Intrinsic value of Team - TISI

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$27.25

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$27.25

 
Intrinsic value

$1.56

 
Up/down potential

-94%

 
Rating

str. sell

 
Value-price divergence* premium content

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

We calculate the intrinsic value of TISI 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 0.8

 

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, %
  109.27
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  1,197
  1,915
  2,959
  4,425
  6,421
  9,059
  12,454
  16,716
  21,950
  28,244
  35,674
  44,299
  54,160
  65,281
  77,672
  91,328
  106,237
  122,376
  139,719
  158,239
  177,908
  198,699
  220,592
  243,570
  267,621
  292,743
  318,939
  346,220
  374,604
  404,117
  434,792
Variable operating expenses, $m
 
  1,831
  2,809
  4,183
  6,053
  8,526
  11,708
  15,703
  20,608
  26,507
  33,472
  41,520
  50,762
  61,185
  72,798
  85,598
  99,571
  114,698
  130,953
  148,311
  166,746
  186,233
  206,752
  228,288
  250,830
  274,376
  298,929
  324,498
  351,101
  378,762
  407,512
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
  1,200
  1,831
  2,809
  4,183
  6,053
  8,526
  11,708
  15,703
  20,608
  26,507
  33,472
  41,520
  50,762
  61,185
  72,798
  85,598
  99,571
  114,698
  130,953
  148,311
  166,746
  186,233
  206,752
  228,288
  250,830
  274,376
  298,929
  324,498
  351,101
  378,762
  407,512
Operating income, $m
  -3
  85
  150
  242
  367
  533
  746
  1,013
  1,342
  1,736
  2,203
  2,779
  3,398
  4,096
  4,873
  5,730
  6,665
  7,678
  8,766
  9,928
  11,162
  12,467
  13,840
  15,282
  16,791
  18,367
  20,011
  21,722
  23,503
  25,355
  27,279
EBITDA, $m
  46
  159
  246
  368
  533
  752
  1,034
  1,389
  1,823
  2,346
  2,963
  3,680
  4,499
  5,422
  6,452
  7,586
  8,824
  10,165
  11,606
  13,144
  14,778
  16,505
  18,323
  20,232
  22,230
  24,316
  26,492
  28,758
  31,116
  33,567
  36,115
Interest expense (income), $m
  12
  12
  25
  43
  68
  102
  148
  206
  280
  370
  478
  606
  755
  925
  1,116
  1,330
  1,565
  1,822
  2,100
  2,399
  2,718
  3,056
  3,415
  3,792
  4,188
  4,602
  5,035
  5,486
  5,956
  6,445
  6,953
Earnings before tax, $m
  -16
  72
  125
  199
  299
  430
  598
  807
  1,062
  1,367
  1,724
  2,173
  2,643
  3,171
  3,757
  4,400
  5,100
  5,856
  6,666
  7,530
  8,445
  9,410
  10,426
  11,490
  12,603
  13,765
  14,976
  16,236
  17,547
  18,910
  20,326
Tax expense, $m
  -3
  20
  34
  54
  81
  116
  161
  218
  287
  369
  466
  587
  714
  856
  1,014
  1,188
  1,377
  1,581
  1,800
  2,033
  2,280
  2,541
  2,815
  3,102
  3,403
  3,717
  4,044
  4,384
  4,738
  5,106
  5,488
Net income, $m
  -13
  53
  92
  146
  218
  314
  437
  589
  775
  998
  1,259
  1,586
  1,930
  2,315
  2,743
  3,212
  3,723
  4,275
  4,866
  5,497
  6,165
  6,869
  7,611
  8,388
  9,200
  10,049
  10,932
  11,853
  12,809
  13,804
  14,838

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
  0
Total assets, $m
  1,147
  1,762
  2,722
  4,071
  5,907
  8,334
  11,457
  15,378
  20,193
  25,983
  32,819
  40,754
  49,825
  60,056
  71,455
  84,018
  97,734
  112,581
  128,536
  145,574
  163,669
  182,796
  202,937
  224,075
  246,202
  269,313
  293,412
  318,510
  344,622
  371,773
  399,992
Adjusted assets (=assets-cash), $m
  1,101
  1,762
  2,722
  4,071
  5,907
  8,334
  11,457
  15,378
  20,193
  25,983
  32,819
  40,754
  49,825
  60,056
  71,455
  84,018
  97,734
  112,581
  128,536
  145,574
  163,669
  182,796
  202,937
  224,075
  246,202
  269,313
  293,412
  318,510
  344,622
  371,773
  399,992
Revenue / Adjusted assets
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
  1.087
Average production assets, $m
  302
  483
  746
  1,115
  1,618
  2,283
  3,138
  4,213
  5,531
  7,117
  8,990
  11,163
  13,648
  16,451
  19,573
  23,015
  26,772
  30,839
  35,209
  39,876
  44,833
  50,072
  55,589
  61,380
  67,441
  73,771
  80,373
  87,247
  94,400
  101,837
  109,567
Working capital, $m
  253
  366
  565
  845
  1,226
  1,730
  2,379
  3,193
  4,192
  5,395
  6,814
  8,461
  10,345
  12,469
  14,835
  17,444
  20,291
  23,374
  26,686
  30,224
  33,980
  37,952
  42,133
  46,522
  51,116
  55,914
  60,917
  66,128
  71,549
  77,186
  83,045
Total debt, $m
  374
  706
  1,219
  1,941
  2,923
  4,221
  5,892
  7,990
  10,566
  13,664
  17,321
  21,566
  26,420
  31,893
  37,991
  44,713
  52,051
  59,994
  68,530
  77,645
  87,326
  97,559
  108,334
  119,643
  131,481
  143,845
  156,739
  170,166
  184,136
  198,661
  213,759
Total liabilities, $m
  612
  943
  1,456
  2,178
  3,160
  4,458
  6,129
  8,227
  10,803
  13,901
  17,558
  21,803
  26,657
  32,130
  38,228
  44,950
  52,288
  60,231
  68,767
  77,882
  87,563
  97,796
  108,571
  119,880
  131,718
  144,082
  156,976
  170,403
  184,373
  198,898
  213,996
Total equity, $m
  536
  819
  1,266
  1,893
  2,747
  3,875
  5,327
  7,151
  9,390
  12,082
  15,261
  18,950
  23,169
  27,926
  33,227
  39,069
  45,446
  52,350
  59,769
  67,692
  76,106
  85,000
  94,366
  104,195
  114,484
  125,231
  136,437
  148,107
  160,249
  172,874
  185,996
Total liabilities and equity, $m
  1,148
  1,762
  2,722
  4,071
  5,907
  8,333
  11,456
  15,378
  20,193
  25,983
  32,819
  40,753
  49,826
  60,056
  71,455
  84,019
  97,734
  112,581
  128,536
  145,574
  163,669
  182,796
  202,937
  224,075
  246,202
  269,313
  293,413
  318,510
  344,622
  371,772
  399,992
Debt-to-equity ratio
  0.698
  0.860
  0.960
  1.030
  1.060
  1.090
  1.110
  1.120
  1.130
  1.130
  1.140
  1.140
  1.140
  1.140
  1.140
  1.140
  1.150
  1.150
  1.150
  1.150
  1.150
  1.150
  1.150
  1.150
  1.150
  1.150
  1.150
  1.150
  1.150
  1.150
  1.150
Adjusted equity ratio
  0.445
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -13
  53
  92
  146
  218
  314
  437
  589
  775
  998
  1,259
  1,586
  1,930
  2,315
  2,743
  3,212
  3,723
  4,275
  4,866
  5,497
  6,165
  6,869
  7,611
  8,388
  9,200
  10,049
  10,932
  11,853
  12,809
  13,804
  14,838
Depreciation, amort., depletion, $m
  49
  75
  96
  126
  166
  220
  289
  375
  482
  610
  761
  900
  1,101
  1,327
  1,578
  1,856
  2,159
  2,487
  2,839
  3,216
  3,616
  4,038
  4,483
  4,950
  5,439
  5,949
  6,482
  7,036
  7,613
  8,213
  8,836
Funds from operations, $m
  111
  127
  187
  271
  385
  534
  725
  964
  1,257
  1,607
  2,019
  2,487
  3,030
  3,642
  4,321
  5,068
  5,882
  6,762
  7,706
  8,712
  9,780
  10,908
  12,094
  13,338
  14,639
  15,998
  17,414
  18,889
  20,422
  22,017
  23,674
Change in working capital, $m
  31
  137
  199
  280
  381
  504
  648
  814
  1,000
  1,202
  1,419
  1,647
  1,883
  2,124
  2,367
  2,608
  2,848
  3,083
  3,313
  3,537
  3,757
  3,971
  4,182
  4,389
  4,594
  4,798
  5,003
  5,211
  5,421
  5,637
  5,859
Cash from operations, $m
  80
  68
  -12
  -9
  3
  30
  77
  150
  257
  405
  600
  839
  1,147
  1,517
  1,954
  2,460
  3,035
  3,679
  4,393
  5,175
  6,023
  6,936
  7,912
  8,949
  10,045
  11,200
  12,411
  13,678
  15,001
  16,380
  17,815
Maintenance CAPEX, $m
  0
  -24
  -39
  -60
  -90
  -130
  -184
  -253
  -340
  -446
  -574
  -725
  -900
  -1,101
  -1,327
  -1,578
  -1,856
  -2,159
  -2,487
  -2,839
  -3,216
  -3,616
  -4,038
  -4,483
  -4,950
  -5,439
  -5,949
  -6,482
  -7,036
  -7,613
  -8,213
New CAPEX, $m
  -46
  -181
  -263
  -369
  -503
  -665
  -856
  -1,074
  -1,319
  -1,586
  -1,872
  -2,174
  -2,485
  -2,803
  -3,122
  -3,441
  -3,757
  -4,067
  -4,371
  -4,667
  -4,956
  -5,239
  -5,517
  -5,790
  -6,061
  -6,331
  -6,601
  -6,875
  -7,153
  -7,437
  -7,730
Cash from investing activities, $m
  -71
  -205
  -302
  -429
  -593
  -795
  -1,040
  -1,327
  -1,659
  -2,032
  -2,446
  -2,899
  -3,385
  -3,904
  -4,449
  -5,019
  -5,613
  -6,226
  -6,858
  -7,506
  -8,172
  -8,855
  -9,555
  -10,273
  -11,011
  -11,770
  -12,550
  -13,357
  -14,189
  -15,050
  -15,943
Free cash flow, $m
  9
  -138
  -314
  -439
  -589
  -765
  -963
  -1,177
  -1,401
  -1,627
  -1,846
  -2,059
  -2,238
  -2,386
  -2,495
  -2,560
  -2,578
  -2,547
  -2,464
  -2,331
  -2,149
  -1,919
  -1,643
  -1,324
  -966
  -570
  -140
  322
  812
  1,330
  1,873
Issuance/(repayment) of debt, $m
  -4
  354
  514
  722
  982
  1,298
  1,671
  2,098
  2,576
  3,098
  3,657
  4,245
  4,853
  5,474
  6,098
  6,721
  7,338
  7,943
  8,536
  9,115
  9,681
  10,233
  10,775
  11,309
  11,838
  12,365
  12,893
  13,427
  13,970
  14,526
  15,098
Issuance/(repurchase) of shares, $m
  4
  68
  247
  344
  461
  595
  744
  903
  1,064
  1,222
  1,368
  1,504
  1,603
  1,670
  1,697
  1,681
  1,618
  1,507
  1,347
  1,139
  882
  580
  233
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -6
  422
  761
  1,066
  1,443
  1,893
  2,415
  3,001
  3,640
  4,320
  5,025
  5,749
  6,456
  7,144
  7,795
  8,402
  8,956
  9,450
  9,883
  10,254
  10,563
  10,813
  11,008
  11,309
  11,838
  12,365
  12,893
  13,427
  13,970
  14,526
  15,098
Total cash flow (excl. dividends), $m
  1
  216
  200
  283
  393
  533
  708
  921
  1,174
  1,471
  1,811
  2,186
  2,615
  3,088
  3,604
  4,161
  4,759
  5,397
  6,072
  6,784
  7,532
  8,315
  9,132
  9,985
  10,872
  11,795
  12,753
  13,749
  14,782
  15,855
  16,970
Retained Cash Flow (-), $m
  -198
  -307
  -447
  -627
  -854
  -1,128
  -1,452
  -1,824
  -2,239
  -2,693
  -3,179
  -3,690
  -4,218
  -4,757
  -5,300
  -5,842
  -6,378
  -6,904
  -7,419
  -7,923
  -8,414
  -8,894
  -9,365
  -9,829
  -10,289
  -10,747
  -11,206
  -11,670
  -12,142
  -12,625
  -13,122
Prev. year cash balance distribution, $m
 
  24
  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
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  155
  583
  1,048
  1,547
  2,078
  2,640
  3,230
  3,848
Discount rate, %
 
  7.30
  7.67
  8.05
  8.45
  8.87
  9.32
  9.78
  10.27
  10.79
  11.32
  11.89
  12.49
  13.11
  13.77
  14.45
  15.18
  15.93
  16.73
  17.57
  18.45
  19.37
  20.34
  21.35
  22.42
  23.54
  24.72
  25.96
  27.25
  28.62
  30.05
PV of cash for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  2
  5
  5
  5
  4
  3
  2
  1
Current shareholders' claim on cash, %
  100
  91.8
  76.1
  64.2
  55.1
  48.0
  42.5
  38.1
  34.6
  31.8
  29.5
  27.6
  26.1
  24.9
  23.9
  23.1
  22.5
  22.0
  21.6
  21.3
  21.2
  21.0
  21.0
  21.0
  21.0
  21.0
  21.0
  21.0
  21.0
  21.0
  21.0

Team, Inc. provides specialty industrial services in the United States, Canada, Europe, and internationally. The company operates through three segments: Inspection and Heat Treating Services (IHT); Mechanical Services (MS); and Quest Integrity. The IHT segment offers non-destructive evaluation and testing, radiographic and ultrasonic testing, magnetic particle and liquid penetrant inspection, positive material identification, electromagnetic and eddy current testing, and alternating current field measurement services. It also provides long-range guided ultrasonic, phased array ultrasonic testing, tank inspection and management programs, rope access, mechanical integrity, and field heat treating services. The MS segment offers on-stream and turnaround/project related services, such as leak repair, fugitive emissions control, hot tapping, field machining and technical bolting, valve repair, heat exchanger and maintenance, isolation and test plug, valve insertion, and project services. The Quest Integrity segment provides furnace tube inspection system, in-line inspection services, pipeline integrity management services, and engineering assessment services. The company serves petrochemical, refining, power, pipeline, steel, pulp, and paper industries; and municipalities, shipbuilding, original equipment manufacturers, distributors, and engineering and construction firms. Team, Inc. was founded in 1973 and is headquartered in Sugar Land, Texas.

FINANCIAL RATIOS  of  Team (TISI)

Valuation Ratios
P/E Ratio -62.4
Price to Sales 0.7
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 10.1
Price to Free Cash Flow 23.9
Growth Rates
Sales Growth Rate 109.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 76.9%
Cap. Spend. - 3 Yr. Gr. Rate 6.9%
Financial Strength
Quick Ratio 2
Current Ratio 0.1
LT Debt to Equity 65.7%
Total Debt to Equity 69.8%
Interest Coverage 0
Management Effectiveness
Return On Assets -0.3%
Ret/ On Assets - 3 Yr. Avg. 3.2%
Return On Total Capital -1.6%
Ret/ On T. Cap. - 3 Yr. Avg. 3.3%
Return On Equity -3%
Return On Equity - 3 Yr. Avg. 4.1%
Asset Turnover 1.2
Profitability Ratios
Gross Margin 27.5%
Gross Margin - 3 Yr. Avg. 28.8%
EBITDA Margin 3.8%
EBITDA Margin - 3 Yr. Avg. 6.8%
Operating Margin -0.3%
Oper. Margin - 3 Yr. Avg. 3.7%
Pre-Tax Margin -1.3%
Pre-Tax Margin - 3 Yr. Avg. 2.8%
Net Profit Margin -1.1%
Net Profit Margin - 3 Yr. Avg. 1.7%
Effective Tax Rate 18.8%
Eff/ Tax Rate - 3 Yr. Avg. 28.1%
Payout Ratio 0%

TISI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TISI stock intrinsic value calculation we used $1197 million for the last fiscal year's total revenue generated by Team. The default revenue input number comes from 2016 income statement of Team. 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 TISI stock valuation model: a) initial revenue growth rate of 60% 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 7.3%, whose default value for TISI is calculated based on our internal credit rating of Team, 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 Team.
    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 TISI stock the variable cost ratio is equal to 96.7%.

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 TISI 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 Team.

Corporate tax rate of 27% is the nominal tax rate for Team. 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 TISI 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 TISI are equal to 25.2%.

Life of production assets of 12.4 years is the average useful life of capital assets used in Team 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 TISI is equal to 19.1%. 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 - $536 million for Team - 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 28.893 million for Team 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 Team at the current share price and the inputted number of shares is $0.8 billion.


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COMPANY NEWS

▶ ETFs with exposure to Team, Inc. : April 10, 2017   [Apr-10-17 01:58PM  Capital Cube]
▶ ETFs with exposure to Team, Inc. : March 27, 2017   [Mar-27-17 04:08PM  Capital Cube]
▶ Team reports 4Q loss   [Mar-07-17 05:48PM  Associated Press]
▶ Team, Inc. Value Analysis (NYSE:TISI) : January 11, 2017   [Jan-11-17 11:43AM  Capital Cube]
▶ Should You Buy Team, Inc. (TISI)?   [Dec-12-16 05:38PM  at Insider Monkey]
▶ The Prudent Speculator's Undervalued Favorites   [Aug-31-16 05:41PM  at Forbes]
▶ New Dropbox Productivity Features Released Today   [Jun-22-16 09:00AM  at Forbes]
▶ Houston industrial services merger likely to close soon   [Feb-26-16 01:05PM  at bizjournals.com]
Stock chart of TISI Financial statements of TISI
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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