Intrinsic value of Unit - UNT

Previous Close

$20.34

  Intrinsic Value

$5.35

stock screener

  Rating & Target

str. sell

-74%

Previous close

$20.34

 
Intrinsic value

$5.35

 
Up/down potential

-74%

 
Rating

str. sell

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 1.1

 

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
  23.90
  22.01
  20.31
  18.78
  17.40
  16.16
  15.04
  14.04
  13.14
  12.32
  11.59
  10.93
  10.34
  9.80
  9.32
  8.89
  8.50
  8.15
  7.84
  7.55
  7.30
  7.07
  6.86
  6.68
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
Revenue, $m
  602
  746
  910
  1,095
  1,300
  1,527
  1,773
  2,040
  2,327
  2,632
  2,957
  3,299
  3,660
  4,038
  4,434
  4,848
  5,279
  5,728
  6,195
  6,680
  7,185
  7,709
  8,254
  8,820
  9,409
  10,021
  10,658
  11,321
  12,012
  12,731
  13,481
Variable operating expenses, $m
 
  2,193
  2,674
  3,216
  3,819
  4,482
  5,205
  5,987
  6,827
  7,723
  8,674
  9,672
  10,730
  11,839
  13,000
  14,212
  15,475
  16,791
  18,160
  19,583
  21,062
  22,599
  24,196
  25,857
  27,582
  29,377
  31,245
  33,189
  35,213
  37,322
  39,520
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
  2,193
  2,674
  3,216
  3,819
  4,482
  5,205
  5,987
  6,827
  7,723
  8,674
  9,672
  10,730
  11,839
  13,000
  14,212
  15,475
  16,791
  18,160
  19,583
  21,062
  22,599
  24,196
  25,857
  27,582
  29,377
  31,245
  33,189
  35,213
  37,322
  39,520
Operating income, $m
  -144
  -1,447
  -1,764
  -2,121
  -2,518
  -2,955
  -3,432
  -3,947
  -4,500
  -5,091
  -5,717
  -6,373
  -7,070
  -7,800
  -8,565
  -9,364
  -10,196
  -11,063
  -11,965
  -12,903
  -13,877
  -14,890
  -15,943
  -17,036
  -18,174
  -19,356
  -20,587
  -21,867
  -23,201
  -24,591
  -26,039
EBITDA, $m
  64
  -1,190
  -1,452
  -1,746
  -2,074
  -2,435
  -2,829
  -3,254
  -3,711
  -4,199
  -4,716
  -5,263
  -5,838
  -6,441
  -7,073
  -7,732
  -8,420
  -9,136
  -9,881
  -10,655
  -11,460
  -12,296
  -13,165
  -14,068
  -15,007
  -15,984
  -17,000
  -18,058
  -19,159
  -20,307
  -21,503
Interest expense (income), $m
  36
  34
  46
  61
  77
  95
  115
  136
  160
  185
  211
  240
  270
  301
  335
  369
  405
  443
  482
  523
  566
  610
  656
  704
  753
  805
  858
  914
  972
  1,033
  1,096
Earnings before tax, $m
  -207
  -1,481
  -1,810
  -2,182
  -2,595
  -3,050
  -3,546
  -4,083
  -4,660
  -5,275
  -5,929
  -6,613
  -7,339
  -8,102
  -8,900
  -9,733
  -10,602
  -11,506
  -12,448
  -13,426
  -14,443
  -15,500
  -16,599
  -17,740
  -18,927
  -20,161
  -21,445
  -22,782
  -24,173
  -25,623
  -27,135
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
  -1,481
  -1,810
  -2,182
  -2,595
  -3,050
  -3,546
  -4,083
  -4,660
  -5,275
  -5,929
  -6,613
  -7,339
  -8,102
  -8,900
  -9,733
  -10,602
  -11,506
  -12,448
  -13,426
  -14,443
  -15,500
  -16,599
  -17,740
  -18,927
  -20,161
  -21,445
  -22,782
  -24,173
  -25,623
  -27,135

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
  3,069
  3,745
  4,506
  5,352
  6,283
  7,298
  8,396
  9,575
  10,833
  12,168
  13,578
  15,062
  16,619
  18,249
  19,950
  21,724
  23,571
  25,492
  27,490
  29,566
  31,724
  33,966
  36,297
  38,720
  41,239
  43,861
  46,590
  49,431
  52,392
  55,478
Adjusted assets (=assets-cash), $m
  2,478
  3,069
  3,745
  4,506
  5,352
  6,283
  7,298
  8,396
  9,575
  10,833
  12,168
  13,578
  15,062
  16,619
  18,249
  19,950
  21,724
  23,571
  25,492
  27,490
  29,566
  31,724
  33,966
  36,297
  38,720
  41,239
  43,861
  46,590
  49,431
  52,392
  55,478
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
  3,012
  3,675
  4,421
  5,251
  6,165
  7,161
  8,239
  9,395
  10,629
  11,939
  13,323
  14,779
  16,307
  17,906
  19,576
  21,316
  23,128
  25,014
  26,974
  29,012
  31,129
  33,329
  35,616
  37,993
  40,465
  43,038
  45,715
  48,503
  51,408
  54,436
Working capital, $m
  -44
  -56
  -68
  -82
  -98
  -115
  -133
  -153
  -175
  -197
  -222
  -247
  -275
  -303
  -333
  -364
  -396
  -430
  -465
  -501
  -539
  -578
  -619
  -662
  -706
  -752
  -799
  -849
  -901
  -955
  -1,011
Total debt, $m
  820
  1,128
  1,479
  1,873
  2,313
  2,796
  3,323
  3,893
  4,504
  5,157
  5,850
  6,582
  7,352
  8,160
  9,006
  9,889
  10,810
  11,768
  12,765
  13,802
  14,880
  16,000
  17,164
  18,373
  19,631
  20,938
  22,299
  23,715
  25,190
  26,726
  28,328
Total liabilities, $m
  1,285
  1,593
  1,944
  2,338
  2,778
  3,261
  3,788
  4,358
  4,969
  5,622
  6,315
  7,047
  7,817
  8,625
  9,471
  10,354
  11,275
  12,233
  13,230
  14,267
  15,345
  16,465
  17,629
  18,838
  20,096
  21,403
  22,764
  24,180
  25,655
  27,191
  28,793
Total equity, $m
  1,194
  1,476
  1,801
  2,167
  2,574
  3,022
  3,510
  4,039
  4,606
  5,211
  5,853
  6,531
  7,245
  7,994
  8,778
  9,596
  10,449
  11,338
  12,262
  13,223
  14,221
  15,259
  16,338
  17,459
  18,624
  19,836
  21,097
  22,410
  23,776
  25,200
  26,685
Total liabilities and equity, $m
  2,479
  3,069
  3,745
  4,505
  5,352
  6,283
  7,298
  8,397
  9,575
  10,833
  12,168
  13,578
  15,062
  16,619
  18,249
  19,950
  21,724
  23,571
  25,492
  27,490
  29,566
  31,724
  33,967
  36,297
  38,720
  41,239
  43,861
  46,590
  49,431
  52,391
  55,478
Debt-to-equity ratio
  0.687
  0.760
  0.820
  0.860
  0.900
  0.930
  0.950
  0.960
  0.980
  0.990
  1.000
  1.010
  1.010
  1.020
  1.030
  1.030
  1.030
  1.040
  1.040
  1.040
  1.050
  1.050
  1.050
  1.050
  1.050
  1.060
  1.060
  1.060
  1.060
  1.060
  1.060
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
  -1,481
  -1,810
  -2,182
  -2,595
  -3,050
  -3,546
  -4,083
  -4,660
  -5,275
  -5,929
  -6,613
  -7,339
  -8,102
  -8,900
  -9,733
  -10,602
  -11,506
  -12,448
  -13,426
  -14,443
  -15,500
  -16,599
  -17,740
  -18,927
  -20,161
  -21,445
  -22,782
  -24,173
  -25,623
  -27,135
Depreciation, amort., depletion, $m
  208
  257
  313
  375
  444
  520
  603
  693
  789
  892
  1,001
  1,110
  1,232
  1,359
  1,492
  1,631
  1,776
  1,927
  2,084
  2,248
  2,418
  2,594
  2,777
  2,968
  3,166
  3,372
  3,586
  3,810
  4,042
  4,284
  4,536
Funds from operations, $m
  274
  -1,223
  -1,498
  -1,807
  -2,151
  -2,530
  -2,943
  -3,391
  -3,871
  -4,383
  -4,928
  -5,503
  -6,108
  -6,743
  -7,408
  -8,102
  -8,825
  -9,579
  -10,363
  -11,178
  -12,026
  -12,906
  -13,821
  -14,772
  -15,761
  -16,789
  -17,859
  -18,972
  -20,131
  -21,339
  -22,599
Change in working capital, $m
  34
  -11
  -12
  -14
  -15
  -17
  -19
  -20
  -21
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -32
  -34
  -35
  -36
  -38
  -39
  -41
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -56
Cash from operations, $m
  240
  -1,213
  -1,485
  -1,793
  -2,136
  -2,513
  -2,925
  -3,371
  -3,849
  -4,360
  -4,903
  -5,477
  -6,081
  -6,715
  -7,378
  -8,071
  -8,793
  -9,545
  -10,328
  -11,142
  -11,988
  -12,867
  -13,780
  -14,730
  -15,717
  -16,743
  -17,811
  -18,922
  -20,080
  -21,285
  -22,542
Maintenance CAPEX, $m
  0
  -203
  -251
  -306
  -368
  -438
  -514
  -597
  -687
  -783
  -886
  -995
  -1,110
  -1,232
  -1,359
  -1,492
  -1,631
  -1,776
  -1,927
  -2,084
  -2,248
  -2,418
  -2,594
  -2,777
  -2,968
  -3,166
  -3,372
  -3,586
  -3,810
  -4,042
  -4,284
New CAPEX, $m
  -187
  -581
  -663
  -746
  -830
  -914
  -996
  -1,077
  -1,157
  -1,234
  -1,310
  -1,384
  -1,456
  -1,528
  -1,599
  -1,670
  -1,741
  -1,812
  -1,885
  -1,960
  -2,037
  -2,117
  -2,200
  -2,287
  -2,377
  -2,472
  -2,572
  -2,677
  -2,788
  -2,905
  -3,028
Cash from investing activities, $m
  -111
  -784
  -914
  -1,052
  -1,198
  -1,352
  -1,510
  -1,674
  -1,844
  -2,017
  -2,196
  -2,379
  -2,566
  -2,760
  -2,958
  -3,162
  -3,372
  -3,588
  -3,812
  -4,044
  -4,285
  -4,535
  -4,794
  -5,064
  -5,345
  -5,638
  -5,944
  -6,263
  -6,598
  -6,947
  -7,312
Free cash flow, $m
  129
  -1,996
  -2,399
  -2,846
  -3,334
  -3,864
  -4,435
  -5,045
  -5,693
  -6,378
  -7,099
  -7,856
  -8,647
  -9,474
  -10,336
  -11,232
  -12,165
  -13,134
  -14,141
  -15,187
  -16,273
  -17,402
  -18,574
  -19,794
  -21,062
  -22,382
  -23,755
  -25,186
  -26,677
  -28,232
  -29,854
Issuance/(repayment) of debt, $m
  -129
  308
  351
  395
  439
  483
  527
  570
  612
  653
  693
  732
  770
  808
  846
  883
  921
  959
  997
  1,037
  1,078
  1,120
  1,164
  1,210
  1,257
  1,308
  1,361
  1,416
  1,475
  1,536
  1,602
Issuance/(repurchase) of shares, $m
  0
  1,764
  2,135
  2,548
  3,002
  3,498
  4,035
  4,612
  5,227
  5,880
  6,571
  7,291
  8,053
  8,851
  9,683
  10,551
  11,455
  12,395
  13,372
  14,387
  15,442
  16,538
  17,677
  18,861
  20,092
  21,373
  22,706
  24,094
  25,540
  27,047
  28,619
Cash from financing (excl. dividends), $m  
  -129
  2,072
  2,486
  2,943
  3,441
  3,981
  4,562
  5,182
  5,839
  6,533
  7,264
  8,023
  8,823
  9,659
  10,529
  11,434
  12,376
  13,354
  14,369
  15,424
  16,520
  17,658
  18,841
  20,071
  21,349
  22,681
  24,067
  25,510
  27,015
  28,583
  30,221
Total cash flow (excl. dividends), $m
  0
  76
  87
  97
  107
  117
  127
  137
  146
  156
  165
  167
  176
  185
  194
  202
  211
  219
  228
  237
  247
  256
  266
  277
  288
  299
  311
  324
  337
  352
  366
Retained Cash Flow (-), $m
  120
  -1,764
  -2,135
  -2,548
  -3,002
  -3,498
  -4,035
  -4,612
  -5,227
  -5,880
  -6,571
  -7,291
  -8,053
  -8,851
  -9,683
  -10,551
  -11,455
  -12,395
  -13,372
  -14,387
  -15,442
  -16,538
  -17,677
  -18,861
  -20,092
  -21,373
  -22,706
  -24,094
  -25,540
  -27,047
  -28,619
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
 
  -1,687
  -2,049
  -2,451
  -2,895
  -3,381
  -3,908
  -4,475
  -5,081
  -5,725
  -6,406
  -7,124
  -7,877
  -8,666
  -9,490
  -10,349
  -11,244
  -12,175
  -13,144
  -14,150
  -15,195
  -16,282
  -17,411
  -18,584
  -19,805
  -21,074
  -22,395
  -23,770
  -25,203
  -26,696
  -28,253
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
 
  -1,578
  -1,781
  -1,967
  -2,129
  -2,260
  -2,355
  -2,409
  -2,421
  -2,390
  -2,317
  -2,207
  -2,065
  -1,898
  -1,712
  -1,516
  -1,317
  -1,121
  -935
  -764
  -611
  -477
  -364
  -271
  -196
  -139
  -95
  -64
  -41
  -26
  -16
Current shareholders' claim on cash, %
  100
  37.9
  14.5
  5.7
  2.2
  0.9
  0.4
  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
  0.0

Unit Corporation is an oil and natural gas contract drilling company. The Company has operations in the exploration and production and mid-stream areas. The Company operates through three segments: Oil and Natural Gas, Contract Drilling and Mid-Stream. It is primarily engaged in the exploration, development, acquisition, and production of oil and natural gas properties, the land contract drilling of natural gas and oil wells, and the buying, selling, gathering, processing and treating of natural gas. Its Oil and Natural Gas operations are carried out by its subsidiary Unit Petroleum Company. Contract Drilling operations are carried out by its subsidiary Unit Drilling Company. Its drills onshore oil and natural gas wells for its own account, as well as for other oil and natural gas companies. Its Mid-Stream operations are carried out by its subsidiary Superior Pipeline Company, L.L.C. Its mid-stream operations consist of buying, selling, gathering, processing and treating natural gas.

FINANCIAL RATIOS  of  Unit (UNT)

Valuation Ratios
P/E Ratio -7.7
Price to Sales 1.7
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 4.4
Price to Free Cash Flow 19.8
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 42.5%
Gross Margin - 3 Yr. Avg. 21.7%
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 23.9% 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 52.887 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 $1.1 billion.

RELATED COMPANIES Price Int.Val. Rating
NFX Newfield Explo 30.24 1.18  str.sell
HP Helmerich&Payn 58.81 17.27  str.sell
QEP QEP Resources 9.08 3.64  str.sell
PTEN Patterson-UTI 21.92 2.63  str.sell
EGN Energen 54.64 8.03  str.sell
PES Pioneer Energy 2.25 0.90  str.sell
WLL Whiting Petrol 23.64 3.49  sell
PKD Parker Drillin 0.910 0.60  sell

COMPANY NEWS

▶ Unit Corporation to Participate in Upcoming Conferences   [Nov-29-17 04:55PM  Business Wire]
▶ Unit Corporation Announces Newly Appointed Officer   [Nov-27-17 09:50AM  Business Wire]
▶ Stocks Flashing Renewed Technical Strength: Unit   [Nov-13-17 03:00AM  Investor's Business Daily]
▶ Unit Shows Improved Relative Strength; Still Shy Of Benchmark   [Nov-10-17 03:00AM  Investor's Business Daily]
▶ Unit misses 3Q profit forecasts   [Nov-02-17 08:37AM  Associated Press]
▶ Unit Corp. Value Analysis (NYSE:UNT) : October 23, 2017   [Oct-23-17 11:49AM  Capital Cube]
▶ ETFs with exposure to Unit Corp. : October 18, 2017   [Oct-18-17 10:03AM  Capital Cube]
▶ ETFs with exposure to Unit Corp. : September 28, 2017   [Sep-28-17 10:20AM  Capital Cube]
▶ Arnold Van Den Berg: Bullish on Oil and Gas   [Sep-25-17 06:20PM  GuruFocus.com]
▶ ETFs with exposure to Unit Corp. : September 7, 2017   [Sep-07-17 02:06PM  Capital Cube]
▶ Unit Corporation Announces Management Promotions   [Aug-29-17 03:00PM  Business Wire]
▶ 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]
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.