Intrinsic value of Concho Resources - CXO

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$116.48

  Intrinsic Value

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  Value-price divergence*

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$116.48

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

We calculate the intrinsic value of CXO 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 17.2

 

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, %
  -9.37
  35.00
  32.00
  29.30
  26.87
  24.68
  22.71
  20.94
  19.35
  17.91
  16.62
  15.46
  14.41
  13.47
  12.63
  11.86
  11.18
  10.56
  10.00
  9.50
  9.05
  8.65
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
Revenue, $m
  1,635
  2,207
  2,914
  3,767
  4,780
  5,959
  7,313
  8,844
  10,556
  12,447
  14,516
  16,760
  19,176
  21,759
  24,506
  27,413
  30,477
  33,696
  37,066
  40,588
  44,263
  48,090
  52,073
  56,216
  60,521
  64,995
  69,645
  74,477
  79,500
  84,723
  90,157
Variable operating expenses, $m
 
  1,806
  2,383
  3,082
  3,910
  4,875
  5,982
  7,235
  8,635
  10,181
  11,874
  13,709
  15,686
  17,799
  20,046
  22,424
  24,931
  27,563
  30,320
  33,201
  36,207
  39,338
  42,596
  45,984
  49,506
  53,166
  56,970
  60,922
  65,031
  69,304
  73,748
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
  3,761
  1,806
  2,383
  3,082
  3,910
  4,875
  5,982
  7,235
  8,635
  10,181
  11,874
  13,709
  15,686
  17,799
  20,046
  22,424
  24,931
  27,563
  30,320
  33,201
  36,207
  39,338
  42,596
  45,984
  49,506
  53,166
  56,970
  60,922
  65,031
  69,304
  73,748
Operating income, $m
  -2,126
  402
  530
  686
  870
  1,085
  1,331
  1,610
  1,921
  2,265
  2,642
  3,050
  3,490
  3,960
  4,460
  4,989
  5,547
  6,133
  6,746
  7,387
  8,056
  8,752
  9,477
  10,231
  11,015
  11,829
  12,675
  13,555
  14,469
  15,420
  16,409
EBITDA, $m
  -959
  1,977
  2,609
  3,374
  4,281
  5,337
  6,550
  7,921
  9,454
  11,147
  13,000
  15,010
  17,174
  19,488
  21,948
  24,552
  27,296
  30,178
  33,197
  36,352
  39,642
  43,071
  46,638
  50,348
  54,204
  58,211
  62,375
  66,703
  71,202
  75,880
  80,746
Interest expense (income), $m
  232
  208
  327
  474
  652
  863
  1,109
  1,391
  1,710
  2,067
  2,461
  2,892
  3,360
  3,864
  4,402
  4,975
  5,581
  6,219
  6,890
  7,593
  8,327
  9,093
  9,891
  10,721
  11,584
  12,482
  13,414
  14,383
  15,391
  16,438
  17,526
Earnings before tax, $m
  -2,339
  193
  204
  212
  218
  222
  222
  219
  211
  198
  181
  158
  130
  97
  58
  15
  -34
  -87
  -144
  -206
  -271
  -340
  -413
  -490
  -569
  -653
  -739
  -829
  -922
  -1,018
  -1,118
Tax expense, $m
  -877
  52
  55
  57
  59
  60
  60
  59
  57
  54
  49
  43
  35
  26
  16
  4
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -1,462
  141
  149
  155
  159
  162
  162
  160
  154
  145
  132
  115
  95
  70
  42
  11
  -34
  -87
  -144
  -206
  -271
  -340
  -413
  -490
  -569
  -653
  -739
  -829
  -922
  -1,018
  -1,118

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  53
  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
  12,119
  16,230
  21,423
  27,700
  35,143
  43,818
  53,771
  65,032
  77,615
  91,519
  106,732
  123,234
  140,997
  159,993
  180,193
  201,570
  224,099
  247,761
  272,545
  298,445
  325,462
  353,605
  382,893
  413,349
  445,007
  477,907
  512,095
  547,625
  584,560
  622,966
  662,917
Adjusted assets (=assets-cash), $m
  12,066
  16,230
  21,423
  27,700
  35,143
  43,818
  53,771
  65,032
  77,615
  91,519
  106,732
  123,234
  140,997
  159,993
  180,193
  201,570
  224,099
  247,761
  272,545
  298,445
  325,462
  353,605
  382,893
  413,349
  445,007
  477,907
  512,095
  547,625
  584,560
  622,966
  662,917
Revenue / Adjusted assets
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
Average production assets, $m
  10,967
  14,806
  19,544
  25,271
  32,061
  39,975
  49,055
  59,328
  70,808
  83,492
  97,371
  112,424
  128,630
  145,960
  164,388
  183,890
  204,442
  226,030
  248,640
  272,268
  296,915
  322,590
  349,309
  377,094
  405,975
  435,988
  467,178
  499,592
  533,287
  568,324
  604,771
Working capital, $m
  -207
  -351
  -463
  -599
  -760
  -948
  -1,163
  -1,406
  -1,678
  -1,979
  -2,308
  -2,665
  -3,049
  -3,460
  -3,896
  -4,359
  -4,846
  -5,358
  -5,894
  -6,454
  -7,038
  -7,646
  -8,280
  -8,938
  -9,623
  -10,334
  -11,074
  -11,842
  -12,641
  -13,471
  -14,335
Total debt, $m
  2,741
  4,299
  6,236
  8,577
  11,353
  14,589
  18,302
  22,502
  27,196
  32,382
  38,056
  44,211
  50,837
  57,922
  65,457
  73,430
  81,834
  90,660
  99,904
  109,565
  119,642
  130,140
  141,064
  152,424
  164,233
  176,504
  189,256
  202,509
  216,286
  230,611
  245,513
Total liabilities, $m
  4,497
  6,054
  7,991
  10,332
  13,108
  16,344
  20,057
  24,257
  28,951
  34,137
  39,811
  45,966
  52,592
  59,677
  67,212
  75,185
  83,589
  92,415
  101,659
  111,320
  121,397
  131,895
  142,819
  154,179
  165,988
  178,259
  191,011
  204,264
  218,041
  232,366
  247,268
Total equity, $m
  7,623
  10,176
  13,432
  17,368
  22,035
  27,474
  33,714
  40,775
  48,665
  57,383
  66,921
  77,267
  88,405
  100,316
  112,981
  126,384
  140,510
  155,346
  170,886
  187,125
  204,064
  221,710
  240,074
  259,170
  279,020
  299,647
  321,083
  343,361
  366,519
  390,600
  415,649
Total liabilities and equity, $m
  12,120
  16,230
  21,423
  27,700
  35,143
  43,818
  53,771
  65,032
  77,616
  91,520
  106,732
  123,233
  140,997
  159,993
  180,193
  201,569
  224,099
  247,761
  272,545
  298,445
  325,461
  353,605
  382,893
  413,349
  445,008
  477,906
  512,094
  547,625
  584,560
  622,966
  662,917
Debt-to-equity ratio
  0.360
  0.420
  0.460
  0.490
  0.520
  0.530
  0.540
  0.550
  0.560
  0.560
  0.570
  0.570
  0.580
  0.580
  0.580
  0.580
  0.580
  0.580
  0.580
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
Adjusted equity ratio
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1,462
  141
  149
  155
  159
  162
  162
  160
  154
  145
  132
  115
  95
  70
  42
  11
  -34
  -87
  -144
  -206
  -271
  -340
  -413
  -490
  -569
  -653
  -739
  -829
  -922
  -1,018
  -1,118
Depreciation, amort., depletion, $m
  1,167
  1,575
  2,079
  2,688
  3,411
  4,253
  5,219
  6,312
  7,533
  8,882
  10,359
  11,960
  13,684
  15,528
  17,488
  19,563
  21,749
  24,046
  26,451
  28,965
  31,587
  34,318
  37,160
  40,116
  43,189
  46,382
  49,700
  53,148
  56,733
  60,460
  64,337
Funds from operations, $m
  1,324
  1,716
  2,228
  2,843
  3,570
  4,414
  5,381
  6,471
  7,687
  9,027
  10,491
  12,075
  13,779
  15,598
  17,530
  19,573
  21,715
  23,959
  26,307
  28,759
  31,316
  33,978
  36,747
  39,627
  42,619
  45,729
  48,961
  52,319
  55,811
  59,442
  63,219
Change in working capital, $m
  -60
  -91
  -112
  -136
  -161
  -188
  -215
  -244
  -272
  -301
  -329
  -357
  -384
  -411
  -437
  -462
  -487
  -512
  -536
  -560
  -584
  -609
  -633
  -659
  -685
  -711
  -739
  -768
  -799
  -830
  -864
Cash from operations, $m
  1,384
  1,950
  2,340
  2,979
  3,731
  4,602
  5,596
  6,715
  7,959
  9,328
  10,820
  12,432
  14,163
  16,009
  17,967
  20,036
  22,203
  24,471
  26,843
  29,319
  31,900
  34,586
  37,381
  40,285
  43,304
  46,441
  49,700
  53,088
  56,610
  60,272
  64,083
Maintenance CAPEX, $m
  0
  -1,167
  -1,575
  -2,079
  -2,688
  -3,411
  -4,253
  -5,219
  -6,312
  -7,533
  -8,882
  -10,359
  -11,960
  -13,684
  -15,528
  -17,488
  -19,563
  -21,749
  -24,046
  -26,451
  -28,965
  -31,587
  -34,318
  -37,160
  -40,116
  -43,189
  -46,382
  -49,700
  -53,148
  -56,733
  -60,460
New CAPEX, $m
  -2,458
  -3,839
  -4,738
  -5,726
  -6,790
  -7,914
  -9,080
  -10,274
  -11,479
  -12,684
  -13,879
  -15,054
  -16,205
  -17,330
  -18,428
  -19,501
  -20,553
  -21,587
  -22,610
  -23,628
  -24,647
  -25,675
  -26,719
  -27,785
  -28,881
  -30,014
  -31,189
  -32,414
  -33,695
  -35,037
  -36,447
Cash from investing activities, $m
  -2,225
  -5,006
  -6,313
  -7,805
  -9,478
  -11,325
  -13,333
  -15,493
  -17,791
  -20,217
  -22,761
  -25,413
  -28,165
  -31,014
  -33,956
  -36,989
  -40,116
  -43,336
  -46,656
  -50,079
  -53,612
  -57,262
  -61,037
  -64,945
  -68,997
  -73,203
  -77,571
  -82,114
  -86,843
  -91,770
  -96,907
Free cash flow, $m
  -841
  -3,056
  -3,973
  -4,827
  -5,748
  -6,722
  -7,737
  -8,777
  -9,832
  -10,890
  -11,941
  -12,980
  -14,002
  -15,005
  -15,989
  -16,954
  -17,913
  -18,866
  -19,813
  -20,760
  -21,712
  -22,676
  -23,656
  -24,660
  -25,694
  -26,762
  -27,871
  -29,026
  -30,233
  -31,497
  -32,824
Issuance/(repayment) of debt, $m
  -600
  1,558
  1,937
  2,341
  2,776
  3,236
  3,713
  4,200
  4,693
  5,186
  5,674
  6,155
  6,626
  7,086
  7,535
  7,973
  8,403
  8,826
  9,244
  9,661
  10,077
  10,498
  10,924
  11,360
  11,808
  12,271
  12,752
  13,253
  13,777
  14,325
  14,902
Issuance/(repurchase) of shares, $m
  1,316
  4,051
  5,292
  6,421
  7,638
  8,926
  10,265
  11,638
  13,028
  14,421
  15,805
  17,172
  18,514
  19,830
  21,119
  22,384
  23,635
  24,876
  26,108
  27,338
  28,574
  29,824
  31,095
  32,396
  33,735
  35,118
  36,555
  38,051
  39,615
  41,252
  42,971
Cash from financing (excl. dividends), $m  
  665
  5,609
  7,229
  8,762
  10,414
  12,162
  13,978
  15,838
  17,721
  19,607
  21,479
  23,327
  25,140
  26,916
  28,654
  30,357
  32,038
  33,702
  35,352
  36,999
  38,651
  40,322
  42,019
  43,756
  45,543
  47,389
  49,307
  51,304
  53,392
  55,577
  57,873
Total cash flow (excl. dividends), $m
  -175
  -1,498
  -2,036
  -2,486
  -2,972
  -3,487
  -4,024
  -4,577
  -5,139
  -5,703
  -6,267
  -6,825
  -7,377
  -7,920
  -8,454
  -8,981
  -9,510
  -10,040
  -10,569
  -11,099
  -11,635
  -12,178
  -12,732
  -13,300
  -13,885
  -14,490
  -15,119
  -15,773
  -16,457
  -17,172
  -17,922
Retained Cash Flow (-), $m
  -680
  -2,606
  -3,256
  -3,936
  -4,667
  -5,439
  -6,241
  -7,061
  -7,890
  -8,718
  -9,539
  -10,346
  -11,138
  -11,911
  -12,665
  -13,403
  -14,126
  -14,837
  -15,540
  -16,239
  -16,940
  -17,646
  -18,363
  -19,096
  -19,850
  -20,628
  -21,436
  -22,278
  -23,158
  -24,080
  -25,049
Prev. year cash balance distribution, $m
 
  53
  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
 
  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
Discount rate, %
 
  4.60
  4.83
  5.07
  5.33
  5.59
  5.87
  6.16
  6.47
  6.80
  7.14
  7.49
  7.87
  8.26
  8.67
  9.11
  9.56
  10.04
  10.54
  11.07
  11.62
  12.21
  12.82
  13.46
  14.13
  14.84
  15.58
  16.36
  17.17
  18.03
  18.93
PV of cash for 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
Current shareholders' claim on cash, %
  100
  80.8
  65.7
  54.2
  45.3
  38.4
  33.0
  28.6
  25.0
  22.1
  19.7
  17.7
  16.0
  14.5
  13.3
  12.2
  11.3
  10.5
  9.7
  9.1
  8.5
  8.0
  7.5
  7.1
  6.7
  6.4
  6.0
  5.7
  5.5
  5.2
  5.0

Concho Resources Inc., an independent oil and natural gas company, engages in the acquisition, development, exploration, and production of oil and natural gas properties in the United States. The company’s principal operating areas are located in the Permian Basin of southeast New Mexico and west Texas. As of December 31, 2016, its total estimated proved reserves were 720.0 million barrels of oil equivalent. Concho Resources Inc. was founded in 2006 and is headquartered in Midland, Texas.

FINANCIAL RATIOS  of  Concho Resources (CXO)

Valuation Ratios
P/E Ratio -11.6
Price to Sales 10.4
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow 12.3
Price to Free Cash Flow -15.8
Growth Rates
Sales Growth Rate -9.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -2.1%
Cap. Spend. - 3 Yr. Gr. Rate 5.5%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 36%
Total Debt to Equity 36%
Interest Coverage -9
Management Effectiveness
Return On Assets -10.6%
Ret/ On Assets - 3 Yr. Avg. -0.9%
Return On Total Capital -14.2%
Ret/ On T. Cap. - 3 Yr. Avg. -2.3%
Return On Equity -20.1%
Return On Equity - 3 Yr. Avg. -2.4%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 72.4%
Gross Margin - 3 Yr. Avg. 74%
EBITDA Margin -57.5%
EBITDA Margin - 3 Yr. Avg. 34.8%
Operating Margin -130%
Oper. Margin - 3 Yr. Avg. -23.7%
Pre-Tax Margin -143.1%
Pre-Tax Margin - 3 Yr. Avg. -35.2%
Net Profit Margin -89.4%
Net Profit Margin - 3 Yr. Avg. -21.8%
Effective Tax Rate 37.5%
Eff/ Tax Rate - 3 Yr. Avg. 35.5%
Payout Ratio 0%

CXO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CXO stock intrinsic value calculation we used $1635 million for the last fiscal year's total revenue generated by Concho Resources. The default revenue input number comes from 2016 income statement of Concho Resources. 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 CXO stock valuation model: a) initial revenue growth rate of 35% 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 4.6%, whose default value for CXO is calculated based on our internal credit rating of Concho Resources, 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 Concho Resources.
    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 CXO stock the variable cost ratio is equal to 81.8%.

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 CXO 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 7.6% for Concho Resources.

Corporate tax rate of 27% is the nominal tax rate for Concho Resources. 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 CXO 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 CXO are equal to 670.8%.

Life of production assets of 9.4 years is the average useful life of capital assets used in Concho Resources 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 CXO is equal to -15.9%. 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 - $7623 million for Concho Resources - 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 147.476 million for Concho Resources 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 Concho Resources at the current share price and the inputted number of shares is $17.2 billion.


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Stock chart of CXO Financial statements of CXO Annual reports of CXO
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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