Intrinsic value of Intelsat - I

Previous Close

$3.05

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

  Value-price divergence*

-7%

Previous close

$3.05

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

 
Value-price divergence*

-7%

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

We calculate the intrinsic value of I 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 0.3

 

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, %
  -7.01
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  2,188
  2,232
  2,283
  2,342
  2,408
  2,481
  2,561
  2,648
  2,742
  2,844
  2,953
  3,070
  3,195
  3,327
  3,468
  3,618
  3,776
  3,944
  4,122
  4,309
  4,507
  4,716
  4,936
  5,169
  5,413
  5,671
  5,942
  6,228
  6,529
  6,845
  7,177
Variable operating expenses, $m
 
  5,092
  5,203
  5,330
  5,473
  5,631
  5,804
  5,993
  6,197
  6,417
  6,653
  6,644
  6,914
  7,201
  7,506
  7,830
  8,173
  8,536
  8,920
  9,326
  9,754
  10,207
  10,683
  11,186
  11,716
  12,273
  12,861
  13,479
  14,129
  14,813
  15,533
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
  237
  5,092
  5,203
  5,330
  5,473
  5,631
  5,804
  5,993
  6,197
  6,417
  6,653
  6,644
  6,914
  7,201
  7,506
  7,830
  8,173
  8,536
  8,920
  9,326
  9,754
  10,207
  10,683
  11,186
  11,716
  12,273
  12,861
  13,479
  14,129
  14,813
  15,533
Operating income, $m
  1,951
  -2,860
  -2,920
  -2,988
  -3,065
  -3,150
  -3,243
  -3,345
  -3,455
  -3,573
  -3,700
  -3,574
  -3,719
  -3,874
  -4,038
  -4,212
  -4,396
  -4,592
  -4,798
  -5,017
  -5,247
  -5,491
  -5,747
  -6,017
  -6,302
  -6,602
  -6,918
  -7,251
  -7,601
  -7,969
  -8,356
EBITDA, $m
  2,646
  -2,051
  -2,098
  -2,152
  -2,213
  -2,280
  -2,354
  -2,434
  -2,521
  -2,614
  -2,714
  -2,822
  -2,936
  -3,058
  -3,188
  -3,325
  -3,471
  -3,625
  -3,788
  -3,961
  -4,143
  -4,335
  -4,537
  -4,751
  -4,976
  -5,212
  -5,462
  -5,724
  -6,000
  -6,291
  -6,597
Interest expense (income), $m
  870
  852
  570
  587
  606
  627
  650
  676
  703
  734
  766
  801
  838
  878
  920
  965
  1,013
  1,064
  1,118
  1,174
  1,234
  1,297
  1,364
  1,435
  1,509
  1,587
  1,669
  1,756
  1,847
  1,943
  2,044
Earnings before tax, $m
  1,010
  -3,712
  -3,491
  -3,575
  -3,671
  -3,777
  -3,893
  -4,020
  -4,158
  -4,307
  -4,466
  -4,375
  -4,557
  -4,752
  -4,958
  -5,177
  -5,410
  -5,656
  -5,916
  -6,191
  -6,481
  -6,788
  -7,111
  -7,452
  -7,811
  -8,189
  -8,588
  -9,007
  -9,448
  -9,912
  -10,400
Tax expense, $m
  16
  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
  990
  -3,712
  -3,491
  -3,575
  -3,671
  -3,777
  -3,893
  -4,020
  -4,158
  -4,307
  -4,466
  -4,375
  -4,557
  -4,752
  -4,958
  -5,177
  -5,410
  -5,656
  -5,916
  -6,191
  -6,481
  -6,788
  -7,111
  -7,452
  -7,811
  -8,189
  -8,588
  -9,007
  -9,448
  -9,912
  -10,400

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  666
  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
  12,942
  13,206
  13,509
  13,857
  14,246
  14,678
  15,152
  15,668
  16,227
  16,829
  17,474
  18,165
  18,903
  19,688
  20,522
  21,407
  22,345
  23,338
  24,388
  25,498
  26,670
  27,906
  29,209
  30,584
  32,032
  33,556
  35,162
  36,852
  38,630
  40,501
  42,469
Adjusted assets (=assets-cash), $m
  12,276
  13,206
  13,509
  13,857
  14,246
  14,678
  15,152
  15,668
  16,227
  16,829
  17,474
  18,165
  18,903
  19,688
  20,522
  21,407
  22,345
  23,338
  24,388
  25,498
  26,670
  27,906
  29,209
  30,584
  32,032
  33,556
  35,162
  36,852
  38,630
  40,501
  42,469
Revenue / Adjusted assets
  0.178
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
Average production assets, $m
  8,956
  9,135
  9,345
  9,585
  9,854
  10,153
  10,481
  10,838
  11,224
  11,641
  12,087
  12,565
  13,075
  13,618
  14,195
  14,808
  15,457
  16,143
  16,870
  17,637
  18,448
  19,303
  20,205
  21,155
  22,157
  23,212
  24,322
  25,491
  26,721
  28,015
  29,376
Working capital, $m
  191
  -223
  -228
  -234
  -241
  -248
  -256
  -265
  -274
  -284
  -295
  -307
  -319
  -333
  -347
  -362
  -378
  -394
  -412
  -431
  -451
  -472
  -494
  -517
  -541
  -567
  -594
  -623
  -653
  -684
  -718
Total debt, $m
  14,198
  9,507
  9,780
  10,093
  10,444
  10,832
  11,259
  11,723
  12,226
  12,768
  13,349
  13,971
  14,634
  15,341
  16,092
  16,888
  17,733
  18,626
  19,572
  20,570
  21,625
  22,737
  23,911
  25,147
  26,450
  27,823
  29,268
  30,789
  32,389
  34,073
  35,844
Total liabilities, $m
  16,576
  11,885
  12,158
  12,471
  12,822
  13,210
  13,637
  14,101
  14,604
  15,146
  15,727
  16,349
  17,012
  17,719
  18,470
  19,266
  20,111
  21,004
  21,950
  22,948
  24,003
  25,115
  26,289
  27,525
  28,828
  30,201
  31,646
  33,167
  34,767
  36,451
  38,222
Total equity, $m
  -3,634
  1,321
  1,351
  1,386
  1,425
  1,468
  1,515
  1,567
  1,623
  1,683
  1,747
  1,817
  1,890
  1,969
  2,052
  2,141
  2,235
  2,334
  2,439
  2,550
  2,667
  2,791
  2,921
  3,058
  3,203
  3,356
  3,516
  3,685
  3,863
  4,050
  4,247
Total liabilities and equity, $m
  12,942
  13,206
  13,509
  13,857
  14,247
  14,678
  15,152
  15,668
  16,227
  16,829
  17,474
  18,166
  18,902
  19,688
  20,522
  21,407
  22,346
  23,338
  24,389
  25,498
  26,670
  27,906
  29,210
  30,583
  32,031
  33,557
  35,162
  36,852
  38,630
  40,501
  42,469
Debt-to-equity ratio
  -3.907
  7.200
  7.240
  7.280
  7.330
  7.380
  7.430
  7.480
  7.530
  7.590
  7.640
  7.690
  7.740
  7.790
  7.840
  7.890
  7.940
  7.980
  8.020
  8.070
  8.110
  8.150
  8.190
  8.220
  8.260
  8.290
  8.320
  8.350
  8.380
  8.410
  8.440
Adjusted equity ratio
  -0.350
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  990
  -3,712
  -3,491
  -3,575
  -3,671
  -3,777
  -3,893
  -4,020
  -4,158
  -4,307
  -4,466
  -4,375
  -4,557
  -4,752
  -4,958
  -5,177
  -5,410
  -5,656
  -5,916
  -6,191
  -6,481
  -6,788
  -7,111
  -7,452
  -7,811
  -8,189
  -8,588
  -9,007
  -9,448
  -9,912
  -10,400
Depreciation, amort., depletion, $m
  695
  809
  822
  836
  852
  870
  890
  911
  934
  959
  986
  752
  783
  815
  850
  887
  926
  967
  1,010
  1,056
  1,105
  1,156
  1,210
  1,267
  1,327
  1,390
  1,456
  1,526
  1,600
  1,678
  1,759
Funds from operations, $m
  645
  -2,903
  -2,669
  -2,739
  -2,818
  -2,907
  -3,004
  -3,109
  -3,224
  -3,348
  -3,480
  -3,623
  -3,774
  -3,936
  -4,108
  -4,291
  -4,484
  -4,689
  -4,906
  -5,135
  -5,377
  -5,632
  -5,901
  -6,185
  -6,484
  -6,799
  -7,131
  -7,480
  -7,848
  -8,234
  -8,641
Change in working capital, $m
  -39
  -4
  -5
  -6
  -7
  -7
  -8
  -9
  -9
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -29
  -30
  -32
  -33
Cash from operations, $m
  684
  -2,899
  -2,664
  -2,733
  -2,812
  -2,899
  -2,996
  -3,101
  -3,214
  -3,337
  -3,469
  -3,611
  -3,762
  -3,923
  -4,094
  -4,276
  -4,468
  -4,672
  -4,888
  -5,116
  -5,357
  -5,611
  -5,879
  -6,162
  -6,460
  -6,774
  -7,104
  -7,452
  -7,818
  -8,203
  -8,608
Maintenance CAPEX, $m
  0
  -536
  -547
  -560
  -574
  -590
  -608
  -628
  -649
  -672
  -697
  -724
  -752
  -783
  -815
  -850
  -887
  -926
  -967
  -1,010
  -1,056
  -1,105
  -1,156
  -1,210
  -1,267
  -1,327
  -1,390
  -1,456
  -1,526
  -1,600
  -1,678
New CAPEX, $m
  -715
  -179
  -210
  -240
  -270
  -299
  -328
  -357
  -386
  -416
  -447
  -478
  -510
  -543
  -577
  -612
  -649
  -687
  -726
  -768
  -810
  -855
  -902
  -951
  -1,002
  -1,055
  -1,111
  -1,169
  -1,230
  -1,294
  -1,361
Cash from investing activities, $m
  -731
  -715
  -757
  -800
  -844
  -889
  -936
  -985
  -1,035
  -1,088
  -1,144
  -1,202
  -1,262
  -1,326
  -1,392
  -1,462
  -1,536
  -1,613
  -1,693
  -1,778
  -1,866
  -1,960
  -2,058
  -2,161
  -2,269
  -2,382
  -2,501
  -2,625
  -2,756
  -2,894
  -3,039
Free cash flow, $m
  -47
  -3,614
  -3,421
  -3,533
  -3,655
  -3,788
  -3,931
  -4,085
  -4,250
  -4,426
  -4,613
  -4,813
  -5,024
  -5,249
  -5,487
  -5,738
  -6,004
  -6,285
  -6,581
  -6,894
  -7,224
  -7,571
  -7,937
  -8,322
  -8,728
  -9,155
  -9,604
  -10,077
  -10,574
  -11,097
  -11,647
Issuance/(repayment) of debt, $m
  628
  -4,691
  273
  312
  351
  389
  427
  464
  503
  542
  581
  622
  664
  706
  751
  797
  844
  894
  945
  999
  1,054
  1,113
  1,173
  1,237
  1,303
  1,372
  1,445
  1,521
  1,600
  1,684
  1,771
Issuance/(repurchase) of shares, $m
  0
  8,667
  3,521
  3,610
  3,710
  3,820
  3,941
  4,072
  4,214
  4,367
  4,531
  4,444
  4,631
  4,830
  5,042
  5,266
  5,504
  5,755
  6,021
  6,302
  6,599
  6,912
  7,242
  7,589
  7,956
  8,342
  8,748
  9,176
  9,626
  10,099
  10,597
Cash from financing (excl. dividends), $m  
  547
  3,976
  3,794
  3,922
  4,061
  4,209
  4,368
  4,536
  4,717
  4,909
  5,112
  5,066
  5,295
  5,536
  5,793
  6,063
  6,348
  6,649
  6,966
  7,301
  7,653
  8,025
  8,415
  8,826
  9,259
  9,714
  10,193
  10,697
  11,226
  11,783
  12,368
Total cash flow (excl. dividends), $m
  499
  362
  373
  389
  405
  420
  436
  451
  467
  483
  499
  253
  270
  288
  306
  325
  344
  364
  385
  407
  430
  453
  478
  504
  531
  559
  589
  620
  652
  686
  721
Retained Cash Flow (-), $m
  -1,016
  -8,667
  -3,521
  -3,610
  -3,710
  -3,820
  -3,941
  -4,072
  -4,214
  -4,367
  -4,531
  -4,444
  -4,631
  -4,830
  -5,042
  -5,266
  -5,504
  -5,755
  -6,021
  -6,302
  -6,599
  -6,912
  -7,242
  -7,589
  -7,956
  -8,342
  -8,748
  -9,176
  -9,626
  -10,099
  -10,597
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
 
  -8,305
  -3,147
  -3,221
  -3,305
  -3,399
  -3,505
  -3,621
  -3,747
  -3,884
  -4,032
  -4,191
  -4,361
  -4,542
  -4,736
  -4,941
  -5,160
  -5,391
  -5,636
  -5,895
  -6,169
  -6,458
  -6,764
  -7,086
  -7,425
  -7,783
  -8,160
  -8,556
  -8,974
  -9,413
  -9,876
Discount rate, %
 
  15.30
  16.07
  16.87
  17.71
  18.60
  19.53
  20.50
  21.53
  22.61
  23.74
  24.92
  26.17
  27.48
  28.85
  30.29
  31.81
  33.40
  35.07
  36.82
  38.66
  40.60
  42.63
  44.76
  46.99
  49.34
  51.81
  54.40
  57.12
  59.98
  62.98
PV of cash for distribution, $m
 
  -7,203
  -2,336
  -2,018
  -1,721
  -1,449
  -1,202
  -981
  -788
  -620
  -479
  -362
  -268
  -194
  -136
  -93
  -62
  -40
  -25
  -15
  -9
  -5
  -3
  -1
  -1
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  13.6
  3.7
  1.0
  0.3
  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
  0.0
  0.0
  0.0

Intelsat S.A., through its subsidiaries, provides satellite communications services worldwide. It offers a range of communications services to media companies, fixed and wireless telecommunications operators, data networking service providers for enterprise and mobile applications in the air and on the seas, multinational corporations, and ISPs; and commercial satellite communication services to the U.S. government and other military organizations and their contractors. The company offers various on-network services, including transponder services; managed services that combine satellite capacity, teleport facilities, satellite communications hardware, and other ground facilities to provide managed and monitored broadband, trunking, video, and private network services to customers; and channel services primarily used for point-to-point bilateral services to telecommunications providers. It also provides off-network and other services comprising transponder, mobile satellite, satellite-related, and other services. In addition, Intelsat S.A. offers satellite-related consulting and technical services that include the lifecycle of satellite operations and related infrastructure, from satellite and launch vehicle procurement through telemetry and commanding services, and related equipment sale services to other satellite operators. The company was founded in 1964 and is headquartered in Luxembourg. Intelsat S.A. is a subsidiary of Serafina S.A.

FINANCIAL RATIOS  of  Intelsat (I)

Valuation Ratios
P/E Ratio 0.4
Price to Sales 0.2
Price to Book -0.1
Price to Tangible Book
Price to Cash Flow 0.5
Price to Free Cash Flow -11.6
Growth Rates
Sales Growth Rate -7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -1.2%
Cap. Spend. - 3 Yr. Gr. Rate 3.5%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity -390.7%
Total Debt to Equity -390.7%
Interest Coverage 2
Management Effectiveness
Return On Assets 14.7%
Ret/ On Assets - 3 Yr. Avg. 0.1%
Return On Total Capital 9.6%
Ret/ On T. Cap. - 3 Yr. Avg. -7.2%
Return On Equity -23.9%
Return On Equity - 3 Yr. Avg. 31.4%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 84.4%
Gross Margin - 3 Yr. Avg. 85.5%
EBITDA Margin 117.7%
EBITDA Margin - 3 Yr. Avg. 31.9%
Operating Margin 89.2%
Oper. Margin - 3 Yr. Avg. 3.2%
Pre-Tax Margin 46.2%
Pre-Tax Margin - 3 Yr. Avg. -36.6%
Net Profit Margin 45.2%
Net Profit Margin - 3 Yr. Avg. -37.4%
Effective Tax Rate 1.6%
Eff/ Tax Rate - 3 Yr. Avg. 3.4%
Payout Ratio 0.5%

I stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the I stock intrinsic value calculation we used $2188 million for the last fiscal year's total revenue generated by Intelsat. The default revenue input number comes from 2016 income statement of Intelsat. 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 I stock valuation model: a) initial revenue growth rate of 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 15.3%, whose default value for I is calculated based on our internal credit rating of Intelsat, 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 Intelsat.
    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 I stock the variable cost ratio is equal to 228.4%.

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 I 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% for Intelsat.

Corporate tax rate of 27% is the nominal tax rate for Intelsat. 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 I 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 I are equal to 409.3%.

Life of production assets of 16.7 years is the average useful life of capital assets used in Intelsat 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 I is equal to -10%. 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 - $-3634 million for Intelsat - 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 91.315 million for Intelsat 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 Intelsat at the current share price and the inputted number of shares is $0.3 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ SpaceX marks third successful rocket launch in two weeks   [Jul-05-17 11:44PM  MarketWatch]
▶ Intelsat 35e Launches Successfully   [09:20PM  Business Wire]
▶ SpaceX Launches Satellite for Intelsat   [08:12PM  Bloomberg Video]
▶ [$$] SpaceX Scraps Launch for Second Time in Two Days   [12:12AM  The Wall Street Journal]
▶ [$$] SpaceX Scraps Launch Again   [Jul-04-17 02:36AM  The Wall Street Journal]
▶ Intelsat 35e Preparing for Take-Off   [Jun-30-17 03:29PM  Business Wire]
▶ Intelsat SA Value Analysis (NYSE:I) : June 29, 2017   [Jun-29-17 03:40PM  Capital Cube]
▶ [$$] Biswas's Take: Intelsat Refinances Bonds With an Eye to a Tie-up   [Jun-23-17 04:32PM  The Wall Street Journal]
▶ Intelsat Announces Pricing of Senior Notes   [Jun-19-17 06:12PM  Business Wire]
▶ Intelsat Opens Office in Nairobi, Kenya   [Jun-07-17 01:00AM  Business Wire]
▶ [$$] Biswas's Take: OneWeb Formally Ends Its Pursuit of Intelsat   [Jun-05-17 12:38PM  The Wall Street Journal]
▶ Softbank Searches the Skies for OneWeb Partner   [Jun-04-17 07:04PM  TheStreet.com]
▶ SoftBank Billionaire Gets Zapped in Space   [Jun-02-17 09:30AM  Bloomberg]
▶ [$$] OneWeb Deal for Intelsat Collapsed Over Big Bondholder Haircut   [Jun-01-17 06:39PM  The Wall Street Journal]
▶ 3 Top Stocks Under $5   [May-20-17 09:11AM  Motley Fool]
▶ SoftBank May Quit Intelsat Deal Over Bond Standoff   [May-16-17 01:13PM  Bloomberg]
▶ [$$] Intelsat Bondholder Enthusiasm Lags for OneWeb Merger Deal   [May-11-17 03:16PM  The Wall Street Journal]
▶ ETFs with exposure to Intelsat SA : May 1, 2017   [May-01-17 03:59PM  Capital Cube]
▶ Why Intelsat Shares Crashed and Burned Friday   [Apr-28-17 04:04PM  Motley Fool]
▶ Intelsat reports 1Q loss   [Apr-27-17 07:00AM  Associated Press]
▶ Intelsat SA Value Analysis (NYSE:I) : April 19, 2017   [Apr-19-17 03:04PM  Capital Cube]
▶ Will SoftBank land its satellite internet moonshot?   [Apr-11-17 11:25AM  American City Business Journals]
▶ Star Wars at SoftBank   [Apr-06-17 10:10AM  Bloomberg]
▶ Now That MDA Is Buying DigitalGlobe, Should You Buy MDA?   [Mar-12-17 02:13PM  at Motley Fool]
▶ [$$] Intelsat Bondholders Organizing Ahead of SoftBank Deal   [Mar-06-17 04:34PM  at The Wall Street Journal]
▶ Corrections & Amplifications   [12:16AM  at The Wall Street Journal]
▶ Corrections & Amplifications for the edition of Monday, March 6, 2017   [Mar-05-17 04:40PM  at The Wall Street Journal]
▶ Why Intelsat Stock Just Plunged Another 18%   [Mar-02-17 06:41PM  at Motley Fool]
▶ Why Intelsat Stock Sank   [04:40PM  at Motley Fool]
Stock chart of I Financial statements of I Annual reports of I
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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