Intrinsic value of Ur-Energy - URG

Previous Close

$0.65

  Intrinsic Value

$0.06

stock screener

  Rating & Target

str. sell

-90%

Previous close

$0.65

 
Intrinsic value

$0.06

 
Up/down potential

-90%

 
Rating

str. sell

We calculate the intrinsic value of URG 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, %
  -35.71
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  27
  28
  28
  29
  30
  31
  32
  33
  34
  35
  36
  38
  39
  41
  43
  45
  47
  49
  51
  53
  56
  58
  61
  64
  67
  70
  73
  77
  81
  84
  89
Variable operating expenses, $m
 
  29
  29
  30
  31
  32
  33
  34
  35
  36
  38
  39
  41
  43
  44
  46
  48
  50
  53
  55
  58
  60
  63
  66
  69
  73
  76
  80
  84
  88
  92
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
  27
  29
  29
  30
  31
  32
  33
  34
  35
  36
  38
  39
  41
  43
  44
  46
  48
  50
  53
  55
  58
  60
  63
  66
  69
  73
  76
  80
  84
  88
  92
Operating income, $m
  1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
EBITDA, $m
  6
  4
  4
  4
  4
  5
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  13
  13
Interest expense (income), $m
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  5
  5
  5
  5
  6
  6
  7
  7
  7
  8
  8
  9
  9
Earnings before tax, $m
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
Tax expense, $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
  0
Net income, $m
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2
  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
  90
  90
  92
  94
  97
  100
  103
  106
  110
  114
  119
  123
  128
  134
  139
  145
  152
  159
  166
  173
  181
  190
  198
  208
  218
  228
  239
  250
  262
  275
  288
Adjusted assets (=assets-cash), $m
  88
  90
  92
  94
  97
  100
  103
  106
  110
  114
  119
  123
  128
  134
  139
  145
  152
  159
  166
  173
  181
  190
  198
  208
  218
  228
  239
  250
  262
  275
  288
Revenue / Adjusted assets
  0.307
  0.311
  0.304
  0.309
  0.309
  0.310
  0.311
  0.311
  0.309
  0.307
  0.303
  0.309
  0.305
  0.306
  0.309
  0.310
  0.309
  0.308
  0.307
  0.306
  0.309
  0.305
  0.308
  0.308
  0.307
  0.307
  0.305
  0.308
  0.309
  0.305
  0.309
Average production assets, $m
  30
  31
  31
  32
  33
  34
  35
  36
  38
  39
  40
  42
  44
  46
  48
  50
  52
  54
  57
  59
  62
  65
  68
  71
  74
  78
  81
  85
  90
  94
  98
Working capital, $m
  -1
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  7
Total debt, $m
  24
  23
  24
  26
  27
  29
  31
  33
  35
  38
  40
  43
  46
  49
  52
  56
  60
  64
  68
  72
  77
  82
  87
  93
  99
  105
  111
  118
  125
  133
  140
Total liabilities, $m
  54
  53
  54
  56
  57
  59
  61
  63
  65
  68
  70
  73
  76
  79
  82
  86
  90
  94
  98
  102
  107
  112
  117
  123
  129
  135
  141
  148
  155
  163
  170
Total equity, $m
  36
  37
  38
  38
  40
  41
  42
  44
  45
  47
  49
  50
  53
  55
  57
  59
  62
  65
  68
  71
  74
  78
  81
  85
  89
  93
  98
  102
  107
  113
  118
Total liabilities and equity, $m
  90
  90
  92
  94
  97
  100
  103
  107
  110
  115
  119
  123
  129
  134
  139
  145
  152
  159
  166
  173
  181
  190
  198
  208
  218
  228
  239
  250
  262
  276
  288
Debt-to-equity ratio
  0.667
  0.630
  0.650
  0.670
  0.690
  0.710
  0.730
  0.760
  0.780
  0.800
  0.830
  0.850
  0.870
  0.900
  0.920
  0.940
  0.960
  0.980
  1.000
  1.020
  1.040
  1.060
  1.080
  1.090
  1.110
  1.120
  1.140
  1.150
  1.170
  1.180
  1.190
Adjusted equity ratio
  0.386
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
Depreciation, amort., depletion, $m
  5
  5
  5
  5
  6
  6
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  16
Funds from operations, $m
  1
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
Change in working capital, $m
  -2
  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 from operations, $m
  3
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
Maintenance CAPEX, $m
  0
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
New CAPEX, $m
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
Cash from investing activities, $m
  0
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -7
  -7
  -9
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -18
  -19
  -21
Free cash flow, $m
  3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -17
Issuance/(repayment) of debt, $m
  -9
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  6
  7
  7
  8
  8
Issuance/(repurchase) of shares, $m
  7
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  15
  15
  16
  17
  18
Cash from financing (excl. dividends), $m  
  -3
  4
  5
  5
  6
  6
  7
  7
  7
  7
  9
  9
  10
  10
  10
  12
  12
  13
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
Total cash flow (excl. dividends), $m
  0
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  6
  7
  7
  8
  8
  8
  9
  9
Retained Cash Flow (-), $m
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
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
 
  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
 
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
Discount rate, %
 
  6.80
  7.14
  7.50
  7.87
  8.27
  8.68
  9.11
  9.57
  10.05
  10.55
  11.08
  11.63
  12.21
  12.82
  13.46
  14.14
  14.84
  15.59
  16.37
  17.18
  18.04
  18.94
  19.89
  20.89
  21.93
  23.03
  24.18
  25.39
  26.66
  27.99
PV of cash for distribution, $m
 
  -2
  -2
  -2
  -2
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  96.6
  93.2
  89.8
  86.4
  83.0
  79.6
  76.2
  73.0
  69.7
  66.6
  63.5
  60.5
  57.6
  54.8
  52.0
  49.4
  46.9
  44.4
  42.1
  39.8
  37.7
  35.6
  33.7
  31.8
  30.0
  28.3
  26.7
  25.2
  23.7
  22.4

Ur-Energy Inc. is an exploration-stage mining company. The Company is engaged in uranium mining, recovery and processing activities, including the acquisition, exploration, development and operation of uranium mineral properties in the United States. Its flagship property is the Lost Creek Project in Sweetwater County, Wyoming. Its land portfolio includes over 10 projects in the United States. Approximately 10 of the United States projects are in the Great Divide Basin, Wyoming, including its flagship project, Lost Creek Project. It controls a total approximately 2,100 unpatented mining claims and over four State of Wyoming mineral leases for a total of approximately 42,000 acres in the area of the Lost Creek Property, including the Lost Creek permit area and certain adjoining properties, which refers to as LC East, LC West, LC North, LC South and EN project areas. Its Wyoming properties together total over 66,000 acres and include over two properties Shirley Basin and Lucky Mc.

FINANCIAL RATIOS  of  Ur-Energy (URG)

Valuation Ratios
P/E Ratio -31.1
Price to Sales 3.5
Price to Book 2.6
Price to Tangible Book
Price to Cash Flow 31.1
Price to Free Cash Flow 31.1
Growth Rates
Sales Growth Rate -35.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate -100%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 52.8%
Total Debt to Equity 66.7%
Interest Coverage -1
Management Effectiveness
Return On Assets -1.1%
Ret/ On Assets - 3 Yr. Avg. -2.4%
Return On Total Capital -4.8%
Ret/ On T. Cap. - 3 Yr. Avg. -6.1%
Return On Equity -8.7%
Return On Equity - 3 Yr. Avg. -12.4%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 40.7%
Gross Margin - 3 Yr. Avg. 36.5%
EBITDA Margin 14.8%
EBITDA Margin - 3 Yr. Avg. 11.2%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. -8.8%
Pre-Tax Margin -11.1%
Pre-Tax Margin - 3 Yr. Avg. -17.2%
Net Profit Margin -11.1%
Net Profit Margin - 3 Yr. Avg. -14.8%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 25%
Payout Ratio 0%

URG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the URG stock intrinsic value calculation we used $27 million for the last fiscal year's total revenue generated by Ur-Energy. The default revenue input number comes from 2016 income statement of Ur-Energy. 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 URG stock valuation model: a) initial revenue growth rate of 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 6.8%, whose default value for URG is calculated based on our internal credit rating of Ur-Energy, 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 Ur-Energy.
    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 URG stock the variable cost ratio is equal to 103.7%.

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 URG 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 7.1% for Ur-Energy.

Corporate tax rate of 27% is the nominal tax rate for Ur-Energy. 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 URG 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 URG are equal to 111.1%.

Life of production assets of 6 years is the average useful life of capital assets used in Ur-Energy 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 URG is equal to 7.4%. 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 - $36 million for Ur-Energy - 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 145.088 million for Ur-Energy 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 Ur-Energy at the current share price and the inputted number of shares is $0.1 billion.

RELATED COMPANIES Price Int.Val. Rating
DNN Denison Mines 0.480 0.08  str.sell

COMPANY NEWS

▶ Ur-Energy to Host Webcast and Teleconference Tomorrow   [Jan-18-18 10:49AM  PR Newswire]
▶ Why Uranium Stocks Are Glowing for Investors   [Dec-08-17 06:00AM  Investopedia]
▶ Ur-Energy Releases 2017 Q3 Results   [Oct-27-17 05:11PM  PR Newswire]
▶ Ur-Energy Releases 2017 Q3 Results   [05:11PM  CNW Group]
▶ Ur-Energy Provides 2017 Q3 Operational Results   [Oct-13-17 08:04AM  PR Newswire]
▶ Canadian Securities Exchange Launches CSE25 Index   [Sep-18-17 03:22PM  Newsfile]
▶ Ur-Energy Releases 2017 Q2 Results   [Jul-28-17 05:21PM  PR Newswire]
▶ Ur-Energy Releases 2017 Q2 Results   [05:21PM  CNW Group]
▶ Ur-Energy Provides 2017 Q2 Operational Results   [Jul-13-17 05:03PM  CNW Group]
▶ Ur-Energy Releases 2017 Q1 Results   [May-05-17 04:12PM  CNW Group]
▶ Ur-Energy Provides 2017 Q1 Operational Results   [Apr-13-17 08:18AM  PR Newswire]
▶ Ur-Energy Releases 2016 Year End Results   [Mar-03-17 05:36PM  PR Newswire]
▶ Why Uranium Wont Recover Anytime Soon (CCJ, UEC)   [Sep-19-16 04:26PM  at Investopedia]
▶ Ur-Energy to Host Webcast and Teleconference Tomorrow   [Aug-01-16 11:07AM  PR Newswire]
▶ Ur-Energy Provides 2016 Q2 Operational Results   [Jul-14-16 08:30AM  PR Newswire]
▶ Ur-Energy Confirms No Corporate Developments   [Jun-06-16 03:07PM  PR Newswire]
▶ Ur-Energy Provides 2016 Q1 Operational Results   [Apr-12-16 04:41PM  PR Newswire]
▶ Ur-Energy to Host Webcast and Teleconference   [Feb-29-16 11:51AM  PR Newswire]
▶ Ur-Energy Releases 2015 Year End Results   [05:44PM  PR Newswire]
▶ Ur-Energy Announces Bought Deal Financing   [08:22AM  PR Newswire]
Financial statements of URG
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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