Intrinsic value of Superior Energy Services - SPN

Previous Close

$9.48

  Intrinsic Value

$0.26

stock screener

  Rating & Target

str. sell

-97%

Previous close

$9.48

 
Intrinsic value

$0.26

 
Up/down potential

-97%

 
Rating

str. sell

We calculate the intrinsic value of SPN 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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, %
  -47.75
  29.20
  26.78
  24.60
  22.64
  20.88
  19.29
  17.86
  16.57
  15.42
  14.38
  13.44
  12.59
  11.83
  11.15
  10.54
  9.98
  9.48
  9.04
  8.63
  8.27
  7.94
  7.65
  7.38
  7.14
  6.93
  6.74
  6.56
  6.41
  6.27
  6.14
Revenue, $m
  1,450
  2,421
  3,070
  3,825
  4,691
  5,670
  6,764
  7,972
  9,293
  10,726
  12,268
  13,917
  15,669
  17,524
  19,478
  21,530
  23,679
  25,925
  28,268
  30,708
  33,247
  35,888
  38,632
  41,485
  44,449
  47,529
  50,731
  54,061
  57,525
  61,130
  64,883
Variable operating expenses, $m
 
  4,112
  5,187
  6,439
  7,875
  9,499
  11,313
  13,316
  15,507
  17,882
  20,439
  23,076
  25,982
  29,057
  32,297
  35,700
  39,263
  42,987
  46,872
  50,918
  55,128
  59,506
  64,057
  68,787
  73,702
  78,809
  84,119
  89,640
  95,384
  101,361
  107,584
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
  2,480
  4,112
  5,187
  6,439
  7,875
  9,499
  11,313
  13,316
  15,507
  17,882
  20,439
  23,076
  25,982
  29,057
  32,297
  35,700
  39,263
  42,987
  46,872
  50,918
  55,128
  59,506
  64,057
  68,787
  73,702
  78,809
  84,119
  89,640
  95,384
  101,361
  107,584
Operating income, $m
  -1,030
  -1,691
  -2,117
  -2,614
  -3,184
  -3,829
  -4,549
  -5,344
  -6,213
  -7,156
  -8,171
  -9,159
  -10,312
  -11,533
  -12,819
  -14,170
  -15,584
  -17,062
  -18,604
  -20,210
  -21,881
  -23,619
  -25,425
  -27,302
  -29,253
  -31,280
  -33,388
  -35,579
  -37,859
  -40,231
  -42,701
EBITDA, $m
  -520
  -1,276
  -1,617
  -2,015
  -2,471
  -2,987
  -3,563
  -4,200
  -4,896
  -5,651
  -6,463
  -7,332
  -8,255
  -9,232
  -10,262
  -11,343
  -12,475
  -13,658
  -14,892
  -16,178
  -17,516
  -18,907
  -20,353
  -21,855
  -23,417
  -25,040
  -26,727
  -28,481
  -30,306
  -32,205
  -34,182
Interest expense (income), $m
  93
  101
  147
  201
  264
  336
  417
  508
  609
  719
  839
  967
  1,104
  1,250
  1,405
  1,568
  1,739
  1,918
  2,105
  2,300
  2,504
  2,715
  2,935
  3,164
  3,401
  3,648
  3,905
  4,172
  4,449
  4,738
  5,038
Earnings before tax, $m
  -1,100
  -1,792
  -2,264
  -2,815
  -3,448
  -4,165
  -4,966
  -5,852
  -6,822
  -7,876
  -9,010
  -10,126
  -11,417
  -12,783
  -14,224
  -15,737
  -17,323
  -18,980
  -20,709
  -22,510
  -24,384
  -26,334
  -28,360
  -30,466
  -32,654
  -34,929
  -37,293
  -39,751
  -42,308
  -44,969
  -47,740
Tax expense, $m
  -267
  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
  -887
  -1,792
  -2,264
  -2,815
  -3,448
  -4,165
  -4,966
  -5,852
  -6,822
  -7,876
  -9,010
  -10,126
  -11,417
  -12,783
  -14,224
  -15,737
  -17,323
  -18,980
  -20,709
  -22,510
  -24,384
  -26,334
  -28,360
  -30,466
  -32,654
  -34,929
  -37,293
  -39,751
  -42,308
  -44,969
  -47,740

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  188
  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
  3,470
  4,015
  5,091
  6,343
  7,779
  9,403
  11,217
  13,221
  15,412
  17,788
  20,345
  23,079
  25,986
  29,061
  32,302
  35,705
  39,269
  42,994
  46,878
  50,925
  55,136
  59,515
  64,067
  68,797
  73,712
  78,821
  84,131
  89,653
  95,398
  101,376
  107,600
Adjusted assets (=assets-cash), $m
  3,282
  4,015
  5,091
  6,343
  7,779
  9,403
  11,217
  13,221
  15,412
  17,788
  20,345
  23,079
  25,986
  29,061
  32,302
  35,705
  39,269
  42,994
  46,878
  50,925
  55,136
  59,515
  64,067
  68,797
  73,712
  78,821
  84,131
  89,653
  95,398
  101,376
  107,600
Revenue / Adjusted assets
  0.442
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
Average production assets, $m
  2,034
  3,179
  4,030
  5,022
  6,159
  7,445
  8,881
  10,467
  12,202
  14,083
  16,108
  18,272
  20,574
  23,009
  25,574
  28,269
  31,091
  34,040
  37,115
  40,319
  43,653
  47,120
  50,724
  54,469
  58,361
  62,406
  66,610
  70,982
  75,530
  80,263
  85,191
Working capital, $m
  437
  19
  25
  31
  38
  45
  54
  64
  74
  86
  98
  111
  125
  140
  156
  172
  189
  207
  226
  246
  266
  287
  309
  332
  356
  380
  406
  432
  460
  489
  519
Total debt, $m
  1,285
  1,855
  2,539
  3,336
  4,249
  5,282
  6,436
  7,710
  9,103
  10,615
  12,241
  13,980
  15,828
  17,784
  19,845
  22,010
  24,277
  26,645
  29,116
  31,690
  34,368
  37,153
  40,048
  43,056
  46,183
  49,432
  52,809
  56,321
  59,974
  63,776
  67,735
Total liabilities, $m
  2,166
  2,554
  3,238
  4,034
  4,948
  5,980
  7,134
  8,408
  9,802
  11,313
  12,939
  14,678
  16,527
  18,483
  20,544
  22,708
  24,975
  27,344
  29,815
  32,388
  35,067
  37,852
  40,746
  43,755
  46,881
  50,130
  53,508
  57,020
  60,673
  64,475
  68,434
Total equity, $m
  1,304
  1,462
  1,853
  2,309
  2,832
  3,423
  4,083
  4,812
  5,610
  6,475
  7,406
  8,401
  9,459
  10,578
  11,758
  12,997
  14,294
  15,650
  17,064
  18,537
  20,070
  21,664
  23,320
  25,042
  26,831
  28,691
  30,624
  32,634
  34,725
  36,901
  39,166
Total liabilities and equity, $m
  3,470
  4,016
  5,091
  6,343
  7,780
  9,403
  11,217
  13,220
  15,412
  17,788
  20,345
  23,079
  25,986
  29,061
  32,302
  35,705
  39,269
  42,994
  46,879
  50,925
  55,137
  59,516
  64,066
  68,797
  73,712
  78,821
  84,132
  89,654
  95,398
  101,376
  107,600
Debt-to-equity ratio
  0.985
  1.270
  1.370
  1.440
  1.500
  1.540
  1.580
  1.600
  1.620
  1.640
  1.650
  1.660
  1.670
  1.680
  1.690
  1.690
  1.700
  1.700
  1.710
  1.710
  1.710
  1.720
  1.720
  1.720
  1.720
  1.720
  1.720
  1.730
  1.730
  1.730
  1.730
Adjusted equity ratio
  0.340
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -887
  -1,792
  -2,264
  -2,815
  -3,448
  -4,165
  -4,966
  -5,852
  -6,822
  -7,876
  -9,010
  -10,126
  -11,417
  -12,783
  -14,224
  -15,737
  -17,323
  -18,980
  -20,709
  -22,510
  -24,384
  -26,334
  -28,360
  -30,466
  -32,654
  -34,929
  -37,293
  -39,751
  -42,308
  -44,969
  -47,740
Depreciation, amort., depletion, $m
  510
  415
  500
  599
  713
  842
  985
  1,144
  1,317
  1,506
  1,708
  1,827
  2,057
  2,301
  2,557
  2,827
  3,109
  3,404
  3,712
  4,032
  4,365
  4,712
  5,072
  5,447
  5,836
  6,241
  6,661
  7,098
  7,553
  8,026
  8,519
Funds from operations, $m
  37
  -1,377
  -1,764
  -2,216
  -2,735
  -3,323
  -3,981
  -4,708
  -5,505
  -6,370
  -7,302
  -8,299
  -9,359
  -10,482
  -11,667
  -12,911
  -14,214
  -15,576
  -16,997
  -18,478
  -20,019
  -21,622
  -23,288
  -25,019
  -26,818
  -28,688
  -30,632
  -32,653
  -34,755
  -36,943
  -39,221
Change in working capital, $m
  -24
  4
  5
  6
  7
  8
  9
  10
  11
  11
  12
  13
  14
  15
  16
  16
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
Cash from operations, $m
  61
  -1,381
  -1,769
  -2,222
  -2,742
  -3,331
  -3,989
  -4,718
  -5,516
  -6,381
  -7,314
  -8,312
  -9,374
  -10,497
  -11,682
  -12,927
  -14,231
  -15,594
  -17,016
  -18,498
  -20,039
  -21,643
  -23,310
  -25,042
  -26,842
  -28,713
  -30,658
  -32,680
  -34,783
  -36,972
  -39,251
Maintenance CAPEX, $m
  0
  -246
  -318
  -403
  -502
  -616
  -744
  -888
  -1,047
  -1,220
  -1,408
  -1,611
  -1,827
  -2,057
  -2,301
  -2,557
  -2,827
  -3,109
  -3,404
  -3,712
  -4,032
  -4,365
  -4,712
  -5,072
  -5,447
  -5,836
  -6,241
  -6,661
  -7,098
  -7,553
  -8,026
New CAPEX, $m
  -81
  -718
  -851
  -992
  -1,137
  -1,286
  -1,436
  -1,586
  -1,735
  -1,881
  -2,025
  -2,165
  -2,301
  -2,435
  -2,566
  -2,695
  -2,822
  -2,949
  -3,076
  -3,204
  -3,334
  -3,467
  -3,604
  -3,745
  -3,892
  -4,045
  -4,204
  -4,372
  -4,548
  -4,733
  -4,928
Cash from investing activities, $m
  -74
  -964
  -1,169
  -1,395
  -1,639
  -1,902
  -2,180
  -2,474
  -2,782
  -3,101
  -3,433
  -3,776
  -4,128
  -4,492
  -4,867
  -5,252
  -5,649
  -6,058
  -6,480
  -6,916
  -7,366
  -7,832
  -8,316
  -8,817
  -9,339
  -9,881
  -10,445
  -11,033
  -11,646
  -12,286
  -12,954
Free cash flow, $m
  -13
  -2,346
  -2,938
  -3,616
  -4,381
  -5,232
  -6,170
  -7,192
  -8,297
  -9,483
  -10,747
  -12,087
  -13,502
  -14,990
  -16,549
  -18,179
  -19,880
  -21,652
  -23,496
  -25,413
  -27,405
  -29,475
  -31,626
  -33,859
  -36,181
  -38,594
  -41,103
  -43,713
  -46,429
  -49,258
  -52,205
Issuance/(repayment) of debt, $m
  -338
  575
  684
  797
  913
  1,033
  1,154
  1,274
  1,394
  1,511
  1,626
  1,739
  1,849
  1,956
  2,061
  2,165
  2,267
  2,369
  2,471
  2,574
  2,678
  2,785
  2,895
  3,008
  3,126
  3,249
  3,377
  3,512
  3,653
  3,802
  3,959
Issuance/(repurchase) of shares, $m
  0
  2,121
  2,655
  3,271
  3,971
  4,756
  5,626
  6,581
  7,620
  8,740
  9,941
  11,121
  12,475
  13,903
  15,404
  16,976
  18,620
  20,336
  22,123
  23,983
  25,917
  27,928
  30,017
  32,188
  34,444
  36,788
  39,226
  41,761
  44,399
  47,145
  50,005
Cash from financing (excl. dividends), $m  
  -343
  2,696
  3,339
  4,068
  4,884
  5,789
  6,780
  7,855
  9,014
  10,251
  11,567
  12,860
  14,324
  15,859
  17,465
  19,141
  20,887
  22,705
  24,594
  26,557
  28,595
  30,713
  32,912
  35,196
  37,570
  40,037
  42,603
  45,273
  48,052
  50,947
  53,964
Total cash flow (excl. dividends), $m
  -364
  351
  401
  451
  503
  556
  610
  663
  716
  769
  820
  773
  821
  869
  916
  962
  1,007
  1,053
  1,098
  1,144
  1,190
  1,238
  1,286
  1,337
  1,389
  1,444
  1,501
  1,561
  1,623
  1,689
  1,759
Retained Cash Flow (-), $m
  907
  -2,121
  -2,655
  -3,271
  -3,971
  -4,756
  -5,626
  -6,581
  -7,620
  -8,740
  -9,941
  -11,121
  -12,475
  -13,903
  -15,404
  -16,976
  -18,620
  -20,336
  -22,123
  -23,983
  -25,917
  -27,928
  -30,017
  -32,188
  -34,444
  -36,788
  -39,226
  -41,761
  -44,399
  -47,145
  -50,005
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
 
  36
  46
  58
  73
  89
  108
  129
  151
  177
  204
  233
  264
  298
  333
  370
  409
  450
  493
  537
  583
  632
  682
  734
  788
  845
  903
  964
  1,027
  1,093
  1,161
Cash available for distribution, $m
 
  -1,770
  -2,254
  -2,820
  -3,468
  -4,200
  -5,016
  -5,918
  -6,904
  -7,972
  -9,121
  -10,349
  -11,653
  -13,034
  -14,488
  -16,014
  -17,613
  -19,283
  -21,025
  -22,839
  -24,727
  -26,690
  -28,731
  -30,851
  -33,055
  -35,345
  -37,725
  -40,201
  -42,776
  -45,456
  -48,246
Discount rate, %
 
  8.10
  8.51
  8.93
  9.38
  9.85
  10.34
  10.85
  11.40
  11.97
  12.57
  13.19
  13.85
  14.55
  15.27
  16.04
  16.84
  17.68
  18.57
  19.49
  20.47
  21.49
  22.57
  23.69
  24.88
  26.12
  27.43
  28.80
  30.24
  31.75
  33.34
PV of cash for distribution, $m
 
  -1,637
  -1,915
  -2,182
  -2,423
  -2,626
  -2,780
  -2,877
  -2,911
  -2,882
  -2,792
  -2,647
  -2,456
  -2,230
  -1,980
  -1,720
  -1,460
  -1,211
  -981
  -775
  -597
  -448
  -327
  -232
  -160
  -107
  -69
  -43
  -26
  -15
  -9
Current shareholders' claim on cash, %
  100
  40.6
  16.8
  7.1
  3.0
  1.3
  0.6
  0.3
  0.1
  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

Superior Energy Services, Inc. provides a range of services and products to the energy industry related to the exploration, development and production of oil and natural gas. The Company's segments include Drilling Products and Services, which rents and sells bottom hole assemblies, drill pipe, tubulars and specialized equipment for use with onshore and offshore oil and gas well drilling, production and workover activities; Onshore Completion and Workover Services, which provides pressure pumping services used to complete and stimulate production in new oil and gas wells, fluid handling services and well servicing rigs that provide a range of well completion and maintenance services; Production Services, which provides intervention services, such as coiled tubing, cased hole and mechanical wireline, hydraulic workover and snubbing, and remedial pumping services, and Technical Solutions, which provides services requiring specialized engineering, manufacturing or project planning.

FINANCIAL RATIOS  of  Superior Energy Services (SPN)

Valuation Ratios
P/E Ratio -1.6
Price to Sales 1
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 23.6
Price to Free Cash Flow -72
Growth Rates
Sales Growth Rate -47.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -80%
Cap. Spend. - 3 Yr. Gr. Rate -33.2%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 98.5%
Total Debt to Equity 98.5%
Interest Coverage -11
Management Effectiveness
Return On Assets -19.5%
Ret/ On Assets - 3 Yr. Avg. -14.7%
Return On Total Capital -27.6%
Ret/ On T. Cap. - 3 Yr. Avg. -20.7%
Return On Equity -50.5%
Return On Equity - 3 Yr. Avg. -34.4%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 22.6%
Gross Margin - 3 Yr. Avg. 31.8%
EBITDA Margin -34.3%
EBITDA Margin - 3 Yr. Avg. -18.9%
Operating Margin -71%
Oper. Margin - 3 Yr. Avg. -43.1%
Pre-Tax Margin -75.9%
Pre-Tax Margin - 3 Yr. Avg. -46.8%
Net Profit Margin -61.2%
Net Profit Margin - 3 Yr. Avg. -40.8%
Effective Tax Rate 24.3%
Eff/ Tax Rate - 3 Yr. Avg. 24.3%
Payout Ratio -1.4%

SPN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SPN stock intrinsic value calculation we used $1874 million for the last fiscal year's total revenue generated by Superior Energy Services. The default revenue input number comes from 2016 income statement of Superior Energy Services. 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 SPN stock valuation model: a) initial revenue growth rate of 29.2% 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 8.1%, whose default value for SPN is calculated based on our internal credit rating of Superior Energy Services, 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 Superior Energy Services.
    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 SPN stock the variable cost ratio is equal to 171%.

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 SPN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 7.9% for Superior Energy Services.

Corporate tax rate of 27% is the nominal tax rate for Superior Energy Services. 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 SPN stock is equal to 1.9%.

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 SPN are equal to 131.3%.

Life of production assets of 10 years is the average useful life of capital assets used in Superior Energy Services 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 SPN is equal to 0.8%. 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 - $1132 million for Superior Energy Services - 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 153 million for Superior Energy Services 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 Superior Energy Services at the current share price and the inputted number of shares is $1.5 billion.

RELATED COMPANIES Price Int.Val. Rating
HAL Halliburton 40.67 1.63  str.sell
BAS Basic Energy S 8.62 2,040.04  str.buy
SLB Schlumberger 64.80 25.48  str.sell
NOV National Oilwe 45.20 3.03  str.sell
TTI Tetra Technolo 4.93 0.34  str.sell
PES Pioneer Energy 3.15 28.43  str.buy

COMPANY NEWS

▶ Best Sectors to Sell Short in 2018   [Aug-09-18 06:00AM  Investopedia]
▶ Superior Energy: 2Q Earnings Snapshot   [Jul-24-18 04:27PM  Associated Press]
▶ Superior Energy: 1Q Earnings Snapshot   [Apr-24-18 04:40PM  Associated Press]
▶ Why Oil Stocks Are Red-Hot Today   [Apr-10-18 04:10PM  Motley Fool]
▶ Edited Transcript of SPN presentation 6-Mar-17 8:25pm GMT   [10:59AM  Thomson Reuters StreetEvents]
▶ Superior Energy misses Street 4Q forecasts   [05:01AM  Associated Press]
▶ Wall Streets Forecasts for NOV ahead of 4Q17 Earnings   [Jan-26-18 07:30AM  Market Realist]
▶ Analysts Forecast for Halliburton after Its 4Q17 Earnings   [Jan-23-18 12:07PM  Market Realist]
▶ Gauging Short Interest in Weatherford International   [Jan-22-18 07:32AM  Market Realist]
▶ Short Interest in Halliburton on January 4   [Jan-11-18 09:02AM  Market Realist]
▶ Analyzing Halliburtons Revenue and Earnings in 3Q17   [Jan-10-18 02:00PM  Market Realist]
▶ The Top Oilfield Services Free Cash Earner in 3Q17   [Dec-27-17 02:35PM  Market Realist]
▶ Oilfield Services Gainers: BAS, SPN, BHGE, IO, and NOV   [Nov-08-17 02:40PM  Market Realist]
▶ WFT, FMSA, and SPN: Returns and Outlook after 3Q17   [Nov-07-17 10:30AM  Market Realist]
▶ Why Weatherfords 3Q17 Earnings Beat Estimates   [09:03AM  Market Realist]
▶ Superior Energy reports 3Q loss   [Oct-23-17 04:47PM  Associated Press]
▶ Gauging Short Interest in SPN, HAL, NOV, FMSA, and PTEN   [Aug-29-17 10:39AM  Market Realist]
▶ Why Superior Energy Services Free Cash Growth Beats Peers   [Aug-28-17 05:35PM  Market Realist]
▶ Analyzing Fairmount Santrols 2Q17 Segmental Performance   [Aug-04-17 03:05PM  Market Realist]
▶ Basic Energy Services 2Q17 Earnings Beat Estimates   [Aug-02-17 06:05PM  Market Realist]
▶ Superior Energy reports 2Q loss   [Jul-25-17 10:32PM  Associated Press]
▶ SESI, L.L.C. -- Moody's downgrades SESI to B2   [Jul-19-17 03:06PM  Moody's]
Financial statements of SPN
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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