Intrinsic value of Intelsat - I

Previous Close

$4.64

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

  Value-price divergence*

-128%

Previous close

$4.64

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

 
Value-price divergence*

-128%

*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 0.5

 

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
  534
  550
  568
  588
  610
  634
  661
  689
  720
  753
  789
  826
  867
  909
  955
  1,003
  1,054
  1,108
  1,165
  1,225
  1,288
  1,355
  1,425
  1,500
  1,578
  1,660
  1,747
  1,838
  1,934
Earnings before tax, $m
  1,010
  -3,712
  -3,454
  -3,538
  -3,633
  -3,738
  -3,853
  -3,979
  -4,115
  -4,262
  -4,420
  -4,327
  -4,508
  -4,700
  -4,904
  -5,121
  -5,351
  -5,595
  -5,852
  -6,124
  -6,412
  -6,715
  -7,035
  -7,372
  -7,728
  -8,102
  -8,496
  -8,911
  -9,347
  -9,807
  -10,290
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
  -3,454
  -3,538
  -3,633
  -3,738
  -3,853
  -3,979
  -4,115
  -4,262
  -4,420
  -4,327
  -4,508
  -4,700
  -4,904
  -5,121
  -5,351
  -5,595
  -5,852
  -6,124
  -6,412
  -6,715
  -7,035
  -7,372
  -7,728
  -8,102
  -8,496
  -8,911
  -9,347
  -9,807
  -10,290

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
  12,538
  12,826
  13,156
  13,526
  13,936
  14,386
  14,876
  15,406
  15,978
  16,591
  17,247
  17,947
  18,692
  19,484
  20,325
  21,215
  22,158
  23,155
  24,209
  25,321
  26,495
  27,733
  29,037
  30,412
  31,860
  33,384
  34,989
  36,677
  38,453
  40,322
Adjusted assets (=assets-cash), $m
  12,276
  12,538
  12,826
  13,156
  13,526
  13,936
  14,386
  14,876
  15,406
  15,978
  16,591
  17,247
  17,947
  18,692
  19,484
  20,325
  21,215
  22,158
  23,155
  24,209
  25,321
  26,495
  27,733
  29,037
  30,412
  31,860
  33,384
  34,989
  36,677
  38,453
  40,322
Revenue / Adjusted assets
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
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
  -484
  -495
  -508
  -522
  -538
  -556
  -575
  -595
  -617
  -641
  -666
  -693
  -722
  -753
  -785
  -819
  -856
  -894
  -935
  -978
  -1,023
  -1,071
  -1,122
  -1,175
  -1,231
  -1,289
  -1,351
  -1,417
  -1,485
  -1,557
Total debt, $m
  14,198
  8,906
  9,166
  9,462
  9,795
  10,165
  10,569
  11,010
  11,488
  12,002
  12,554
  13,144
  13,774
  14,445
  15,158
  15,914
  16,716
  17,564
  18,462
  19,410
  20,411
  21,467
  22,581
  23,756
  24,993
  26,296
  27,668
  29,112
  30,631
  32,230
  33,911
Total liabilities, $m
  16,576
  11,284
  11,544
  11,840
  12,173
  12,543
  12,947
  13,388
  13,866
  14,380
  14,932
  15,522
  16,152
  16,823
  17,536
  18,292
  19,094
  19,942
  20,840
  21,788
  22,789
  23,845
  24,959
  26,134
  27,371
  28,674
  30,046
  31,490
  33,009
  34,608
  36,289
Total equity, $m
  -3,634
  1,254
  1,283
  1,316
  1,353
  1,394
  1,439
  1,488
  1,541
  1,598
  1,659
  1,725
  1,795
  1,869
  1,948
  2,032
  2,122
  2,216
  2,316
  2,421
  2,532
  2,649
  2,773
  2,904
  3,041
  3,186
  3,338
  3,499
  3,668
  3,845
  4,032
Total liabilities and equity, $m
  12,942
  12,538
  12,827
  13,156
  13,526
  13,937
  14,386
  14,876
  15,407
  15,978
  16,591
  17,247
  17,947
  18,692
  19,484
  20,324
  21,216
  22,158
  23,156
  24,209
  25,321
  26,494
  27,732
  29,038
  30,412
  31,860
  33,384
  34,989
  36,677
  38,453
  40,321
Debt-to-equity ratio
  -3.907
  7.100
  7.150
  7.190
  7.240
  7.290
  7.350
  7.400
  7.460
  7.510
  7.570
  7.620
  7.670
  7.730
  7.780
  7.830
  7.880
  7.930
  7.970
  8.020
  8.060
  8.100
  8.140
  8.180
  8.220
  8.250
  8.290
  8.320
  8.350
  8.380
  8.410
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
  -3,454
  -3,538
  -3,633
  -3,738
  -3,853
  -3,979
  -4,115
  -4,262
  -4,420
  -4,327
  -4,508
  -4,700
  -4,904
  -5,121
  -5,351
  -5,595
  -5,852
  -6,124
  -6,412
  -6,715
  -7,035
  -7,372
  -7,728
  -8,102
  -8,496
  -8,911
  -9,347
  -9,807
  -10,290
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
  -2,633
  -2,702
  -2,781
  -2,868
  -2,963
  -3,068
  -3,181
  -3,303
  -3,434
  -3,575
  -3,725
  -3,885
  -4,054
  -4,235
  -4,426
  -4,628
  -4,842
  -5,068
  -5,307
  -5,559
  -5,825
  -6,105
  -6,401
  -6,712
  -7,040
  -7,384
  -7,747
  -8,129
  -8,531
Change in working capital, $m
  -39
  -9
  -11
  -13
  -14
  -16
  -17
  -19
  -20
  -22
  -24
  -25
  -27
  -29
  -31
  -32
  -34
  -36
  -39
  -41
  -43
  -45
  -48
  -50
  -53
  -56
  -59
  -62
  -65
  -69
  -72
Cash from operations, $m
  684
  -2,894
  -2,622
  -2,690
  -2,766
  -2,852
  -2,946
  -3,049
  -3,161
  -3,281
  -3,411
  -3,550
  -3,698
  -3,856
  -4,024
  -4,202
  -4,391
  -4,592
  -4,804
  -5,028
  -5,264
  -5,514
  -5,777
  -6,055
  -6,348
  -6,656
  -6,981
  -7,322
  -7,682
  -8,060
  -8,458
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
  -3,609
  -3,379
  -3,489
  -3,610
  -3,741
  -3,882
  -4,034
  -4,196
  -4,370
  -4,555
  -4,751
  -4,960
  -5,182
  -5,416
  -5,665
  -5,927
  -6,204
  -6,497
  -6,805
  -7,131
  -7,474
  -7,835
  -8,215
  -8,616
  -9,038
  -9,481
  -9,948
  -10,438
  -10,955
  -11,497
Issuance/(repayment) of debt, $m
  628
  -5,292
  260
  297
  333
  369
  405
  441
  477
  514
  552
  590
  630
  671
  713
  756
  802
  849
  897
  948
  1,001
  1,056
  1,114
  1,174
  1,237
  1,303
  1,372
  1,444
  1,520
  1,599
  1,681
Issuance/(repurchase) of shares, $m
  0
  9,266
  3,483
  3,571
  3,670
  3,779
  3,898
  4,028
  4,168
  4,320
  4,482
  4,393
  4,578
  4,775
  4,984
  5,205
  5,440
  5,689
  5,952
  6,230
  6,523
  6,833
  7,159
  7,503
  7,865
  8,247
  8,648
  9,071
  9,516
  9,984
  10,476
Cash from financing (excl. dividends), $m  
  547
  3,974
  3,743
  3,868
  4,003
  4,148
  4,303
  4,469
  4,645
  4,834
  5,034
  4,983
  5,208
  5,446
  5,697
  5,961
  6,242
  6,538
  6,849
  7,178
  7,524
  7,889
  8,273
  8,677
  9,102
  9,550
  10,020
  10,515
  11,036
  11,583
  12,157
Total cash flow (excl. dividends), $m
  499
  366
  364
  379
  393
  407
  421
  435
  450
  464
  479
  232
  248
  264
  280
  297
  315
  333
  353
  373
  393
  415
  438
  461
  486
  512
  539
  568
  597
  628
  661
Retained Cash Flow (-), $m
  -1,016
  -9,266
  -3,483
  -3,571
  -3,670
  -3,779
  -3,898
  -4,028
  -4,168
  -4,320
  -4,482
  -4,393
  -4,578
  -4,775
  -4,984
  -5,205
  -5,440
  -5,689
  -5,952
  -6,230
  -6,523
  -6,833
  -7,159
  -7,503
  -7,865
  -8,247
  -8,648
  -9,071
  -9,516
  -9,984
  -10,476
Prev. year cash balance distribution, $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
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
 
  -8,234
  -3,119
  -3,193
  -3,277
  -3,372
  -3,477
  -3,593
  -3,719
  -3,855
  -4,003
  -4,161
  -4,330
  -4,511
  -4,703
  -4,908
  -5,125
  -5,356
  -5,599
  -5,857
  -6,130
  -6,417
  -6,721
  -7,041
  -7,379
  -7,735
  -8,109
  -8,504
  -8,919
  -9,356
  -9,816
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
 
  -7,142
  -2,315
  -2,000
  -1,707
  -1,437
  -1,192
  -974
  -782
  -616
  -476
  -360
  -266
  -192
  -135
  -93
  -62
  -40
  -25
  -15
  -9
  -5
  -3
  -1
  -1
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  13.2
  3.5
  0.9
  0.2
  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. operates in satellite services business. The Company provides satellite services to its communications customers around the world. It provides 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 Internet service providers (ISPs). The Company is also a provider of commercial satellite communication services to the United States Government and other select military organizations and their contractors. The Company focuses on business-to-business services, indirectly enable enterprise, government and consumer applications through its customers. The Company has operations in North America, Europe, Latin America and Caribbean, Africa and Middle East, and Asia Pacific.

FINANCIAL RATIOS  of  Intelsat (I)

Valuation Ratios
P/E Ratio 0.6
Price to Sales 0.3
Price to Book -0.2
Price to Tangible Book
Price to Cash Flow 0.8
Price to Free Cash Flow -17.7
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 -21.7%. 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 117.737 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 $0.5 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ Banker Upgrades Intelsat Stock, Doubles Price Target   [Sep-08-17 11:39AM  Motley Fool]
▶ ETFs with exposure to Intelsat SA : September 6, 2017   [Sep-05-17 08:57PM  Capital Cube]
▶ Intelsat 37e Preparing for Launch   [Aug-30-17 08:00AM  Business Wire]
▶ 3 Tech Stocks Under $10 to Buy Now   [Aug-07-17 01:33PM  Zacks]
▶ 5 of the Best Stocks Under $10 for 2017   [Aug-03-17 01:55PM  Zacks]
▶ Intelsat reports 2Q loss   [Jul-27-17 10:31PM  Associated Press]
▶ 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]
Financial statements 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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