Intrinsic value of Unit - UNT

Previous Close

$15.87

  Intrinsic Value

$5.46

stock screener

  Rating & Target

str. sell

-66%

  Value-price divergence*

-119%

Previous close

$15.87

 
Intrinsic value

$5.46

 
Up/down potential

-66%

 
Rating

str. sell

 
Value-price divergence*

-119%

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

We calculate the intrinsic value of UNT 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, %
  -29.51
  29.40
  26.96
  24.76
  22.79
  21.01
  19.41
  17.97
  16.67
  15.50
  14.45
  13.51
  12.66
  11.89
  11.20
  10.58
  10.02
  9.52
  9.07
  8.66
  8.30
  7.97
  7.67
  7.40
  7.16
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
Revenue, $m
  602
  779
  989
  1,234
  1,515
  1,833
  2,189
  2,583
  3,013
  3,480
  3,983
  4,521
  5,094
  5,699
  6,338
  7,008
  7,711
  8,445
  9,211
  10,009
  10,839
  11,703
  12,600
  13,533
  14,502
  15,510
  16,557
  17,646
  18,778
  19,957
  21,184
Variable operating expenses, $m
 
  2,290
  2,906
  3,624
  4,448
  5,381
  6,424
  7,577
  8,839
  10,209
  11,683
  13,254
  14,932
  16,707
  18,579
  20,545
  22,604
  24,757
  27,002
  29,341
  31,775
  34,307
  36,938
  39,672
  42,514
  45,467
  48,537
  51,729
  55,049
  58,504
  62,102
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
  747
  2,290
  2,906
  3,624
  4,448
  5,381
  6,424
  7,577
  8,839
  10,209
  11,683
  13,254
  14,932
  16,707
  18,579
  20,545
  22,604
  24,757
  27,002
  29,341
  31,775
  34,307
  36,938
  39,672
  42,514
  45,467
  48,537
  51,729
  55,049
  58,504
  62,102
Operating income, $m
  -144
  -1,511
  -1,917
  -2,390
  -2,933
  -3,548
  -4,235
  -4,995
  -5,826
  -6,728
  -7,700
  -8,733
  -9,838
  -11,008
  -12,241
  -13,537
  -14,894
  -16,312
  -17,791
  -19,332
  -20,936
  -22,604
  -24,338
  -26,139
  -28,012
  -29,957
  -31,980
  -34,083
  -36,271
  -38,548
  -40,918
EBITDA, $m
  64
  -1,243
  -1,577
  -1,968
  -2,417
  -2,924
  -3,492
  -4,119
  -4,806
  -5,551
  -6,353
  -7,212
  -8,124
  -9,090
  -10,109
  -11,178
  -12,299
  -13,470
  -14,692
  -15,964
  -17,289
  -18,666
  -20,098
  -21,585
  -23,132
  -24,738
  -26,409
  -28,145
  -29,952
  -31,832
  -33,789
Interest expense (income), $m
  36
  34
  49
  68
  89
  114
  141
  173
  207
  245
  286
  330
  377
  427
  480
  536
  595
  656
  720
  788
  857
  930
  1,006
  1,084
  1,166
  1,251
  1,339
  1,431
  1,526
  1,625
  1,729
Earnings before tax, $m
  -207
  -1,545
  -1,966
  -2,457
  -3,022
  -3,661
  -4,376
  -5,167
  -6,033
  -6,973
  -7,986
  -9,063
  -10,215
  -11,435
  -12,721
  -14,073
  -15,488
  -16,968
  -18,512
  -20,120
  -21,793
  -23,534
  -25,343
  -27,224
  -29,178
  -31,208
  -33,319
  -35,514
  -37,797
  -40,173
  -42,646
Tax expense, $m
  -71
  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
  -136
  -1,545
  -1,966
  -2,457
  -3,022
  -3,661
  -4,376
  -5,167
  -6,033
  -6,973
  -7,986
  -9,063
  -10,215
  -11,435
  -12,721
  -14,073
  -15,488
  -16,968
  -18,512
  -20,120
  -21,793
  -23,534
  -25,343
  -27,224
  -29,178
  -31,208
  -33,319
  -35,514
  -37,797
  -40,173
  -42,646

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  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
Total assets, $m
  2,479
  3,206
  4,070
  5,078
  6,235
  7,545
  9,009
  10,628
  12,400
  14,322
  16,392
  18,606
  20,961
  23,454
  26,081
  28,841
  31,732
  34,753
  37,905
  41,188
  44,605
  48,159
  51,852
  55,691
  59,680
  63,825
  68,135
  72,616
  77,277
  82,127
  87,178
Adjusted assets (=assets-cash), $m
  2,478
  3,206
  4,070
  5,078
  6,235
  7,545
  9,009
  10,628
  12,400
  14,322
  16,392
  18,606
  20,961
  23,454
  26,081
  28,841
  31,732
  34,753
  37,905
  41,188
  44,605
  48,159
  51,852
  55,691
  59,680
  63,825
  68,135
  72,616
  77,277
  82,127
  87,178
Revenue / Adjusted assets
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
Average production assets, $m
  2,431
  3,146
  3,994
  4,983
  6,118
  7,403
  8,840
  10,428
  12,167
  14,053
  16,084
  18,257
  20,568
  23,013
  25,591
  28,300
  31,136
  34,101
  37,194
  40,415
  43,768
  47,255
  50,879
  54,646
  58,560
  62,628
  66,856
  71,253
  75,827
  80,586
  85,542
Working capital, $m
  -44
  -58
  -74
  -93
  -114
  -138
  -164
  -194
  -226
  -261
  -299
  -339
  -382
  -427
  -475
  -526
  -578
  -633
  -691
  -751
  -813
  -878
  -945
  -1,015
  -1,088
  -1,163
  -1,242
  -1,323
  -1,408
  -1,497
  -1,589
Total debt, $m
  820
  1,199
  1,647
  2,170
  2,771
  3,451
  4,211
  5,051
  5,970
  6,968
  8,042
  9,192
  10,414
  11,707
  13,071
  14,503
  16,004
  17,572
  19,208
  20,912
  22,685
  24,529
  26,446
  28,439
  30,509
  32,660
  34,897
  37,222
  39,642
  42,159
  44,780
Total liabilities, $m
  1,285
  1,664
  2,112
  2,635
  3,236
  3,916
  4,676
  5,516
  6,435
  7,433
  8,507
  9,657
  10,879
  12,172
  13,536
  14,968
  16,469
  18,037
  19,673
  21,377
  23,150
  24,994
  26,911
  28,904
  30,974
  33,125
  35,362
  37,687
  40,107
  42,624
  45,245
Total equity, $m
  1,194
  1,542
  1,958
  2,442
  2,999
  3,629
  4,333
  5,112
  5,964
  6,889
  7,885
  8,950
  10,082
  11,281
  12,545
  13,872
  15,263
  16,716
  18,232
  19,812
  21,455
  23,164
  24,941
  26,787
  28,706
  30,700
  32,773
  34,928
  37,170
  39,503
  41,932
Total liabilities and equity, $m
  2,479
  3,206
  4,070
  5,077
  6,235
  7,545
  9,009
  10,628
  12,399
  14,322
  16,392
  18,607
  20,961
  23,453
  26,081
  28,840
  31,732
  34,753
  37,905
  41,189
  44,605
  48,158
  51,852
  55,691
  59,680
  63,825
  68,135
  72,615
  77,277
  82,127
  87,177
Debt-to-equity ratio
  0.687
  0.780
  0.840
  0.890
  0.920
  0.950
  0.970
  0.990
  1.000
  1.010
  1.020
  1.030
  1.030
  1.040
  1.040
  1.050
  1.050
  1.050
  1.050
  1.060
  1.060
  1.060
  1.060
  1.060
  1.060
  1.060
  1.060
  1.070
  1.070
  1.070
  1.070
Adjusted equity ratio
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -136
  -1,545
  -1,966
  -2,457
  -3,022
  -3,661
  -4,376
  -5,167
  -6,033
  -6,973
  -7,986
  -9,063
  -10,215
  -11,435
  -12,721
  -14,073
  -15,488
  -16,968
  -18,512
  -20,120
  -21,793
  -23,534
  -25,343
  -27,224
  -29,178
  -31,208
  -33,319
  -35,514
  -37,797
  -40,173
  -42,646
Depreciation, amort., depletion, $m
  208
  268
  339
  422
  516
  623
  743
  875
  1,020
  1,177
  1,347
  1,521
  1,714
  1,918
  2,133
  2,358
  2,595
  2,842
  3,099
  3,368
  3,647
  3,938
  4,240
  4,554
  4,880
  5,219
  5,571
  5,938
  6,319
  6,716
  7,128
Funds from operations, $m
  274
  -1,276
  -1,627
  -2,036
  -2,506
  -3,038
  -3,633
  -4,292
  -5,013
  -5,796
  -6,639
  -7,541
  -8,501
  -9,517
  -10,589
  -11,714
  -12,894
  -14,126
  -15,412
  -16,752
  -18,146
  -19,596
  -21,103
  -22,670
  -24,298
  -25,989
  -27,748
  -29,576
  -31,478
  -33,457
  -35,518
Change in working capital, $m
  34
  -13
  -16
  -18
  -21
  -24
  -27
  -30
  -32
  -35
  -38
  -40
  -43
  -45
  -48
  -50
  -53
  -55
  -57
  -60
  -62
  -65
  -67
  -70
  -73
  -76
  -79
  -82
  -85
  -88
  -92
Cash from operations, $m
  240
  -1,263
  -1,611
  -2,017
  -2,485
  -3,014
  -3,607
  -4,262
  -4,981
  -5,761
  -6,601
  -7,501
  -8,458
  -9,472
  -10,541
  -11,664
  -12,841
  -14,071
  -15,355
  -16,692
  -18,084
  -19,531
  -21,036
  -22,600
  -24,225
  -25,914
  -27,669
  -29,494
  -31,393
  -33,369
  -35,426
Maintenance CAPEX, $m
  0
  -203
  -262
  -333
  -415
  -510
  -617
  -737
  -869
  -1,014
  -1,171
  -1,340
  -1,521
  -1,714
  -1,918
  -2,133
  -2,358
  -2,595
  -2,842
  -3,099
  -3,368
  -3,647
  -3,938
  -4,240
  -4,554
  -4,880
  -5,219
  -5,571
  -5,938
  -6,319
  -6,716
New CAPEX, $m
  -187
  -715
  -848
  -989
  -1,135
  -1,285
  -1,437
  -1,588
  -1,738
  -1,886
  -2,031
  -2,173
  -2,311
  -2,446
  -2,578
  -2,708
  -2,837
  -2,965
  -3,093
  -3,222
  -3,353
  -3,487
  -3,624
  -3,767
  -3,914
  -4,068
  -4,228
  -4,397
  -4,574
  -4,760
  -4,955
Cash from investing activities, $m
  -111
  -918
  -1,110
  -1,322
  -1,550
  -1,795
  -2,054
  -2,325
  -2,607
  -2,900
  -3,202
  -3,513
  -3,832
  -4,160
  -4,496
  -4,841
  -5,195
  -5,560
  -5,935
  -6,321
  -6,721
  -7,134
  -7,562
  -8,007
  -8,468
  -8,948
  -9,447
  -9,968
  -10,512
  -11,079
  -11,671
Free cash flow, $m
  129
  -2,180
  -2,721
  -3,339
  -4,035
  -4,809
  -5,660
  -6,587
  -7,588
  -8,661
  -9,804
  -11,014
  -12,290
  -13,632
  -15,037
  -16,505
  -18,036
  -19,630
  -21,289
  -23,013
  -24,805
  -26,665
  -28,598
  -30,606
  -32,693
  -34,861
  -37,116
  -39,463
  -41,904
  -44,447
  -47,097
Issuance/(repayment) of debt, $m
  -129
  379
  449
  523
  601
  680
  760
  840
  920
  998
  1,074
  1,149
  1,222
  1,294
  1,364
  1,432
  1,500
  1,568
  1,636
  1,704
  1,773
  1,844
  1,917
  1,992
  2,070
  2,152
  2,237
  2,326
  2,419
  2,517
  2,621
Issuance/(repurchase) of shares, $m
  0
  1,894
  2,381
  2,942
  3,578
  4,291
  5,081
  5,946
  6,885
  7,898
  8,981
  10,128
  11,348
  12,634
  13,985
  15,400
  16,879
  18,421
  20,028
  21,699
  23,437
  25,243
  27,120
  29,070
  31,096
  33,202
  35,392
  37,669
  40,039
  42,506
  45,076
Cash from financing (excl. dividends), $m  
  -129
  2,273
  2,830
  3,465
  4,179
  4,971
  5,841
  6,786
  7,805
  8,896
  10,055
  11,277
  12,570
  13,928
  15,349
  16,832
  18,379
  19,989
  21,664
  23,403
  25,210
  27,087
  29,037
  31,062
  33,166
  35,354
  37,629
  39,995
  42,458
  45,023
  47,697
Total cash flow (excl. dividends), $m
  0
  92
  109
  126
  144
  162
  180
  199
  217
  235
  252
  263
  280
  296
  312
  328
  343
  359
  374
  390
  406
  422
  439
  456
  474
  492
  512
  532
  554
  576
  600
Retained Cash Flow (-), $m
  120
  -1,894
  -2,381
  -2,942
  -3,578
  -4,291
  -5,081
  -5,946
  -6,885
  -7,898
  -8,981
  -10,128
  -11,348
  -12,634
  -13,985
  -15,400
  -16,879
  -18,421
  -20,028
  -21,699
  -23,437
  -25,243
  -27,120
  -29,070
  -31,096
  -33,202
  -35,392
  -37,669
  -40,039
  -42,506
  -45,076
Prev. year cash balance distribution, $m
 
  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
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
 
  -1,800
  -2,273
  -2,816
  -3,435
  -4,129
  -4,900
  -5,747
  -6,669
  -7,663
  -8,729
  -9,865
  -11,068
  -12,338
  -13,673
  -15,072
  -16,536
  -18,062
  -19,653
  -21,309
  -23,031
  -24,821
  -26,681
  -28,614
  -30,622
  -32,710
  -34,880
  -37,137
  -39,485
  -41,930
  -44,476
Discount rate, %
 
  6.90
  7.25
  7.61
  7.99
  8.39
  8.81
  9.25
  9.71
  10.19
  10.70
  11.24
  11.80
  12.39
  13.01
  13.66
  14.34
  15.06
  15.81
  16.61
  17.44
  18.31
  19.22
  20.18
  21.19
  22.25
  23.37
  24.53
  25.76
  27.05
  28.40
PV of cash for distribution, $m
 
  -1,684
  -1,976
  -2,260
  -2,526
  -2,761
  -2,953
  -3,095
  -3,178
  -3,199
  -3,157
  -3,057
  -2,902
  -2,702
  -2,467
  -2,208
  -1,936
  -1,663
  -1,399
  -1,151
  -925
  -727
  -558
  -417
  -304
  -215
  -148
  -99
  -64
  -40
  -25
Current shareholders' claim on cash, %
  100
  30.6
  9.5
  3.0
  1.0
  0.3
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Unit Corporation, together with its subsidiaries, operates as an oil and natural gas contract drilling company primarily in the United States. The company operates through three segments: Oil and Natural Gas, Contract Drilling, and Mid-Stream. The Oil and Natural Gas segment acquires, explores, develops, and produces oil and natural gas properties primarily located in Oklahoma and Texas, as well as in Arkansas, Colorado, Kansas, Louisiana, Mississippi, Montana, New Mexico, North Dakota, and Wyoming. As of December 31, 2015, this segment had approximately 65 gross proved undeveloped wells. The Contract Drilling segment is involved in the land contract drilling of onshore oil and natural gas wells for its own account, as well as for a range of other oil and natural gas companies primarily in Oklahoma, Texas, Wyoming, and North Dakota, as well as in Louisiana and Kansas. As of December 31, 2015, this segment had 26 operating rigs. The Mid-Stream segment buys, sells, gathers, transports, processes, and treats natural gas for third parties and for its own account. This segment operates 3 natural gas treatment plants, 13 processing plants, and 25 gathering systems, as well as approximately 1,464 miles of pipeline in Oklahoma, Texas, Kansas, Pennsylvania, and West Virginia. Unit Corporation was founded in 1963 and is based in Tulsa, Oklahoma.

FINANCIAL RATIOS  of  Unit (UNT)

Valuation Ratios
P/E Ratio -6
Price to Sales 1.4
Price to Book 0.7
Price to Tangible Book
Price to Cash Flow 3.4
Price to Free Cash Flow 15.4
Growth Rates
Sales Growth Rate -29.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -66.7%
Cap. Spend. - 3 Yr. Gr. Rate -23.3%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 68.7%
Total Debt to Equity 68.7%
Interest Coverage -5
Management Effectiveness
Return On Assets -4.3%
Ret/ On Assets - 3 Yr. Avg. -9.6%
Return On Total Capital -6.4%
Ret/ On T. Cap. - 3 Yr. Avg. -13.4%
Return On Equity -10.8%
Return On Equity - 3 Yr. Avg. -20.6%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 8%
Gross Margin - 3 Yr. Avg. 10.1%
EBITDA Margin 6.1%
EBITDA Margin - 3 Yr. Avg. -34.2%
Operating Margin -24.1%
Oper. Margin - 3 Yr. Avg. -68.3%
Pre-Tax Margin -34.4%
Pre-Tax Margin - 3 Yr. Avg. -71.7%
Net Profit Margin -22.6%
Net Profit Margin - 3 Yr. Avg. -45.1%
Effective Tax Rate 34.3%
Eff/ Tax Rate - 3 Yr. Avg. 37%
Payout Ratio 0%

UNT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the UNT stock intrinsic value calculation we used $602 million for the last fiscal year's total revenue generated by Unit. The default revenue input number comes from 2016 income statement of Unit. 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 UNT stock valuation model: a) initial revenue growth rate of 29.4% 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 6.9%, whose default value for UNT is calculated based on our internal credit rating of Unit, 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 Unit.
    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 UNT stock the variable cost ratio is equal to 294.2%.

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 UNT 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 4.1% for Unit.

Corporate tax rate of 27% is the nominal tax rate for Unit. 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 UNT 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 UNT are equal to 403.8%.

Life of production assets of 12 years is the average useful life of capital assets used in Unit 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 UNT is equal to -7.5%. 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 - $1194 million for Unit - 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 51.83 million for Unit 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 Unit at the current share price and the inputted number of shares is $0.8 billion.

RELATED COMPANIES Price Int.Val. Rating
NFX Newfield Explo 25.19 1.19  str.sell
HP Helmerich&Payn 43.77 10.53  str.sell
QEP QEP Resources 7.09 9.95  hold
PTEN Patterson-UTI 15.53 3.42  str.sell
EGN Energen 48.08 8.16  str.sell
PES Pioneer Energy 1.80 0.99  str.sell
WLL Whiting Petrol 4.40 3.54  sell
PKD Parker Drillin 1.20 0.68  sell

COMPANY NEWS

▶ Unit beats 2Q profit forecasts   [Aug-03-17 09:46AM  Associated Press]
▶ 3 Stocks That Could Lose You a Lot of Money   [Jul-18-17 03:09PM  Motley Fool]
▶ Unit Corp. Value Analysis (NYSE:UNT) : July 5, 2017   [Jul-05-17 02:00PM  Capital Cube]
▶ Unit Corporation to Participate in Upcoming Conferences   [May-31-17 04:42PM  Business Wire]
▶ Unit misses 1Q profit forecasts   [May-04-17 09:16AM  Associated Press]
▶ 2 Stocks to Avoid (and 1 to Buy)   [Apr-25-17 12:00PM  Motley Fool]
▶ Conference-OGIS New York for Unit Corp.   [Mar-08-17 05:56PM  at Company Spotlight]
▶ Unit Corporation to Participate in Upcoming Conferences   [Feb-22-17 02:52PM  Business Wire]
▶ Do Hedge Funds Love Unit Corporation (UNT)?   [Dec-04-16 02:38PM  at Insider Monkey]
▶ Unit Corporation to Participate in Upcoming Conferences   [Nov-21-16 03:36PM  Business Wire]
▶ Oil patch is starting to heat up for investors   [Oct-04-16 12:57PM  at MarketWatch]
▶ How Risky Is Helmerich & Payne, Inc.?   [Sep-14-16 12:44PM  at Motley Fool]
▶ Here's Why Unit Corp. Shares Leapt 44% in April   [May-11-16 02:18PM  at Motley Fool]
▶ An Upgrade Sends Unit Corporation's Stock Soaring Today   [May-06-16 03:54PM  at Motley Fool]
Stock chart of UNT Financial statements of UNT
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.