651
  1,726
  1,802
  1,877
  1,954
  2,032
  2,113
  2,196
  2,282
  2,371
  2,465
  2,563
Issuance/(repurchase) of shares, $m
  270
  751
  1,016
  1,338
  1,722
  2,171
  2,688
  3,274
  3,930
  4,655
  5,449
  6,310
  7,237
  8,228
  9,280
  10,393
  11,566
  12,797
  14,085
  15,430
  16,832
  18,293
  19,811
  21,390
  23,031
  24,735
  26,506
  28,345
  30,257
  32,245
  34,313
Cash from financing (excl. dividends), $m  
  -80
  962
  1,284
  1,671
  2,127
  2,653
  3,252
  3,923
  4,667
  5,481
  6,364
  7,313
  8,328
  9,404
  10,540
  11,734
  12,987
  14,296
  15,660
  17,081
  18,558
  20,095
  21,688
  23,344
  25,063
  26,848
  28,702
  30,627
  32,628
  34,710
  36,876
Total cash flow (excl. dividends), $m
  -39
  121
  155
  192
  233
  278
  325
  374
  425
  476
  527
  578
  628
  678
  726
  773
  819
  864
  908
  952
  995
  1,038
  1,082
  1,126
  1,171
  1,217
  1,265
  1,315
  1,366
  1,420
  1,477
Retained Cash Flow (-), $m
  -347
  -751
  -1,016
  -1,338
  -1,722
  -2,171
  -2,688
  -3,274
  -3,930
  -4,655
  -5,449
  -6,310
  -7,237
  -8,228
  -9,280
  -10,393
  -11,566
  -12,797
  -14,085
  -15,430
  -16,832
  -18,293
  -19,811
  -21,390
  -23,031
  -24,735
  -26,506
  -28,345
  -30,257
  -32,245
  -34,313
Prev. year cash balance distribution, $m
 
  150
  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
 
  -480
  -862
  -1,146
  -1,489
  -1,894
  -2,363
  -2,900
  -3,506
  -4,180
  -4,922
  -5,732
  -6,609
  -7,550
  -8,554
  -9,621
  -10,747
  -11,933
  -13,177
  -14,479
  -15,838
  -17,254
  -18,730
  -20,264
  -21,860
  -23,518
  -25,240
  -27,031
  -28,891
  -30,825
  -32,836
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
 
  -460
  -789
  -998
  -1,226
  -1,468
  -1,715
  -1,959
  -2,191
  -2,401
  -2,580
  -2,722
  -2,820
  -2,871
  -2,872
  -2,824
  -2,731
  -2,596
  -2,427
  -2,229
  -2,012
  -1,785
  -1,554
  -1,328
  -1,113
  -915
  -736
  -580
  -447
  -336
  -247
Current shareholders' claim on cash, %
  100
  63.3
  40.5
  26.2
  17.1
  11.3
  7.5
  5.1
  3.4
  2.3
  1.6
  1.1
  0.8
  0.5
  0.4
  0.3
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Coeur Mining, Inc. owns, operates, explores for, and develops silver and gold properties. The company holds interests in the Palmarejo silver and gold mine located in Mexico; the Rochester silver and gold mine in northwestern Nevada; the Kensington gold mine located to the north of Juneau, Alaska; and the Wharf gold mine in South Dakota. It also owns interests in the San Bartolomé silver mine in Bolivia; the Endeavor zinc, lead, and silver mine located in Australia; the La Preciosa silver-gold exploration project in the State of Durango, Mexico; and the Joaquin silver-gold exploration project located in the Santa Cruz province of southern Argentina. Coeur Mining, Inc. markets its silver and gold concentrates to third-party refiners and smelters in the United States, China, and Japan. The company was formerly known as Coeur d'Alene Mines Corporation and changed its name to Coeur Mining, Inc. in May 2013. Coeur Mining, Inc. was founded in 1928 and is based in Chicago, Illinois.

FINANCIAL RATIOS  of  Coeur Mining (CDE)

Valuation Ratios
P/E Ratio 28.9
Price to Sales 2.4
Price to Book 2.1
Price to Tangible Book
Price to Cash Flow 12.6
Price to Free Cash Flow 63.5
Growth Rates
Sales Growth Rate 3.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 6.3%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio 14
Current Ratio 0.5
LT Debt to Equity 25.9%
Total Debt to Equity 27.5%
Interest Coverage 1
Management Effectiveness
Return On Assets 178.4%
Ret/ On Assets - 3 Yr. Avg. 33.6%
Return On Total Capital 5.8%
Ret/ On T. Cap. - 3 Yr. Avg. -36.5%
Return On Equity 9.3%
Return On Equity - 3 Yr. Avg. -56.6%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 38.4%
Gross Margin - 3 Yr. Avg. 29.7%
EBITDA Margin 24.9%
EBITDA Margin - 3 Yr. Avg. -76.9%
Operating Margin 7.1%
Oper. Margin - 3 Yr. Avg. -97.5%
Pre-Tax Margin 0.2%
Pre-Tax Margin - 3 Yr. Avg. -104.9%
Net Profit Margin 8.3%
Net Profit Margin - 3 Yr. Avg. -78.4%
Effective Tax Rate -5400%
Eff/ Tax Rate - 3 Yr. Avg. -1789%
Payout Ratio 0%

CDE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CDE stock intrinsic value calculation we used $666 million for the last fiscal year's total revenue generated by Coeur Mining. The default revenue input number comes from 2016 income statement of Coeur Mining. 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 CDE stock valuation model: a) initial revenue growth rate of 39.2% 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 CDE is calculated based on our internal credit rating of Coeur Mining, 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 Coeur Mining.
    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 CDE stock the variable cost ratio is equal to 152.4%.

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 CDE 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 12% for Coeur Mining.

Corporate tax rate of 27% is the nominal tax rate for Coeur Mining. 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 CDE 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 CDE are equal to 117.1%.

Life of production assets of 10 years is the average useful life of capital assets used in Coeur Mining 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 CDE is equal to 21.6%. 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 - $768 million for Coeur Mining - 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 183.411 million for Coeur Mining 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 Coeur Mining at the current share price and the inputted number of shares is $1.6 billion.

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Stock chart of CDE Financial statements of CDE Annual reports of CDE
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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