Intrinsic value of Renewable Energy Group - REGI

Previous Close

$12.75

  Intrinsic Value

$815.78

stock screener

  Rating & Target

str. buy

+999%

  Value-price divergence*

-114%

Previous close

$12.75

 
Intrinsic value

$815.78

 
Up/down potential

+999%

 
Rating

str. buy

 
Value-price divergence*

-114%

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

We calculate the intrinsic value of REGI 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, %
  47.15
  40.60
  37.04
  33.84
  30.95
  28.36
  26.02
  23.92
  22.03
  20.32
  18.79
  17.41
  16.17
  15.05
  14.05
  13.14
  12.33
  11.60
  10.94
  10.34
  9.81
  9.33
  8.90
  8.51
  8.16
  7.84
  7.56
  7.30
  7.07
  6.86
  6.68
Revenue, $m
  2,041
  2,870
  3,933
  5,263
  6,892
  8,847
  11,149
  13,815
  16,859
  20,285
  24,097
  28,293
  32,869
  37,817
  43,130
  48,799
  54,815
  61,172
  67,863
  74,882
  82,227
  89,898
  97,894
  106,221
  114,883
  123,890
  133,251
  142,978
  153,087
  163,593
  174,516
Variable operating expenses, $m
 
  1,965
  2,692
  3,603
  4,717
  6,055
  7,630
  9,454
  11,537
  13,881
  16,489
  19,359
  22,489
  25,875
  29,510
  33,389
  37,506
  41,855
  46,433
  51,236
  56,261
  61,509
  66,981
  72,678
  78,605
  84,767
  91,172
  97,828
  104,745
  111,933
  119,407
Fixed operating expenses, $m
 
  622
  638
  654
  670
  687
  704
  722
  740
  758
  777
  796
  816
  837
  858
  879
  901
  924
  947
  970
  995
  1,020
  1,045
  1,071
  1,098
  1,125
  1,153
  1,182
  1,212
  1,242
  1,273
Total operating expenses, $m
  1,990
  2,587
  3,330
  4,257
  5,387
  6,742
  8,334
  10,176
  12,277
  14,639
  17,266
  20,155
  23,305
  26,712
  30,368
  34,268
  38,407
  42,779
  47,380
  52,206
  57,256
  62,529
  68,026
  73,749
  79,703
  85,892
  92,325
  99,010
  105,957
  113,175
  120,680
Operating income, $m
  52
  282
  603
  1,007
  1,505
  2,105
  2,815
  3,640
  4,583
  5,646
  6,831
  8,138
  9,563
  11,105
  12,762
  14,531
  16,409
  18,394
  20,483
  22,676
  24,971
  27,369
  29,868
  32,472
  35,180
  37,997
  40,925
  43,968
  47,131
  50,418
  53,836
EBITDA, $m
  84
  328
  664
  1,089
  1,612
  2,242
  2,987
  3,853
  4,842
  5,958
  7,201
  8,571
  10,066
  11,684
  13,422
  15,278
  17,248
  19,330
  21,522
  23,822
  26,230
  28,744
  31,367
  34,097
  36,939
  39,893
  42,964
  46,156
  49,473
  52,921
  56,507
Interest expense (income), $m
  10
  8
  15
  23
  34
  47
  62
  80
  101
  125
  153
  183
  216
  252
  291
  333
  378
  425
  475
  528
  584
  642
  702
  765
  831
  900
  971
  1,045
  1,121
  1,201
  1,284
Earnings before tax, $m
  49
  274
  588
  983
  1,471
  2,059
  2,753
  3,559
  4,481
  5,521
  6,678
  7,955
  9,347
  10,853
  12,471
  14,198
  16,031
  17,968
  20,008
  22,148
  24,388
  26,727
  29,166
  31,706
  34,349
  37,098
  39,954
  42,923
  46,009
  49,217
  52,552
Tax expense, $m
  4
  74
  159
  266
  397
  556
  743
  961
  1,210
  1,491
  1,803
  2,148
  2,524
  2,930
  3,367
  3,833
  4,328
  4,851
  5,402
  5,980
  6,585
  7,216
  7,875
  8,561
  9,274
  10,016
  10,788
  11,589
  12,422
  13,289
  14,189
Net income, $m
  44
  200
  429
  718
  1,074
  1,503
  2,010
  2,598
  3,271
  4,030
  4,875
  5,807
  6,824
  7,923
  9,104
  10,364
  11,703
  13,117
  14,606
  16,168
  17,803
  19,511
  21,291
  23,146
  25,075
  27,081
  29,167
  31,334
  33,587
  35,928
  38,363

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  116
  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
  1,137
  1,436
  1,967
  2,633
  3,448
  4,426
  5,577
  6,911
  8,434
  10,148
  12,055
  14,154
  16,443
  18,918
  21,576
  24,412
  27,421
  30,601
  33,948
  37,460
  41,134
  44,971
  48,972
  53,137
  57,470
  61,976
  66,659
  71,525
  76,582
  81,838
  87,302
Adjusted assets (=assets-cash), $m
  1,021
  1,436
  1,967
  2,633
  3,448
  4,426
  5,577
  6,911
  8,434
  10,148
  12,055
  14,154
  16,443
  18,918
  21,576
  24,412
  27,421
  30,601
  33,948
  37,460
  41,134
  44,971
  48,972
  53,137
  57,470
  61,976
  66,659
  71,525
  76,582
  81,838
  87,302
Revenue / Adjusted assets
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
  1.999
Average production assets, $m
  618
  870
  1,192
  1,595
  2,088
  2,681
  3,378
  4,186
  5,108
  6,146
  7,301
  8,573
  9,959
  11,458
  13,068
  14,786
  16,609
  18,535
  20,562
  22,689
  24,915
  27,239
  29,662
  32,185
  34,810
  37,539
  40,375
  43,322
  46,385
  49,569
  52,878
Working capital, $m
  229
  258
  354
  474
  620
  796
  1,003
  1,243
  1,517
  1,826
  2,169
  2,546
  2,958
  3,404
  3,882
  4,392
  4,933
  5,506
  6,108
  6,739
  7,400
  8,091
  8,810
  9,560
  10,340
  11,150
  11,993
  12,868
  13,778
  14,723
  15,706
Total debt, $m
  311
  428
  668
  968
  1,336
  1,777
  2,296
  2,898
  3,585
  4,358
  5,218
  6,164
  7,197
  8,313
  9,512
  10,791
  12,148
  13,582
  15,092
  16,675
  18,333
  20,063
  21,867
  23,746
  25,700
  27,732
  29,844
  32,039
  34,319
  36,690
  39,154
Total liabilities, $m
  529
  647
  887
  1,187
  1,555
  1,996
  2,515
  3,117
  3,804
  4,577
  5,437
  6,383
  7,416
  8,532
  9,731
  11,010
  12,367
  13,801
  15,311
  16,894
  18,552
  20,282
  22,086
  23,965
  25,919
  27,951
  30,063
  32,258
  34,538
  36,909
  39,373
Total equity, $m
  607
  788
  1,080
  1,445
  1,893
  2,430
  3,062
  3,794
  4,630
  5,571
  6,618
  7,770
  9,027
  10,386
  11,845
  13,402
  15,054
  16,800
  18,638
  20,565
  22,583
  24,689
  26,885
  29,172
  31,551
  34,025
  36,596
  39,267
  42,043
  44,929
  47,929
Total liabilities and equity, $m
  1,136
  1,435
  1,967
  2,632
  3,448
  4,426
  5,577
  6,911
  8,434
  10,148
  12,055
  14,153
  16,443
  18,918
  21,576
  24,412
  27,421
  30,601
  33,949
  37,459
  41,135
  44,971
  48,971
  53,137
  57,470
  61,976
  66,659
  71,525
  76,581
  81,838
  87,302
Debt-to-equity ratio
  0.512
  0.540
  0.620
  0.670
  0.710
  0.730
  0.750
  0.760
  0.770
  0.780
  0.790
  0.790
  0.800
  0.800
  0.800
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.820
  0.820
  0.820
  0.820
  0.820
  0.820
Adjusted equity ratio
  0.533
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  44
  200
  429
  718
  1,074
  1,503
  2,010
  2,598
  3,271
  4,030
  4,875
  5,807
  6,824
  7,923
  9,104
  10,364
  11,703
  13,117
  14,606
  16,168
  17,803
  19,511
  21,291
  23,146
  25,075
  27,081
  29,167
  31,334
  33,587
  35,928
  38,363
Depreciation, amort., depletion, $m
  32
  46
  62
  82
  107
  137
  172
  213
  260
  312
  370
  433
  503
  579
  660
  747
  839
  936
  1,039
  1,146
  1,258
  1,376
  1,498
  1,626
  1,758
  1,896
  2,039
  2,188
  2,343
  2,503
  2,671
Funds from operations, $m
  57
  246
  491
  800
  1,181
  1,640
  2,182
  2,811
  3,531
  4,342
  5,246
  6,240
  7,327
  8,502
  9,764
  11,111
  12,542
  14,053
  15,644
  17,314
  19,061
  20,886
  22,789
  24,771
  26,833
  28,977
  31,206
  33,522
  35,929
  38,432
  41,034
Change in working capital, $m
  -18
  75
  96
  120
  147
  176
  207
  240
  274
  308
  343
  378
  412
  445
  478
  510
  542
  572
  602
  632
  661
  690
  720
  749
  780
  811
  842
  875
  910
  946
  983
Cash from operations, $m
  75
  171
  395
  680
  1,034
  1,464
  1,975
  2,571
  3,257
  4,034
  4,902
  5,863
  6,915
  8,056
  9,286
  10,601
  12,000
  13,481
  15,042
  16,682
  18,400
  20,196
  22,070
  24,022
  26,053
  28,167
  30,363
  32,647
  35,020
  37,486
  40,051
Maintenance CAPEX, $m
  0
  -31
  -44
  -60
  -81
  -105
  -135
  -171
  -211
  -258
  -310
  -369
  -433
  -503
  -579
  -660
  -747
  -839
  -936
  -1,039
  -1,146
  -1,258
  -1,376
  -1,498
  -1,626
  -1,758
  -1,896
  -2,039
  -2,188
  -2,343
  -2,503
New CAPEX, $m
  -61
  -252
  -322
  -403
  -494
  -592
  -698
  -808
  -922
  -1,038
  -1,155
  -1,271
  -1,386
  -1,499
  -1,610
  -1,718
  -1,823
  -1,926
  -2,027
  -2,127
  -2,226
  -2,324
  -2,423
  -2,523
  -2,625
  -2,729
  -2,836
  -2,947
  -3,063
  -3,183
  -3,310
Cash from investing activities, $m
  -64
  -283
  -366
  -463
  -575
  -697
  -833
  -979
  -1,133
  -1,296
  -1,465
  -1,640
  -1,819
  -2,002
  -2,189
  -2,378
  -2,570
  -2,765
  -2,963
  -3,166
  -3,372
  -3,582
  -3,799
  -4,021
  -4,251
  -4,487
  -4,732
  -4,986
  -5,251
  -5,526
  -5,813
Free cash flow, $m
  11
  -112
  29
  217
  460
  766
  1,142
  1,593
  2,123
  2,737
  3,437
  4,223
  5,095
  6,054
  7,097
  8,223
  9,430
  10,716
  12,079
  13,517
  15,029
  16,614
  18,271
  20,001
  21,803
  23,680
  25,631
  27,660
  29,769
  31,960
  34,237
Issuance/(repayment) of debt, $m
  123
  187
  240
  300
  368
  441
  519
  602
  687
  773
  860
  947
  1,032
  1,116
  1,199
  1,279
  1,357
  1,434
  1,509
  1,584
  1,657
  1,731
  1,804
  1,879
  1,954
  2,032
  2,112
  2,195
  2,281
  2,370
  2,464
Issuance/(repurchase) of shares, $m
  -51
  27
  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 from financing (excl. dividends), $m  
  58
  214
  240
  300
  368
  441
  519
  602
  687
  773
  860
  947
  1,032
  1,116
  1,199
  1,279
  1,357
  1,434
  1,509
  1,584
  1,657
  1,731
  1,804
  1,879
  1,954
  2,032
  2,112
  2,195
  2,281
  2,370
  2,464
Total cash flow (excl. dividends), $m
  69
  102
  269
  517
  828
  1,207
  1,661
  2,194
  2,810
  3,511
  4,297
  5,169
  6,128
  7,170
  8,296
  9,502
  10,788
  12,150
  13,588
  15,100
  16,686
  18,344
  20,075
  21,879
  23,758
  25,711
  27,743
  29,855
  32,049
  34,330
  36,702
Retained Cash Flow (-), $m
  4
  -227
  -292
  -365
  -447
  -537
  -632
  -732
  -836
  -941
  -1,047
  -1,152
  -1,257
  -1,359
  -1,459
  -1,557
  -1,652
  -1,746
  -1,837
  -1,928
  -2,017
  -2,107
  -2,196
  -2,287
  -2,379
  -2,474
  -2,571
  -2,672
  -2,776
  -2,885
  -3,000
Prev. year cash balance distribution, $m
 
  46
  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
 
  -79
  -23
  152
  380
  670
  1,029
  1,462
  1,974
  2,569
  3,250
  4,017
  4,871
  5,811
  6,837
  7,945
  9,135
  10,404
  11,751
  13,173
  14,669
  16,238
  17,879
  19,592
  21,379
  23,238
  25,172
  27,183
  29,273
  31,445
  33,702
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
 
  -75
  -21
  131
  309
  511
  731
  962
  1,195
  1,422
  1,631
  1,814
  1,963
  2,071
  2,133
  2,149
  2,119
  2,045
  1,934
  1,792
  1,626
  1,446
  1,260
  1,074
  896
  732
  584
  455
  346
  257
  186
Current shareholders' claim on cash, %
  100
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5
  94.5

Renewable Energy Group, Inc. produces and sells biofuels and renewable chemicals in the United States. It operates through Biomass-Based Diesel, Services, Renewable Chemicals, and Corporate and Other segments. The Biomass-Based Diesel segment acquires feedstock; manages, constructs, and operates biomass-based diesel production facilities; and markets, sells, and distributes biomass-based diesel and its co-products. This segment produces biomass-based diesel from a range of feedstocks, including inedible corn oil, used cooking oil, soybean oil, canola oil, and inedible animal fat. It is also involved in purchase and resale of biomass-based diesel, petroleum-based diesel, renewable identification numbers, and raw material feedstocks acquired from third parties; and sale of glycerin, free fatty acids, naphtha, and other co-products of the biomass-based diesel production process. The Services segment provides facility management and operational services to biomass-based diesel production facilities, as well as to other clean-tech companies. This segment also offers construction management services for biomass-based diesel production facilities. The Renewable Chemicals segment engages in the production of renewable chemicals, advanced biofuels, and other products. The Corporate and Other segment trades petroleum-based heating oil and diesel fuel. Renewable Energy Group, Inc. was founded in 1996 and is headquartered in Ames, Iowa.

FINANCIAL RATIOS  of  Renewable Energy Group (REGI)

Valuation Ratios
P/E Ratio 11.2
Price to Sales 0.2
Price to Book 0.8
Price to Tangible Book
Price to Cash Flow 6.6
Price to Free Cash Flow 35.1
Growth Rates
Sales Growth Rate 47.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -4.7%
Cap. Spend. - 3 Yr. Gr. Rate 9.4%
Financial Strength
Quick Ratio 2
Current Ratio 0.1
LT Debt to Equity 39.7%
Total Debt to Equity 51.2%
Interest Coverage 6
Management Effectiveness
Return On Assets 4.5%
Ret/ On Assets - 3 Yr. Avg. 0.5%
Return On Total Capital 4.8%
Ret/ On T. Cap. - 3 Yr. Avg. -0.3%
Return On Equity 7.2%
Return On Equity - 3 Yr. Avg. -0.8%
Asset Turnover 1.7
Profitability Ratios
Gross Margin 8.4%
Gross Margin - 3 Yr. Avg. 9.7%
EBITDA Margin 4.5%
EBITDA Margin - 3 Yr. Avg. 1.2%
Operating Margin 2.5%
Oper. Margin - 3 Yr. Avg. -0.5%
Pre-Tax Margin 2.4%
Pre-Tax Margin - 3 Yr. Avg. -0.8%
Net Profit Margin 2.2%
Net Profit Margin - 3 Yr. Avg. -0.7%
Effective Tax Rate 8.2%
Eff/ Tax Rate - 3 Yr. Avg. 5.6%
Payout Ratio 0%

REGI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the REGI stock intrinsic value calculation we used $2041 million for the last fiscal year's total revenue generated by Renewable Energy Group. The default revenue input number comes from 2016 income statement of Renewable Energy Group. 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 REGI stock valuation model: a) initial revenue growth rate of 40.6% 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 REGI is calculated based on our internal credit rating of Renewable Energy Group, 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 Renewable Energy Group.
    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 REGI stock the variable cost ratio is equal to 68.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $607 million in the base year in the intrinsic value calculation for REGI 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 3.5% for Renewable Energy Group.

Corporate tax rate of 27% is the nominal tax rate for Renewable Energy Group. 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 REGI 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 REGI are equal to 30.3%.

Life of production assets of 19.8 years is the average useful life of capital assets used in Renewable Energy Group 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 REGI is equal to 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 - $607 million for Renewable Energy Group - 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 39.44 million for Renewable Energy Group 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 Renewable Energy Group at the current share price and the inputted number of shares is $0.5 billion.

RELATED COMPANIES Price Int.Val. Rating
FF FutureFuel 14.93 33.95  str.buy
XOM Exxon Mobil 80.27 102.38  buy
GEVO Gevo 0.700 1.18  str.buy
PEIX Pacific Ethano 6.30 43.17  str.buy
REX Rex American R 99.36 342.54  str.buy

COMPANY NEWS

▶ Renewable Energy Group reports 1Q loss   [05:02AM  Associated Press]
▶ REG to Purchase Geismar Land   [11:12AM  GlobeNewswire]
▶ Renewable Energy Group posts 4Q profit   [Mar-07-17 06:18PM  Associated Press]
▶ REG Announces Several Milestones   [08:00AM  GlobeNewswire]
▶ How Supreme Industries, Inc. (STS) Stacks Up Against Its Peers?   [Dec-13-16 08:36AM  at Insider Monkey]
▶ Is Renewable Energy Group Inc (REGI) A Good Stock To Buy?   [Dec-06-16 06:27AM  at Insider Monkey]
▶ REG Supports EPA Final Rule Increasing Advanced Biofuel RVO   [Nov-23-16 12:53PM  Business Wire]
▶ REG Breaks Ground for Ralston Biorefinery Expansion   [Nov-11-16 10:26AM  Business Wire]
▶ Top 5 Clean Energy Stocks of 2016 (CSIQ, PEGI)   [Sep-07-16 02:00PM  at Investopedia]
▶ The Best Diesel Stocks to Play Rising Oil Prices   [Aug-27-16 09:47AM  at Motley Fool]
Stock chart of REGI Financial statements of REGI Annual reports of REGI
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.