Intrinsic value of CGG ADR - CGG

Previous Close

$3.80

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$3.80

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of CGG 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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, %
  -43.05
  21.20
  19.58
  18.12
  16.81
  15.63
  14.57
  13.61
  12.75
  11.97
  11.28
  10.65
  10.08
  9.58
  9.12
  8.71
  8.34
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.60
  6.44
  6.29
  6.16
  6.05
  5.94
  5.85
  5.76
Revenue, $m
  1,197
  1,451
  1,735
  2,049
  2,394
  2,768
  3,171
  3,602
  4,062
  4,548
  5,061
  5,600
  6,165
  6,755
  7,371
  8,012
  8,680
  9,375
  10,097
  10,847
  11,627
  12,437
  13,280
  14,155
  15,066
  16,014
  17,001
  18,029
  19,101
  20,218
  21,383
Variable operating expenses, $m
 
  2,224
  2,636
  3,091
  3,590
  4,132
  4,716
  5,342
  6,007
  6,712
  7,455
  8,113
  8,931
  9,787
  10,679
  11,609
  12,576
  13,582
  14,629
  15,716
  16,845
  18,019
  19,240
  20,509
  21,829
  23,202
  24,632
  26,122
  27,674
  29,292
  30,980
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
  1,593
  2,224
  2,636
  3,091
  3,590
  4,132
  4,716
  5,342
  6,007
  6,712
  7,455
  8,113
  8,931
  9,787
  10,679
  11,609
  12,576
  13,582
  14,629
  15,716
  16,845
  18,019
  19,240
  20,509
  21,829
  23,202
  24,632
  26,122
  27,674
  29,292
  30,980
Operating income, $m
  -397
  -773
  -901
  -1,042
  -1,197
  -1,365
  -1,546
  -1,739
  -1,945
  -2,164
  -2,394
  -2,513
  -2,767
  -3,032
  -3,308
  -3,596
  -3,896
  -4,208
  -4,532
  -4,869
  -5,218
  -5,582
  -5,960
  -6,353
  -6,762
  -7,188
  -7,631
  -8,092
  -8,573
  -9,074
  -9,597
EBITDA, $m
  -104
  -429
  -513
  -606
  -708
  -819
  -938
  -1,066
  -1,202
  -1,346
  -1,497
  -1,657
  -1,824
  -1,998
  -2,181
  -2,370
  -2,568
  -2,774
  -2,987
  -3,209
  -3,440
  -3,680
  -3,929
  -4,188
  -4,457
  -4,738
  -5,030
  -5,334
  -5,651
  -5,982
  -6,326
Interest expense (income), $m
  142
  123
  155
  190
  230
  273
  320
  371
  425
  483
  544
  608
  676
  747
  821
  899
  980
  1,064
  1,151
  1,242
  1,336
  1,434
  1,536
  1,642
  1,752
  1,866
  1,986
  2,110
  2,239
  2,374
  2,514
Earnings before tax, $m
  -582
  -896
  -1,056
  -1,232
  -1,426
  -1,638
  -1,866
  -2,110
  -2,370
  -2,646
  -2,938
  -3,122
  -3,443
  -3,779
  -4,130
  -4,495
  -4,875
  -5,271
  -5,683
  -6,110
  -6,554
  -7,016
  -7,496
  -7,995
  -8,514
  -9,054
  -9,616
  -10,202
  -10,812
  -11,448
  -12,111
Tax expense, $m
  -14
  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
  -573
  -896
  -1,056
  -1,232
  -1,426
  -1,638
  -1,866
  -2,110
  -2,370
  -2,646
  -2,938
  -3,122
  -3,443
  -3,779
  -4,130
  -4,495
  -4,875
  -5,271
  -5,683
  -6,110
  -6,554
  -7,016
  -7,496
  -7,995
  -8,514
  -9,054
  -9,616
  -10,202
  -10,812
  -11,448
  -12,111

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  539
  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
  4,862
  5,237
  6,263
  7,398
  8,641
  9,992
  11,447
  13,005
  14,663
  16,419
  18,270
  20,216
  22,255
  24,385
  26,609
  28,925
  31,337
  33,844
  36,451
  39,159
  41,974
  44,900
  47,941
  51,103
  54,391
  57,814
  61,377
  65,088
  68,956
  72,988
  77,195
Adjusted assets (=assets-cash), $m
  4,323
  5,237
  6,263
  7,398
  8,641
  9,992
  11,447
  13,005
  14,663
  16,419
  18,270
  20,216
  22,255
  24,385
  26,609
  28,925
  31,337
  33,844
  36,451
  39,159
  41,974
  44,900
  47,941
  51,103
  54,391
  57,814
  61,377
  65,088
  68,956
  72,988
  77,195
Revenue / Adjusted assets
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
  0.277
Average production assets, $m
  2,033
  2,463
  2,946
  3,480
  4,064
  4,700
  5,384
  6,117
  6,897
  7,723
  8,593
  9,509
  10,467
  11,470
  12,515
  13,605
  14,739
  15,918
  17,144
  18,419
  19,743
  21,118
  22,549
  24,036
  25,583
  27,193
  28,868
  30,614
  32,433
  34,330
  36,308
Working capital, $m
  -1,910
  364
  435
  514
  601
  695
  796
  904
  1,019
  1,142
  1,270
  1,406
  1,547
  1,695
  1,850
  2,011
  2,179
  2,353
  2,534
  2,723
  2,918
  3,122
  3,333
  3,553
  3,782
  4,020
  4,267
  4,525
  4,794
  5,075
  5,367
Total debt, $m
  3,149
  3,289
  4,049
  4,890
  5,811
  6,812
  7,891
  9,045
  10,274
  11,574
  12,946
  14,388
  15,899
  17,478
  19,125
  20,842
  22,628
  24,486
  26,418
  28,425
  30,511
  32,679
  34,932
  37,275
  39,712
  42,248
  44,888
  47,638
  50,504
  53,492
  56,609
Total liabilities, $m
  3,741
  3,881
  4,641
  5,482
  6,403
  7,404
  8,483
  9,637
  10,866
  12,166
  13,538
  14,980
  16,491
  18,070
  19,717
  21,434
  23,220
  25,078
  27,010
  29,017
  31,103
  33,271
  35,524
  37,867
  40,304
  42,840
  45,480
  48,230
  51,096
  54,084
  57,201
Total equity, $m
  1,121
  1,356
  1,622
  1,916
  2,238
  2,588
  2,965
  3,368
  3,798
  4,253
  4,732
  5,236
  5,764
  6,316
  6,892
  7,492
  8,116
  8,766
  9,441
  10,142
  10,871
  11,629
  12,417
  13,236
  14,087
  14,974
  15,897
  16,858
  17,860
  18,904
  19,993
Total liabilities and equity, $m
  4,862
  5,237
  6,263
  7,398
  8,641
  9,992
  11,448
  13,005
  14,664
  16,419
  18,270
  20,216
  22,255
  24,386
  26,609
  28,926
  31,336
  33,844
  36,451
  39,159
  41,974
  44,900
  47,941
  51,103
  54,391
  57,814
  61,377
  65,088
  68,956
  72,988
  77,194
Debt-to-equity ratio
  2.809
  2.420
  2.500
  2.550
  2.600
  2.630
  2.660
  2.690
  2.710
  2.720
  2.740
  2.750
  2.760
  2.770
  2.780
  2.780
  2.790
  2.790
  2.800
  2.800
  2.810
  2.810
  2.810
  2.820
  2.820
  2.820
  2.820
  2.830
  2.830
  2.830
  2.830
Adjusted equity ratio
  0.135
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259
  0.259

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -573
  -896
  -1,056
  -1,232
  -1,426
  -1,638
  -1,866
  -2,110
  -2,370
  -2,646
  -2,938
  -3,122
  -3,443
  -3,779
  -4,130
  -4,495
  -4,875
  -5,271
  -5,683
  -6,110
  -6,554
  -7,016
  -7,496
  -7,995
  -8,514
  -9,054
  -9,616
  -10,202
  -10,812
  -11,448
  -12,111
Depreciation, amort., depletion, $m
  293
  344
  388
  436
  488
  546
  607
  673
  744
  818
  896
  857
  943
  1,033
  1,128
  1,226
  1,328
  1,434
  1,545
  1,659
  1,779
  1,903
  2,031
  2,165
  2,305
  2,450
  2,601
  2,758
  2,922
  3,093
  3,271
Funds from operations, $m
  553
  -552
  -668
  -797
  -938
  -1,092
  -1,258
  -1,437
  -1,627
  -1,828
  -2,041
  -2,265
  -2,500
  -2,746
  -3,002
  -3,269
  -3,548
  -3,837
  -4,138
  -4,451
  -4,776
  -5,114
  -5,465
  -5,830
  -6,209
  -6,604
  -7,016
  -7,444
  -7,890
  -8,355
  -8,840
Change in working capital, $m
  198
  64
  71
  79
  86
  94
  101
  108
  115
  122
  129
  135
  142
  148
  155
  161
  168
  174
  181
  188
  196
  203
  211
  220
  229
  238
  248
  258
  269
  280
  292
Cash from operations, $m
  355
  -616
  -739
  -875
  -1,024
  -1,186
  -1,359
  -1,545
  -1,742
  -1,950
  -2,170
  -2,400
  -2,642
  -2,894
  -3,157
  -3,430
  -3,715
  -4,011
  -4,319
  -4,639
  -4,972
  -5,317
  -5,676
  -6,050
  -6,438
  -6,842
  -7,263
  -7,702
  -8,159
  -8,636
  -9,133
Maintenance CAPEX, $m
  0
  -183
  -222
  -265
  -313
  -366
  -423
  -485
  -551
  -621
  -696
  -774
  -857
  -943
  -1,033
  -1,128
  -1,226
  -1,328
  -1,434
  -1,545
  -1,659
  -1,779
  -1,903
  -2,031
  -2,165
  -2,305
  -2,450
  -2,601
  -2,758
  -2,922
  -3,093
New CAPEX, $m
  -105
  -430
  -482
  -534
  -585
  -635
  -685
  -733
  -780
  -826
  -871
  -915
  -959
  -1,002
  -1,046
  -1,090
  -1,134
  -1,179
  -1,226
  -1,274
  -1,324
  -1,376
  -1,430
  -1,487
  -1,547
  -1,610
  -1,676
  -1,746
  -1,819
  -1,897
  -1,978
Cash from investing activities, $m
  -381
  -613
  -704
  -799
  -898
  -1,001
  -1,108
  -1,218
  -1,331
  -1,447
  -1,567
  -1,689
  -1,816
  -1,945
  -2,079
  -2,218
  -2,360
  -2,507
  -2,660
  -2,819
  -2,983
  -3,155
  -3,333
  -3,518
  -3,712
  -3,915
  -4,126
  -4,347
  -4,577
  -4,819
  -5,071
Free cash flow, $m
  -26
  -1,229
  -1,443
  -1,675
  -1,923
  -2,187
  -2,467
  -2,763
  -3,073
  -3,398
  -3,737
  -4,090
  -4,457
  -4,839
  -5,236
  -5,648
  -6,075
  -6,519
  -6,979
  -7,458
  -7,955
  -8,472
  -9,009
  -9,568
  -10,150
  -10,757
  -11,389
  -12,048
  -12,736
  -13,454
  -14,204
Issuance/(repayment) of debt, $m
  -37
  679
  760
  841
  921
  1,001
  1,078
  1,154
  1,229
  1,301
  1,372
  1,442
  1,511
  1,579
  1,648
  1,717
  1,787
  1,858
  1,931
  2,007
  2,086
  2,168
  2,253
  2,343
  2,437
  2,536
  2,640
  2,750
  2,866
  2,988
  3,117
Issuance/(repurchase) of shares, $m
  368
  1,132
  1,321
  1,526
  1,749
  1,987
  2,243
  2,514
  2,800
  3,101
  3,417
  3,626
  3,971
  4,331
  4,705
  5,095
  5,500
  5,921
  6,358
  6,812
  7,284
  7,774
  8,284
  8,814
  9,366
  9,941
  10,539
  11,163
  11,814
  12,492
  13,201
Cash from financing (excl. dividends), $m  
  176
  1,811
  2,081
  2,367
  2,670
  2,988
  3,321
  3,668
  4,029
  4,402
  4,789
  5,068
  5,482
  5,910
  6,353
  6,812
  7,287
  7,779
  8,289
  8,819
  9,370
  9,942
  10,537
  11,157
  11,803
  12,477
  13,179
  13,913
  14,680
  15,480
  16,318
Total cash flow (excl. dividends), $m
  154
  581
  638
  693
  747
  801
  854
  905
  955
  1,005
  1,053
  978
  1,024
  1,071
  1,117
  1,164
  1,212
  1,260
  1,310
  1,361
  1,415
  1,470
  1,528
  1,589
  1,653
  1,720
  1,790
  1,865
  1,943
  2,026
  2,114
Retained Cash Flow (-), $m
  191
  -1,132
  -1,321
  -1,526
  -1,749
  -1,987
  -2,243
  -2,514
  -2,800
  -3,101
  -3,417
  -3,626
  -3,971
  -4,331
  -4,705
  -5,095
  -5,500
  -5,921
  -6,358
  -6,812
  -7,284
  -7,774
  -8,284
  -8,814
  -9,366
  -9,941
  -10,539
  -11,163
  -11,814
  -12,492
  -13,201
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
 
  -550
  -684
  -834
  -1,001
  -1,187
  -1,389
  -1,608
  -1,844
  -2,097
  -2,365
  -2,648
  -2,947
  -3,260
  -3,588
  -3,931
  -4,288
  -4,661
  -5,048
  -5,451
  -5,869
  -6,304
  -6,756
  -7,225
  -7,713
  -8,221
  -8,749
  -9,298
  -9,870
  -10,466
  -11,087
Discount rate, %
 
  10.40
  10.92
  11.47
  12.04
  12.64
  13.27
  13.94
  14.63
  15.37
  16.13
  16.94
  17.79
  18.68
  19.61
  20.59
  21.62
  22.70
  23.84
  25.03
  26.28
  27.59
  28.97
  30.42
  31.94
  33.54
  35.22
  36.98
  38.83
  40.77
  42.81
PV of cash for distribution, $m
 
  -498
  -556
  -602
  -635
  -654
  -658
  -645
  -619
  -579
  -530
  -474
  -413
  -352
  -292
  -237
  -187
  -144
  -108
  -78
  -55
  -38
  -25
  -16
  -10
  -6
  -3
  -2
  -1
  -1
  0
Current shareholders' claim on cash, %
  100
  40.9
  17.1
  7.3
  3.2
  1.4
  0.6
  0.3
  0.1
  0.1
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

CGG SA (CGG) is a manufacturer of geophysical equipment. The Company provides marine, land and airborne data acquisition services, as well as a range of other geoscience services, including data imaging, geoscience and petroleum engineering consulting services, and collecting, developing and licensing geological data. Its segments include Contractual Data Acquisition; Geology, Geophysics & Reservoir (GGR); Equipment, and Non-Operated Resources. The Contractual Data Acquisition includes marine, and land and multi-physics. Its GGR segment includes the Multi-client business line and the Subsurface Imaging and Reservoir business lines (processing and imaging of geophysical data, reservoir characterization, geophysical consulting and software services, geological data library and data management solutions). The Equipment segment consists of its manufacturing and sales activities for seismic equipment. It operates through Saturno, a multi-client survey over Santos Basin Offshore Brazil.

FINANCIAL RATIOS  of  CGG ADR (CGG)

Valuation Ratios
P/E Ratio -0.1
Price to Sales 0.1
Price to Book 0.1
Price to Tangible Book
Price to Cash Flow 0.2
Price to Free Cash Flow 0.3
Growth Rates
Sales Growth Rate -43.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -28.1%
Cap. Spend. - 3 Yr. Gr. Rate -21.3%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 35.6%
Total Debt to Equity 280.9%
Interest Coverage -3
Management Effectiveness
Return On Assets -8.4%
Ret/ On Assets - 3 Yr. Avg. -13.9%
Return On Total Capital -13.6%
Ret/ On T. Cap. - 3 Yr. Avg. -21%
Return On Equity -47.1%
Return On Equity - 3 Yr. Avg. -51.7%
Asset Turnover 0.2
Profitability Ratios
Gross Margin -4.5%
Gross Margin - 3 Yr. Avg. 9.3%
EBITDA Margin -12.3%
EBITDA Margin - 3 Yr. Avg. 5.7%
Operating Margin -33.1%
Oper. Margin - 3 Yr. Avg. -36.9%
Pre-Tax Margin -48.6%
Pre-Tax Margin - 3 Yr. Avg. -48.4%
Net Profit Margin -47.9%
Net Profit Margin - 3 Yr. Avg. -51.4%
Effective Tax Rate 2.4%
Eff/ Tax Rate - 3 Yr. Avg. -5.4%
Payout Ratio 0%

CGG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CGG stock intrinsic value calculation we used $1197 million for the last fiscal year's total revenue generated by CGG ADR. The default revenue input number comes from 2016 income statement of CGG ADR. 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 CGG stock valuation model: a) initial revenue growth rate of 21.2% 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 10.4%, whose default value for CGG is calculated based on our internal credit rating of CGG ADR, 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 CGG ADR.
    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 CGG stock the variable cost ratio is equal to 155.1%.

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 CGG 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 4.7% for CGG ADR.

Corporate tax rate of 27% is the nominal tax rate for CGG ADR. 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 CGG 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 CGG are equal to 169.8%.

Life of production assets of 11.1 years is the average useful life of capital assets used in CGG ADR 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 CGG is equal to 25.1%. 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 - $1121 million for CGG ADR - 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 22.668 million for CGG ADR 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 CGG ADR at the current share price and the inputted number of shares is $0.1 billion.

RELATED COMPANIES Price Int.Val. Rating
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DWSN Dawson Geophys 5.59 1.93  str.sell
SLB Schlumberger 66.50 87.18  buy

COMPANY NEWS

▶ CGG: provides full year 2017 trading update   [Jan-16-18 01:31AM  GlobeNewswire]
▶ CGG: provides full year 2017 trading update   [01:30AM  GlobeNewswire]
▶ CGG: announces the launch of CEO succession plan   [Dec-05-17 01:00AM  GlobeNewswire]
▶ CGG: announces the launch of CEO succession plan   [Dec-04-17 04:31PM  GlobeNewswire]
▶ CGG: Trading halt request for December 1, 2017 starting 2pm   [Nov-30-17 01:31AM  GlobeNewswire]
▶ CGG: Update of the voting form   [Nov-07-17 03:55PM  Marketwired]
▶ CGG: Update of the voting form   [02:32PM  GlobeNewswire]
▶ CGG: Notification of share ownership threshold crossed   [Nov-03-17 12:31PM  GlobeNewswire]
▶ CGG : Notification of share ownership threshold crossed   [Oct-27-17 01:04PM  GlobeNewswire]
▶ CGG: Starts New CWAz Survey in Gulf of Mexico   [Sep-25-17 01:31AM  GlobeNewswire]
▶ ETFs with exposure to CGG : August 29, 2017   [Aug-29-17 06:33PM  Capital Cube]
▶ ETFs with exposure to CGG : August 15, 2017   [Aug-15-17 03:40PM  Capital Cube]
▶ ETFs with exposure to CGG : June 16, 2017   [Jun-16-17 03:33PM  Capital Cube]
▶ [$$] France's CGG Group Files for Bankruptcy Protection   [Jun-14-17 06:56PM  The Wall Street Journal]
▶ CGG: Wins Extension until 2021 for Oman Dedicated Center   [May-23-17 01:31AM  GlobeNewswire]
▶ CGG reports 1Q loss   [May-12-17 05:54AM  Associated Press]
▶ CGG: Restructuring Update   [01:33AM  GlobeNewswire]
▶ ETFs with exposure to CGG : May 9, 2017   [May-09-17 04:24PM  Capital Cube]
▶ New Strong Sell Stocks for April 4th   [Apr-04-17 10:34AM  Zacks]
Financial statements of CGG
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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