Intrinsic value of Patterson-UTI Energy - PTEN

Previous Close

$15.63

  Intrinsic Value

$3.42

stock screener

  Rating & Target

str. sell

-78%

  Value-price divergence*

-88%

Previous close

$15.63

 
Intrinsic value

$3.42

 
Up/down potential

-78%

 
Rating

str. sell

 
Value-price divergence*

-88%

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

We calculate the intrinsic value of PTEN 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 2.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -51.56
  13.40
  12.56
  11.80
  11.12
  10.51
  9.96
  9.46
  9.02
  8.62
  8.25
  7.93
  7.64
  7.37
  7.14
  6.92
  6.73
  6.56
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
  5.40
Revenue, $m
  916
  1,039
  1,169
  1,307
  1,453
  1,605
  1,765
  1,932
  2,107
  2,288
  2,477
  2,673
  2,877
  3,090
  3,310
  3,539
  3,777
  4,025
  4,283
  4,551
  4,830
  5,121
  5,424
  5,740
  6,070
  6,414
  6,773
  7,148
  7,541
  7,951
  8,380
Variable operating expenses, $m
 
  987
  1,111
  1,242
  1,380
  1,525
  1,677
  1,836
  2,001
  2,174
  2,353
  2,540
  2,734
  2,935
  3,144
  3,362
  3,588
  3,824
  4,068
  4,323
  4,588
  4,865
  5,153
  5,453
  5,766
  6,093
  6,434
  6,791
  7,164
  7,553
  7,961
Fixed operating expenses, $m
 
  528
  541
  555
  568
  583
  597
  612
  627
  643
  659
  676
  693
  710
  728
  746
  765
  784
  803
  823
  844
  865
  887
  909
  931
  955
  979
  1,003
  1,028
  1,054
  1,080
Total operating expenses, $m
  1,372
  1,515
  1,652
  1,797
  1,948
  2,108
  2,274
  2,448
  2,628
  2,817
  3,012
  3,216
  3,427
  3,645
  3,872
  4,108
  4,353
  4,608
  4,871
  5,146
  5,432
  5,730
  6,040
  6,362
  6,697
  7,048
  7,413
  7,794
  8,192
  8,607
  9,041
Operating income, $m
  -456
  -476
  -483
  -489
  -496
  -502
  -509
  -516
  -522
  -529
  -535
  -542
  -549
  -555
  -562
  -569
  -576
  -582
  -589
  -596
  -602
  -609
  -615
  -622
  -628
  -634
  -640
  -646
  -651
  -656
  -661
EBITDA, $m
  212
  -55
  -9
  41
  93
  148
  206
  268
  332
  399
  468
  541
  617
  697
  779
  865
  955
  1,049
  1,147
  1,249
  1,355
  1,466
  1,583
  1,705
  1,832
  1,965
  2,105
  2,252
  2,405
  2,566
  2,735
Interest expense (income), $m
  37
  30
  41
  52
  64
  76
  89
  103
  117
  132
  147
  163
  180
  197
  215
  234
  253
  274
  295
  317
  339
  363
  388
  413
  440
  468
  498
  528
  560
  593
  628
Earnings before tax, $m
  -496
  -506
  -524
  -541
  -560
  -579
  -598
  -618
  -639
  -660
  -683
  -705
  -729
  -753
  -777
  -803
  -829
  -856
  -884
  -912
  -942
  -972
  -1,003
  -1,035
  -1,068
  -1,102
  -1,138
  -1,174
  -1,211
  -1,250
  -1,289
Tax expense, $m
  -177
  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
  -319
  -506
  -524
  -541
  -560
  -579
  -598
  -618
  -639
  -660
  -683
  -705
  -729
  -753
  -777
  -803
  -829
  -856
  -884
  -912
  -942
  -972
  -1,003
  -1,035
  -1,068
  -1,102
  -1,138
  -1,174
  -1,211
  -1,250
  -1,289

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  35
  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
  3,772
  4,240
  4,772
  5,336
  5,929
  6,552
  7,205
  7,887
  8,598
  9,339
  10,110
  10,911
  11,745
  12,610
  13,510
  14,445
  15,417
  16,428
  17,480
  18,574
  19,714
  20,901
  22,138
  23,428
  24,774
  26,178
  27,645
  29,177
  30,779
  32,453
  34,204
Adjusted assets (=assets-cash), $m
  3,737
  4,240
  4,772
  5,336
  5,929
  6,552
  7,205
  7,887
  8,598
  9,339
  10,110
  10,911
  11,745
  12,610
  13,510
  14,445
  15,417
  16,428
  17,480
  18,574
  19,714
  20,901
  22,138
  23,428
  24,774
  26,178
  27,645
  29,177
  30,779
  32,453
  34,204
Revenue / Adjusted assets
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
Average production assets, $m
  3,713
  4,210
  4,739
  5,298
  5,888
  6,506
  7,154
  7,832
  8,538
  9,273
  10,039
  10,835
  11,662
  12,522
  13,415
  14,344
  15,309
  16,313
  17,357
  18,444
  19,575
  20,754
  21,982
  23,263
  24,600
  25,995
  27,451
  28,973
  30,563
  32,225
  33,964
Working capital, $m
  -18
  -60
  -68
  -76
  -84
  -93
  -102
  -112
  -122
  -133
  -144
  -155
  -167
  -179
  -192
  -205
  -219
  -233
  -248
  -264
  -280
  -297
  -315
  -333
  -352
  -372
  -393
  -415
  -437
  -461
  -486
Total debt, $m
  598
  805
  1,022
  1,252
  1,494
  1,748
  2,015
  2,293
  2,583
  2,885
  3,200
  3,527
  3,867
  4,220
  4,587
  4,969
  5,365
  5,778
  6,207
  6,653
  7,118
  7,602
  8,107
  8,634
  9,183
  9,756
  10,354
  10,979
  11,633
  12,316
  13,030
Total liabilities, $m
  1,524
  1,730
  1,947
  2,177
  2,419
  2,673
  2,940
  3,218
  3,508
  3,810
  4,125
  4,452
  4,792
  5,145
  5,512
  5,894
  6,290
  6,703
  7,132
  7,578
  8,043
  8,527
  9,032
  9,559
  10,108
  10,681
  11,279
  11,904
  12,558
  13,241
  13,955
Total equity, $m
  2,249
  2,510
  2,825
  3,159
  3,510
  3,879
  4,265
  4,669
  5,090
  5,529
  5,985
  6,459
  6,953
  7,465
  7,998
  8,552
  9,127
  9,725
  10,348
  10,996
  11,670
  12,373
  13,106
  13,869
  14,666
  15,497
  16,366
  17,273
  18,221
  19,212
  20,249
Total liabilities and equity, $m
  3,773
  4,240
  4,772
  5,336
  5,929
  6,552
  7,205
  7,887
  8,598
  9,339
  10,110
  10,911
  11,745
  12,610
  13,510
  14,446
  15,417
  16,428
  17,480
  18,574
  19,713
  20,900
  22,138
  23,428
  24,774
  26,178
  27,645
  29,177
  30,779
  32,453
  34,204
Debt-to-equity ratio
  0.266
  0.320
  0.360
  0.400
  0.430
  0.450
  0.470
  0.490
  0.510
  0.520
  0.530
  0.550
  0.560
  0.570
  0.570
  0.580
  0.590
  0.590
  0.600
  0.610
  0.610
  0.610
  0.620
  0.620
  0.630
  0.630
  0.630
  0.640
  0.640
  0.640
  0.640
Adjusted equity ratio
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -319
  -506
  -524
  -541
  -560
  -579
  -598
  -618
  -639
  -660
  -683
  -705
  -729
  -753
  -777
  -803
  -829
  -856
  -884
  -912
  -942
  -972
  -1,003
  -1,035
  -1,068
  -1,102
  -1,138
  -1,174
  -1,211
  -1,250
  -1,289
Depreciation, amort., depletion, $m
  668
  421
  474
  530
  589
  651
  715
  783
  854
  927
  1,004
  1,083
  1,166
  1,252
  1,342
  1,434
  1,531
  1,631
  1,736
  1,844
  1,958
  2,075
  2,198
  2,326
  2,460
  2,599
  2,745
  2,897
  3,056
  3,223
  3,396
Funds from operations, $m
  401
  -85
  -50
  -12
  29
  72
  117
  165
  215
  267
  321
  378
  438
  500
  564
  632
  702
  775
  852
  932
  1,016
  1,103
  1,195
  1,291
  1,392
  1,497
  1,608
  1,723
  1,845
  1,973
  2,107
Change in working capital, $m
  96
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
Cash from operations, $m
  305
  -78
  -42
  -4
  38
  81
  127
  175
  225
  277
  332
  390
  449
  512
  577
  645
  716
  790
  867
  948
  1,032
  1,120
  1,213
  1,309
  1,411
  1,517
  1,628
  1,745
  1,868
  1,997
  2,132
Maintenance CAPEX, $m
  0
  -371
  -421
  -474
  -530
  -589
  -651
  -715
  -783
  -854
  -927
  -1,004
  -1,083
  -1,166
  -1,252
  -1,342
  -1,434
  -1,531
  -1,631
  -1,736
  -1,844
  -1,958
  -2,075
  -2,198
  -2,326
  -2,460
  -2,599
  -2,745
  -2,897
  -3,056
  -3,223
New CAPEX, $m
  -120
  -498
  -529
  -559
  -589
  -619
  -648
  -677
  -706
  -736
  -765
  -796
  -827
  -860
  -893
  -929
  -965
  -1,004
  -1,044
  -1,087
  -1,131
  -1,179
  -1,228
  -1,281
  -1,336
  -1,395
  -1,456
  -1,522
  -1,590
  -1,662
  -1,739
Cash from investing activities, $m
  -98
  -869
  -950
  -1,033
  -1,119
  -1,208
  -1,299
  -1,392
  -1,489
  -1,590
  -1,692
  -1,800
  -1,910
  -2,026
  -2,145
  -2,271
  -2,399
  -2,535
  -2,675
  -2,823
  -2,975
  -3,137
  -3,303
  -3,479
  -3,662
  -3,855
  -4,055
  -4,267
  -4,487
  -4,718
  -4,962
Free cash flow, $m
  207
  -947
  -992
  -1,037
  -1,082
  -1,127
  -1,172
  -1,218
  -1,265
  -1,312
  -1,361
  -1,410
  -1,461
  -1,514
  -1,569
  -1,625
  -1,684
  -1,745
  -1,809
  -1,875
  -1,944
  -2,016
  -2,091
  -2,170
  -2,252
  -2,338
  -2,428
  -2,521
  -2,619
  -2,722
  -2,829
Issuance/(repayment) of debt, $m
  -255
  207
  217
  230
  242
  254
  266
  278
  290
  302
  315
  327
  340
  353
  367
  382
  397
  412
  429
  447
  465
  484
  505
  526
  549
  573
  598
  625
  653
  683
  714
Issuance/(repurchase) of shares, $m
  -3
  802
  839
  875
  911
  948
  984
  1,022
  1,060
  1,099
  1,139
  1,180
  1,222
  1,265
  1,310
  1,356
  1,405
  1,454
  1,506
  1,560
  1,616
  1,675
  1,736
  1,799
  1,865
  1,934
  2,006
  2,081
  2,159
  2,241
  2,326
Cash from financing (excl. dividends), $m  
  -261
  1,009
  1,056
  1,105
  1,153
  1,202
  1,250
  1,300
  1,350
  1,401
  1,454
  1,507
  1,562
  1,618
  1,677
  1,738
  1,802
  1,866
  1,935
  2,007
  2,081
  2,159
  2,241
  2,325
  2,414
  2,507
  2,604
  2,706
  2,812
  2,924
  3,040
Total cash flow (excl. dividends), $m
  -54
  62
  64
  68
  72
  75
  79
  82
  86
  89
  93
  97
  100
  104
  108
  113
  117
  122
  127
  132
  137
  143
  149
  155
  162
  169
  177
  185
  193
  202
  211
Retained Cash Flow (-), $m
  312
  -802
  -839
  -875
  -911
  -948
  -984
  -1,022
  -1,060
  -1,099
  -1,139
  -1,180
  -1,222
  -1,265
  -1,310
  -1,356
  -1,405
  -1,454
  -1,506
  -1,560
  -1,616
  -1,675
  -1,736
  -1,799
  -1,865
  -1,934
  -2,006
  -2,081
  -2,159
  -2,241
  -2,326
Prev. year cash balance distribution, $m
 
  35
  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
 
  -705
  -775
  -807
  -840
  -872
  -906
  -940
  -974
  -1,010
  -1,046
  -1,083
  -1,121
  -1,161
  -1,202
  -1,244
  -1,287
  -1,333
  -1,380
  -1,428
  -1,479
  -1,532
  -1,586
  -1,643
  -1,703
  -1,765
  -1,829
  -1,896
  -1,966
  -2,039
  -2,115
Discount rate, %
 
  5.00
  5.25
  5.51
  5.79
  6.08
  6.38
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.13
  16.93
  17.78
  18.67
  19.60
  20.58
PV of cash for distribution, $m
 
  -672
  -699
  -687
  -670
  -650
  -625
  -597
  -566
  -532
  -496
  -458
  -419
  -380
  -340
  -302
  -265
  -229
  -196
  -165
  -137
  -112
  -90
  -71
  -55
  -42
  -31
  -23
  -16
  -11
  -8
Current shareholders' claim on cash, %
  100
  75.9
  58.8
  46.2
  36.9
  29.9
  24.4
  20.2
  16.9
  14.2
  12.0
  10.3
  8.8
  7.6
  6.6
  5.7
  5.0
  4.4
  3.9
  3.4
  3.0
  2.7
  2.4
  2.1
  1.9
  1.7
  1.5
  1.4
  1.3
  1.1
  1.0

Patterson-UTI Energy, Inc., through its subsidiaries, provides onshore contract drilling services to major and independent oil and natural gas operators in the United States and Canada. The company’s Contract Drilling segment markets its contract drilling services primarily in Texas, southeastern New Mexico, northern Louisiana, Colorado, Wyoming, North Dakota, Oklahoma, Pennsylvania, Ohio, West Virginia, and western Canada. As of December 31, 2016, this segment had a drilling fleet of 202 marketable land-based drilling rigs. Its Pressure Pumping segment offers pressure pumping services that consist of well stimulation and cementing for the completion of new wells and remedial work on existing wells, as well as hydraulic and nitrogen fracturing, cementing, and acid pumping services in Texas and the Appalachian region. Patterson-UTI Energy, Inc. also manufactures and sells pipe handling components and related technology to drilling contractors in North America and other markets; and owns and invests in oil and natural gas assets as a non-operating working interest owner located principally in Texas and New Mexico. Patterson-UTI Energy, Inc. was founded in 1978 and is headquartered in Houston, Texas.

FINANCIAL RATIOS  of  Patterson-UTI Energy (PTEN)

Valuation Ratios
P/E Ratio -7.3
Price to Sales 2.5
Price to Book 1
Price to Tangible Book
Price to Cash Flow 7.6
Price to Free Cash Flow 12.5
Growth Rates
Sales Growth Rate -51.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -83.9%
Cap. Spend. - 3 Yr. Gr. Rate -28.9%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 26.6%
Total Debt to Equity 26.6%
Interest Coverage -12
Management Effectiveness
Return On Assets -7.1%
Ret/ On Assets - 3 Yr. Avg. -3%
Return On Total Capital -10.2%
Ret/ On T. Cap. - 3 Yr. Avg. -4.6%
Return On Equity -13.3%
Return On Equity - 3 Yr. Avg. -6.1%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 29.1%
Gross Margin - 3 Yr. Avg. 32.5%
EBITDA Margin 22.8%
EBITDA Margin - 3 Yr. Avg. 26.1%
Operating Margin -49.8%
Oper. Margin - 3 Yr. Avg. -20.8%
Pre-Tax Margin -54.1%
Pre-Tax Margin - 3 Yr. Avg. -23.2%
Net Profit Margin -34.8%
Net Profit Margin - 3 Yr. Avg. -15.1%
Effective Tax Rate 35.7%
Eff/ Tax Rate - 3 Yr. Avg. 35%
Payout Ratio -7.5%

PTEN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PTEN stock intrinsic value calculation we used $916 million for the last fiscal year's total revenue generated by Patterson-UTI Energy. The default revenue input number comes from 2016 income statement of Patterson-UTI Energy. 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 PTEN stock valuation model: a) initial revenue growth rate of 13.4% 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 5%, whose default value for PTEN is calculated based on our internal credit rating of Patterson-UTI Energy, 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 Patterson-UTI Energy.
    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 PTEN stock the variable cost ratio is equal to 95%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $515 million in the base year in the intrinsic value calculation for PTEN 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 5.1% for Patterson-UTI Energy.

Corporate tax rate of 27% is the nominal tax rate for Patterson-UTI Energy. 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 PTEN 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 PTEN are equal to 405.3%.

Life of production assets of 10 years is the average useful life of capital assets used in Patterson-UTI Energy 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 PTEN is equal to -5.8%. 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 - $2249 million for Patterson-UTI Energy - 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 164.553 million for Patterson-UTI Energy 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 Patterson-UTI Energy at the current share price and the inputted number of shares is $2.6 billion.

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COMPANY NEWS

▶ Correlation between Weatherford and Crude Oil on August 4   [Aug-08-17 08:09AM  Market Realist]
▶ Patterson-UTI Reports Drilling Activity for July 2017   [Aug-04-17 06:00AM  PR Newswire]
▶ What Wall Street Projects for PTEN after 2Q17 Earnings   [Aug-02-17 06:06PM  Market Realist]
▶ Whats the Outlook for PTEN, BHGE, and BAS?   [04:18PM  Market Realist]
▶ Patterson-UTI reports 2Q loss   [Jul-27-17 03:44PM  Associated Press]
▶ Whats Schlumbergers Correlation with Crude Oil after 2Q17?   [Jul-25-17 09:12AM  Market Realist]
▶ Heres What Drove Patterson-UTI Energys 1Q17   [Jul-18-17 05:35PM  Market Realist]
▶ What PTENs Analysts Expect for 2Q17   [02:24PM  Market Realist]
▶ How National Oilwell Varco Correlates with Crude Oil   [Jul-17-17 07:36AM  Market Realist]
▶ Patterson-UTI Reports Drilling Activity for June 2017   [Jul-06-17 06:00AM  PR Newswire]
▶ Last Weeks Key Energy Industry Updates   [Jul-03-17 03:17PM  Market Realist]
▶ The Best Oilfield Services Stocks of 2Q17 by Earnings Growth   [Jun-27-17 03:05PM  Market Realist]
▶ What Analysts Are Recommending for Nabors Industries   [Jun-23-17 07:36AM  Market Realist]
▶ How Schlumberger Relates to Crude Oil as of June 16   [Jun-20-17 10:37AM  Market Realist]
▶ Energy Company Updates between June 5June 9, 2017   [Jun-13-17 09:09AM  Market Realist]
▶ What Was Weatherfords Short Interest on June 7?   [Jun-12-17 07:36AM  Market Realist]
▶ Whats Patterson-UTI Energys Valuation Compared to Peers?   [Jun-07-17 02:35PM  Market Realist]
▶ What Patterson-UTI Energys Valuation Tells Us   [01:05PM  Market Realist]
▶ What Were Patterson-UTI Energys Drivers in 1Q17?   [Jun-06-17 02:35PM  Market Realist]
▶ Why Patterson-UTI Energy Stock Is So Bearish   [11:30AM  Market Realist]
▶ Patterson-UTI Reports Drilling Activity for May 2017   [Jun-05-17 06:00AM  PR Newswire]
▶ Are Super Rigs The Driver Behind The New Shale Boom?   [Jun-04-17 05:00PM  Oilprice.com]
▶ What Wall Street Projects for Nabors after 1Q17 Earnings   [May-02-17 09:10AM  Market Realist]
▶ Wall Street Analysts Forecasts for Patterson-UTI Energy   [Apr-28-17 03:05PM  Market Realist]
▶ Earnings and Oil Torpedoed Oil Service Stocks Today   [Apr-27-17 04:10PM  Motley Fool]
▶ Patterson-UTI reports 1Q loss   [08:01AM  Associated Press]
▶ Here's Why Natural Gas Prices Soared Today   [Apr-26-17 06:41PM  Zacks]
▶ Houston real estate, energy, pharma cos. close more than $2B in deals   [Apr-24-17 09:35AM  American City Business Journals]
▶ Shorting Patterson-UTI Energy: Short Interest as of April 12   [Apr-14-17 10:36AM  Market Realist]
▶ PTENs 1Q17 Earnings: Analyst Expectations   [Apr-13-17 03:35PM  Market Realist]
▶ Patterson-UTI Reports Drilling Activity for March 2017   [Apr-05-17 06:00AM  PR Newswire]
▶ Short Interest: OFS Stocks with the Lowest Returns in 1Q17   [Apr-03-17 11:35AM  Market Realist]
▶ Baker Hughes Reports U.S. Rig Count Climbs by 15   [Mar-31-17 01:20PM  TheStreet.com]
Stock chart of PTEN Financial statements of PTEN
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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