Intrinsic value of United Rentals - URI

Previous Close

$144.40

  Intrinsic Value

$156.70

stock screener

  Rating & Target

hold

+9%

  Value-price divergence*

+25%

Previous close

$144.40

 
Intrinsic value

$156.70

 
Up/down potential

+9%

 
Rating

hold

 
Value-price divergence*

+25%

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

We calculate the intrinsic value of URI 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 12.2

 

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, %
  -0.95
  12.40
  11.66
  10.99
  10.39
  9.86
  9.37
  8.93
  8.54
  8.19
  7.87
  7.58
  7.32
  7.09
  6.88
  6.69
  6.52
  6.37
  6.23
  6.11
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
Revenue, $m
  5,762
  6,476
  7,232
  8,027
  8,861
  9,734
  10,646
  11,597
  12,588
  13,618
  14,689
  15,803
  16,960
  18,162
  19,412
  20,711
  22,063
  23,468
  24,931
  26,455
  28,042
  29,696
  31,422
  33,222
  35,101
  37,063
  39,113
  41,256
  43,496
  45,839
  48,291
Variable operating expenses, $m
 
  4,746
  5,261
  5,804
  6,373
  6,969
  7,591
  8,240
  8,916
  9,619
  10,350
  10,784
  11,574
  12,394
  13,247
  14,134
  15,056
  16,015
  17,014
  18,053
  19,136
  20,265
  21,443
  22,671
  23,953
  25,293
  26,692
  28,154
  29,683
  31,282
  32,955
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
  4,347
  4,746
  5,261
  5,804
  6,373
  6,969
  7,591
  8,240
  8,916
  9,619
  10,350
  10,784
  11,574
  12,394
  13,247
  14,134
  15,056
  16,015
  17,014
  18,053
  19,136
  20,265
  21,443
  22,671
  23,953
  25,293
  26,692
  28,154
  29,683
  31,282
  32,955
Operating income, $m
  1,415
  1,731
  1,971
  2,223
  2,488
  2,765
  3,055
  3,357
  3,672
  3,999
  4,339
  5,019
  5,386
  5,768
  6,165
  6,577
  7,007
  7,453
  7,918
  8,401
  8,906
  9,431
  9,979
  10,550
  11,147
  11,770
  12,421
  13,102
  13,813
  14,557
  15,336
EBITDA, $m
  2,660
  3,031
  3,384
  3,756
  4,146
  4,555
  4,982
  5,427
  5,890
  6,372
  6,874
  7,395
  7,936
  8,499
  9,083
  9,691
  10,324
  10,981
  11,666
  12,379
  13,122
  13,896
  14,703
  15,545
  16,425
  17,343
  18,302
  19,305
  20,353
  21,449
  22,597
Interest expense (income), $m
  415
  389
  454
  523
  595
  670
  749
  832
  918
  1,008
  1,101
  1,198
  1,299
  1,404
  1,513
  1,626
  1,744
  1,866
  1,994
  2,126
  2,264
  2,408
  2,558
  2,714
  2,877
  3,048
  3,225
  3,411
  3,605
  3,808
  4,021
Earnings before tax, $m
  909
  1,342
  1,516
  1,700
  1,893
  2,095
  2,306
  2,525
  2,753
  2,991
  3,238
  3,820
  4,087
  4,364
  4,652
  4,951
  5,263
  5,587
  5,924
  6,275
  6,641
  7,023
  7,421
  7,836
  8,270
  8,723
  9,196
  9,691
  10,208
  10,749
  11,315
Tax expense, $m
  343
  362
  409
  459
  511
  566
  623
  682
  743
  808
  874
  1,031
  1,103
  1,178
  1,256
  1,337
  1,421
  1,508
  1,599
  1,694
  1,793
  1,896
  2,004
  2,116
  2,233
  2,355
  2,483
  2,616
  2,756
  2,902
  3,055
Net income, $m
  566
  980
  1,107
  1,241
  1,382
  1,529
  1,683
  1,843
  2,010
  2,183
  2,364
  2,789
  2,983
  3,186
  3,396
  3,614
  3,842
  4,078
  4,324
  4,581
  4,848
  5,127
  5,417
  5,720
  6,037
  6,368
  6,713
  7,074
  7,452
  7,847
  8,260

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  312
  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
  11,988
  13,137
  14,669
  16,281
  17,974
  19,745
  21,595
  23,524
  25,533
  27,623
  29,796
  32,055
  34,402
  36,841
  39,376
  42,011
  44,752
  47,603
  50,571
  53,661
  56,880
  60,236
  63,736
  67,387
  71,198
  75,178
  79,337
  83,683
  88,227
  92,980
  97,953
Adjusted assets (=assets-cash), $m
  11,676
  13,137
  14,669
  16,281
  17,974
  19,745
  21,595
  23,524
  25,533
  27,623
  29,796
  32,055
  34,402
  36,841
  39,376
  42,011
  44,752
  47,603
  50,571
  53,661
  56,880
  60,236
  63,736
  67,387
  71,198
  75,178
  79,337
  83,683
  88,227
  92,980
  97,953
Revenue / Adjusted assets
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
  0.493
Average production assets, $m
  7,449
  8,374
  9,351
  10,379
  11,457
  12,586
  13,766
  14,995
  16,276
  17,608
  18,993
  20,433
  21,929
  23,484
  25,100
  26,780
  28,527
  30,344
  32,236
  34,206
  36,258
  38,397
  40,628
  42,956
  45,385
  47,922
  50,573
  53,343
  56,240
  59,270
  62,440
Working capital, $m
  177
  518
  579
  642
  709
  779
  852
  928
  1,007
  1,089
  1,175
  1,264
  1,357
  1,453
  1,553
  1,657
  1,765
  1,877
  1,995
  2,116
  2,243
  2,376
  2,514
  2,658
  2,808
  2,965
  3,129
  3,300
  3,480
  3,667
  3,863
Total debt, $m
  7,790
  8,735
  10,050
  11,436
  12,889
  14,411
  16,000
  17,657
  19,383
  21,178
  23,045
  24,985
  27,001
  29,096
  31,274
  33,538
  35,892
  38,341
  40,890
  43,545
  46,310
  49,193
  52,199
  55,335
  58,609
  62,028
  65,600
  69,333
  73,237
  77,320
  81,592
Total liabilities, $m
  10,340
  11,285
  12,600
  13,986
  15,439
  16,961
  18,550
  20,207
  21,933
  23,728
  25,595
  27,535
  29,551
  31,646
  33,824
  36,088
  38,442
  40,891
  43,440
  46,095
  48,860
  51,743
  54,749
  57,885
  61,159
  64,578
  68,150
  71,883
  75,787
  79,870
  84,142
Total equity, $m
  1,648
  1,852
  2,068
  2,296
  2,534
  2,784
  3,045
  3,317
  3,600
  3,895
  4,201
  4,520
  4,851
  5,195
  5,552
  5,924
  6,310
  6,712
  7,130
  7,566
  8,020
  8,493
  8,987
  9,502
  10,039
  10,600
  11,186
  11,799
  12,440
  13,110
  13,811
Total liabilities and equity, $m
  11,988
  13,137
  14,668
  16,282
  17,973
  19,745
  21,595
  23,524
  25,533
  27,623
  29,796
  32,055
  34,402
  36,841
  39,376
  42,012
  44,752
  47,603
  50,570
  53,661
  56,880
  60,236
  63,736
  67,387
  71,198
  75,178
  79,336
  83,682
  88,227
  92,980
  97,953
Debt-to-equity ratio
  4.727
  4.720
  4.860
  4.980
  5.090
  5.180
  5.250
  5.320
  5.380
  5.440
  5.490
  5.530
  5.570
  5.600
  5.630
  5.660
  5.690
  5.710
  5.730
  5.760
  5.770
  5.790
  5.810
  5.820
  5.840
  5.850
  5.860
  5.880
  5.890
  5.900
  5.910
Adjusted equity ratio
  0.114
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  566
  980
  1,107
  1,241
  1,382
  1,529
  1,683
  1,843
  2,010
  2,183
  2,364
  2,789
  2,983
  3,186
  3,396
  3,614
  3,842
  4,078
  4,324
  4,581
  4,848
  5,127
  5,417
  5,720
  6,037
  6,368
  6,713
  7,074
  7,452
  7,847
  8,260
Depreciation, amort., depletion, $m
  1,245
  1,300
  1,413
  1,533
  1,658
  1,790
  1,927
  2,070
  2,219
  2,373
  2,535
  2,376
  2,550
  2,731
  2,919
  3,114
  3,317
  3,528
  3,748
  3,977
  4,216
  4,465
  4,724
  4,995
  5,277
  5,572
  5,881
  6,203
  6,540
  6,892
  7,260
Funds from operations, $m
  2,069
  2,279
  2,520
  2,774
  3,040
  3,319
  3,610
  3,913
  4,229
  4,557
  4,898
  5,165
  5,533
  5,916
  6,314
  6,728
  7,159
  7,607
  8,073
  8,558
  9,064
  9,591
  10,141
  10,715
  11,314
  11,940
  12,594
  13,277
  13,991
  14,739
  15,521
Change in working capital, $m
  116
  57
  60
  64
  67
  70
  73
  76
  79
  82
  86
  89
  93
  96
  100
  104
  108
  112
  117
  122
  127
  132
  138
  144
  150
  157
  164
  171
  179
  187
  196
Cash from operations, $m
  1,953
  2,222
  2,460
  2,711
  2,974
  3,249
  3,537
  3,837
  4,149
  4,474
  4,812
  5,076
  5,441
  5,820
  6,215
  6,624
  7,051
  7,494
  7,956
  8,436
  8,937
  9,459
  10,003
  10,571
  11,164
  11,783
  12,430
  13,105
  13,812
  14,551
  15,325
Maintenance CAPEX, $m
  0
  -866
  -974
  -1,087
  -1,207
  -1,332
  -1,464
  -1,601
  -1,744
  -1,893
  -2,047
  -2,209
  -2,376
  -2,550
  -2,731
  -2,919
  -3,114
  -3,317
  -3,528
  -3,748
  -3,977
  -4,216
  -4,465
  -4,724
  -4,995
  -5,277
  -5,572
  -5,881
  -6,203
  -6,540
  -6,892
New CAPEX, $m
  -1,339
  -926
  -976
  -1,028
  -1,079
  -1,129
  -1,179
  -1,230
  -1,281
  -1,332
  -1,385
  -1,440
  -1,496
  -1,555
  -1,616
  -1,680
  -1,747
  -1,818
  -1,892
  -1,970
  -2,052
  -2,139
  -2,231
  -2,327
  -2,430
  -2,537
  -2,651
  -2,770
  -2,897
  -3,030
  -3,170
Cash from investing activities, $m
  -859
  -1,792
  -1,950
  -2,115
  -2,286
  -2,461
  -2,643
  -2,831
  -3,025
  -3,225
  -3,432
  -3,649
  -3,872
  -4,105
  -4,347
  -4,599
  -4,861
  -5,135
  -5,420
  -5,718
  -6,029
  -6,355
  -6,696
  -7,051
  -7,425
  -7,814
  -8,223
  -8,651
  -9,100
  -9,570
  -10,062
Free cash flow, $m
  1,094
  430
  510
  595
  688
  788
  894
  1,007
  1,125
  1,250
  1,380
  1,427
  1,569
  1,715
  1,868
  2,026
  2,190
  2,360
  2,536
  2,718
  2,907
  3,104
  3,308
  3,520
  3,740
  3,968
  4,207
  4,454
  4,713
  4,982
  5,263
Issuance/(repayment) of debt, $m
  -471
  1,257
  1,316
  1,385
  1,454
  1,522
  1,589
  1,657
  1,726
  1,795
  1,867
  1,940
  2,016
  2,095
  2,178
  2,264
  2,354
  2,449
  2,549
  2,654
  2,766
  2,883
  3,006
  3,136
  3,274
  3,419
  3,572
  3,733
  3,903
  4,083
  4,272
Issuance/(repurchase) of shares, $m
  -527
  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 financing (excl. dividends), $m  
  -964
  1,257
  1,316
  1,385
  1,454
  1,522
  1,589
  1,657
  1,726
  1,795
  1,867
  1,940
  2,016
  2,095
  2,178
  2,264
  2,354
  2,449
  2,549
  2,654
  2,766
  2,883
  3,006
  3,136
  3,274
  3,419
  3,572
  3,733
  3,903
  4,083
  4,272
Total cash flow (excl. dividends), $m
  133
  1,687
  1,825
  1,981
  2,142
  2,309
  2,483
  2,664
  2,851
  3,045
  3,246
  3,368
  3,585
  3,811
  4,045
  4,290
  4,544
  4,809
  5,085
  5,373
  5,673
  5,986
  6,314
  6,656
  7,013
  7,387
  7,779
  8,188
  8,616
  9,065
  9,535
Retained Cash Flow (-), $m
  -172
  -204
  -216
  -227
  -239
  -250
  -261
  -272
  -283
  -295
  -306
  -318
  -331
  -344
  -357
  -372
  -386
  -402
  -418
  -436
  -454
  -473
  -493
  -515
  -537
  -561
  -586
  -613
  -641
  -670
  -701
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
 
  1,483
  1,609
  1,753
  1,903
  2,060
  2,222
  2,392
  2,567
  2,750
  2,940
  3,049
  3,254
  3,467
  3,688
  3,918
  4,158
  4,407
  4,666
  4,937
  5,219
  5,513
  5,820
  6,141
  6,476
  6,826
  7,192
  7,575
  7,975
  8,395
  8,833
Discount rate, %
 
  10.30
  10.82
  11.36
  11.92
  12.52
  13.15
  13.80
  14.49
  15.22
  15.98
  16.78
  17.62
  18.50
  19.42
  20.39
  21.41
  22.48
  23.61
  24.79
  26.03
  27.33
  28.70
  30.13
  31.64
  33.22
  34.88
  36.62
  38.45
  40.38
  42.40
PV of cash for distribution, $m
 
  1,344
  1,311
  1,270
  1,213
  1,142
  1,059
  967
  869
  769
  668
  554
  464
  382
  307
  242
  186
  140
  103
  73
  51
  35
  23
  14
  9
  5
  3
  2
  1
  0
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

United Rentals, Inc. is a holding company. The Company is an equipment rental company, which operates throughout the United States and Canada. It operates through two segments: general rentals, and trench, power and pump. The general rentals segment includes the rental of construction, aerial, industrial and homeowner equipment and related services and activities. The trench, power and pump segment includes the rental of specialty construction products and related services. Its general rentals segment includes the rental of general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts and material handling equipment; aerial work platforms, such as boom lifts and scissor lifts, and general tools and light equipment, such as pressure washers, water pumps and power tools. As of January 1, 2017, it operated 887 rental locations. The Company conducts its operations through its subsidiary, United Rentals (North America), Inc. (URNA) and subsidiaries of URNA.

FINANCIAL RATIOS  of  United Rentals (URI)

Valuation Ratios
P/E Ratio 21.5
Price to Sales 2.1
Price to Book 7.4
Price to Tangible Book
Price to Cash Flow 6.2
Price to Free Cash Flow 19.8
Growth Rates
Sales Growth Rate -0.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -18.2%
Cap. Spend. - 3 Yr. Gr. Rate -4.5%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 436.5%
Total Debt to Equity 472.7%
Interest Coverage 3
Management Effectiveness
Return On Assets 6.8%
Ret/ On Assets - 3 Yr. Avg. 7%
Return On Total Capital 5.9%
Ret/ On T. Cap. - 3 Yr. Avg. 5.9%
Return On Equity 36.2%
Return On Equity - 3 Yr. Avg. 33.9%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 41.7%
Gross Margin - 3 Yr. Avg. 42.4%
EBITDA Margin 44.6%
EBITDA Margin - 3 Yr. Avg. 44.7%
Operating Margin 24.6%
Oper. Margin - 3 Yr. Avg. 25%
Pre-Tax Margin 15.8%
Pre-Tax Margin - 3 Yr. Avg. 15.8%
Net Profit Margin 9.8%
Net Profit Margin - 3 Yr. Avg. 9.8%
Effective Tax Rate 37.7%
Eff/ Tax Rate - 3 Yr. Avg. 37.8%
Payout Ratio 0%

URI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the URI stock intrinsic value calculation we used $5762 million for the last fiscal year's total revenue generated by United Rentals. The default revenue input number comes from 2016 income statement of United Rentals. 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 URI stock valuation model: a) initial revenue growth rate of 12.4% 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 10.3%, whose default value for URI is calculated based on our internal credit rating of United Rentals, 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 United Rentals.
    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 URI stock the variable cost ratio is equal to 73.9%.

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 URI 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 5.2% for United Rentals.

Corporate tax rate of 27% is the nominal tax rate for United Rentals. 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 URI 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 URI are equal to 129.3%.

Life of production assets of 8.6 years is the average useful life of capital assets used in United Rentals 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 URI is equal to 8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1648 million for United Rentals - 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 84.281 million for United Rentals 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 United Rentals at the current share price and the inputted number of shares is $12.2 billion.

RELATED COMPANIES Price Int.Val. Rating
HEES H&E Equipment 29.10 10.09  str.sell
NEFF Neff Cl A 25.00 3.80  str.sell
HRI Herc Holdings 48.46 18.02  str.sell

COMPANY NEWS

▶ Top Ranked Value Stocks to Buy for October 20th   [Oct-20-17 09:25AM  Zacks]
▶ United Rentals May Take a Rest Before Further Gains   [Oct-19-17 01:13PM  TheStreet.com]
▶ United Airlines, AmEx, United Rentals Beat Views; Alcoa Misses   [Oct-18-17 06:27PM  Investor's Business Daily]
▶ United Rentals tops Street 3Q forecasts   [04:28PM  Associated Press]
▶ Machinery: Buy Caterpillar, United Rentals; Skip Paccar   [Oct-11-17 09:47AM  Barrons.com]
▶ United Rentals Trading Near Top Of Buy Zone With Earnings On Deck   [Oct-03-17 03:00AM  Investor's Business Daily]
▶ Hurricane Harvey Reconstruction Needs May Lift This Equipment Stock   [Sep-05-17 01:36PM  Investor's Business Daily]
▶ United Rentals Trying To Close In On Key Technical Measure   [03:00AM  Investor's Business Daily]
▶ The Hot Stock: United Rentals Gains 3.8%   [Aug-29-17 04:36PM  Barrons.com]
▶ 2 Stocks Fall on Earnings Report   [03:26PM  GuruFocus.com]
▶ United Rentals Releases Corporate Responsibility Report   [Aug-28-17 04:35PM  Business Wire]
▶ JETS Tumbles, Blame it on the Hedge Funds?   [Aug-23-17 04:13PM  Barrons.com]
▶ If You Believe Trump, Here are 2 Stocks to Own   [Aug-19-17 06:35AM  Motley Fool]
▶ Wal-Mart Stores, L Brands and Cisco Systems skid   [Aug-17-17 04:30PM  Associated Press]
▶ United Rentals: It Remains to Be Seen   [11:35AM  Barrons.com]
▶ United Rentals to Acquire Neff Corporation   [10:46PM  Business Wire]
▶ 2 Stocks That Will Thrive as We Rebuild America   [Aug-14-17 07:02PM  InvestorPlace]
▶ United Rentals: Cramer's Top Takeaways   [06:36AM  TheStreet.com]
▶ PEG Ratio vs. the P/E Ratio   [Jul-25-17 02:32PM  Zacks]
▶ United Rentals beats Street 2Q forecasts   [Jul-19-17 09:23PM  Associated Press]
▶ American Express, United Rentals Beat; Alcoa Warns On Costs   [06:23PM  Investor's Business Daily]
▶ Sell the Bounce in United Rentals   [Jun-29-17 01:40PM  TheStreet.com]
▶ The Biggest Loser: United Rentals Slides 6.1%   [Jun-14-17 05:04PM  Barrons.com]
▶ Here Are Mario Gabellis Top Infrastructure Bets   [May-26-17 07:37AM  Market Realist]
▶ ETFs with exposure to United Rentals, Inc. : May 18, 2017   [May-18-17 02:05PM  Capital Cube]
Financial statements of URI
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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