Intrinsic value of United Rentals - URI

Previous Close

$163.65

  Intrinsic Value

$193.42

stock screener

  Rating & Target

hold

+18%

Previous close

$163.65

 
Intrinsic value

$193.42

 
Up/down potential

+18%

 
Rating

hold

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 13.8

 

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, %
  -0.95
  17.10
  15.89
  14.80
  13.82
  12.94
  12.14
  11.43
  10.79
  10.21
  9.69
  9.22
  8.80
  8.42
  8.08
  7.77
  7.49
  7.24
  7.02
  6.82
  6.63
  6.47
  6.32
  6.19
  6.07
  5.97
  5.87
  5.78
  5.70
  5.63
  5.57
Revenue, $m
  5,762
  6,747
  7,819
  8,977
  10,217
  11,540
  12,941
  14,420
  15,976
  17,607
  19,312
  21,093
  22,948
  24,880
  26,889
  28,978
  31,149
  33,405
  35,749
  38,186
  40,719
  43,354
  46,096
  48,950
  51,922
  55,019
  58,248
  61,616
  65,130
  68,799
  72,632
Variable operating expenses, $m
 
  4,931
  5,662
  6,452
  7,299
  8,201
  9,157
  10,167
  11,228
  12,341
  13,505
  14,394
  15,660
  16,979
  18,350
  19,775
  21,257
  22,796
  24,396
  26,059
  27,788
  29,586
  31,457
  33,404
  35,433
  37,546
  39,750
  42,048
  44,446
  46,950
  49,565
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
  4,931
  5,662
  6,452
  7,299
  8,201
  9,157
  10,167
  11,228
  12,341
  13,505
  14,394
  15,660
  16,979
  18,350
  19,775
  21,257
  22,796
  24,396
  26,059
  27,788
  29,586
  31,457
  33,404
  35,433
  37,546
  39,750
  42,048
  44,446
  46,950
  49,565
Operating income, $m
  1,415
  1,817
  2,157
  2,525
  2,919
  3,339
  3,784
  4,254
  4,748
  5,265
  5,807
  6,699
  7,288
  7,901
  8,539
  9,203
  9,892
  10,609
  11,353
  12,127
  12,931
  13,768
  14,639
  15,545
  16,489
  17,473
  18,498
  19,568
  20,684
  21,849
  23,066
EBITDA, $m
  2,660
  3,157
  3,659
  4,200
  4,781
  5,400
  6,055
  6,748
  7,475
  8,239
  9,037
  9,870
  10,738
  11,642
  12,582
  13,560
  14,575
  15,631
  16,728
  17,868
  19,054
  20,286
  21,569
  22,905
  24,296
  25,745
  27,256
  28,832
  30,476
  32,193
  33,986
Interest expense (income), $m
  415
  389
  479
  576
  681
  793
  913
  1,040
  1,174
  1,315
  1,463
  1,617
  1,778
  1,947
  2,122
  2,304
  2,493
  2,690
  2,894
  3,106
  3,327
  3,557
  3,795
  4,044
  4,302
  4,572
  4,852
  5,145
  5,450
  5,769
  6,101
Earnings before tax, $m
  909
  1,428
  1,679
  1,949
  2,238
  2,546
  2,871
  3,214
  3,574
  3,951
  4,345
  5,081
  5,509
  5,955
  6,418
  6,899
  7,399
  7,919
  8,459
  9,020
  9,604
  10,212
  10,843
  11,501
  12,187
  12,901
  13,646
  14,423
  15,234
  16,081
  16,965
Tax expense, $m
  343
  386
  453
  526
  604
  687
  775
  868
  965
  1,067
  1,173
  1,372
  1,488
  1,608
  1,733
  1,863
  1,998
  2,138
  2,284
  2,436
  2,593
  2,757
  2,928
  3,105
  3,290
  3,483
  3,684
  3,894
  4,113
  4,342
  4,581
Net income, $m
  566
  1,042
  1,225
  1,423
  1,634
  1,858
  2,096
  2,346
  2,609
  2,884
  3,172
  3,709
  4,022
  4,347
  4,685
  5,036
  5,401
  5,781
  6,175
  6,585
  7,011
  7,454
  7,916
  8,396
  8,896
  9,418
  9,962
  10,529
  11,121
  11,739
  12,385

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
  13,686
  15,861
  18,209
  20,725
  23,407
  26,249
  29,250
  32,405
  35,713
  39,173
  42,784
  46,548
  50,466
  54,542
  58,779
  63,182
  67,758
  72,513
  77,456
  82,594
  87,939
  93,500
  99,290
  105,319
  111,601
  118,151
  124,982
  132,110
  139,553
  147,326
Adjusted assets (=assets-cash), $m
  11,676
  13,686
  15,861
  18,209
  20,725
  23,407
  26,249
  29,250
  32,405
  35,713
  39,173
  42,784
  46,548
  50,466
  54,542
  58,779
  63,182
  67,758
  72,513
  77,456
  82,594
  87,939
  93,500
  99,290
  105,319
  111,601
  118,151
  124,982
  132,110
  139,553
  147,326
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
  8,724
  10,111
  11,607
  13,211
  14,921
  16,733
  18,645
  20,657
  22,765
  24,971
  27,273
  29,672
  32,170
  34,768
  37,468
  40,275
  43,192
  46,223
  49,374
  52,650
  56,057
  59,602
  63,292
  67,135
  71,140
  75,315
  79,670
  84,214
  88,958
  93,913
Working capital, $m
  177
  540
  626
  718
  817
  923
  1,035
  1,154
  1,278
  1,409
  1,545
  1,687
  1,836
  1,990
  2,151
  2,318
  2,492
  2,672
  2,860
  3,055
  3,258
  3,468
  3,688
  3,916
  4,154
  4,402
  4,660
  4,929
  5,210
  5,504
  5,811
Total debt, $m
  7,790
  9,206
  11,075
  13,091
  15,253
  17,556
  19,998
  22,576
  25,286
  28,128
  31,100
  34,202
  37,435
  40,801
  44,301
  47,941
  51,723
  55,654
  59,739
  63,984
  68,399
  72,990
  77,767
  82,740
  87,919
  93,315
  98,942
  104,810
  110,933
  117,326
  124,003
Total liabilities, $m
  10,340
  11,756
  13,625
  15,641
  17,803
  20,106
  22,548
  25,126
  27,836
  30,678
  33,650
  36,752
  39,985
  43,351
  46,851
  50,491
  54,273
  58,204
  62,289
  66,534
  70,949
  75,540
  80,317
  85,290
  90,469
  95,865
  101,492
  107,360
  113,483
  119,876
  126,553
Total equity, $m
  1,648
  1,930
  2,236
  2,567
  2,922
  3,300
  3,701
  4,124
  4,569
  5,036
  5,523
  6,033
  6,563
  7,116
  7,690
  8,288
  8,909
  9,554
  10,224
  10,921
  11,646
  12,399
  13,184
  14,000
  14,850
  15,736
  16,659
  17,622
  18,628
  19,677
  20,773
Total liabilities and equity, $m
  11,988
  13,686
  15,861
  18,208
  20,725
  23,406
  26,249
  29,250
  32,405
  35,714
  39,173
  42,785
  46,548
  50,467
  54,541
  58,779
  63,182
  67,758
  72,513
  77,455
  82,595
  87,939
  93,501
  99,290
  105,319
  111,601
  118,151
  124,982
  132,111
  139,553
  147,326
Debt-to-equity ratio
  4.727
  4.770
  4.950
  5.100
  5.220
  5.320
  5.400
  5.470
  5.530
  5.590
  5.630
  5.670
  5.700
  5.730
  5.760
  5.780
  5.810
  5.830
  5.840
  5.860
  5.870
  5.890
  5.900
  5.910
  5.920
  5.930
  5.940
  5.950
  5.960
  5.960
  5.970
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
  1,042
  1,225
  1,423
  1,634
  1,858
  2,096
  2,346
  2,609
  2,884
  3,172
  3,709
  4,022
  4,347
  4,685
  5,036
  5,401
  5,781
  6,175
  6,585
  7,011
  7,454
  7,916
  8,396
  8,896
  9,418
  9,962
  10,529
  11,121
  11,739
  12,385
Depreciation, amort., depletion, $m
  1,245
  1,340
  1,502
  1,676
  1,862
  2,061
  2,272
  2,494
  2,728
  2,973
  3,230
  3,171
  3,450
  3,741
  4,043
  4,357
  4,683
  5,022
  5,375
  5,741
  6,122
  6,518
  6,930
  7,360
  7,806
  8,272
  8,758
  9,264
  9,792
  10,344
  10,920
Funds from operations, $m
  2,069
  2,383
  2,727
  3,098
  3,496
  3,919
  4,367
  4,840
  5,337
  5,857
  6,401
  6,881
  7,472
  8,088
  8,728
  9,393
  10,085
  10,803
  11,550
  12,326
  13,133
  13,973
  14,846
  15,756
  16,703
  17,690
  18,719
  19,793
  20,913
  22,083
  23,305
Change in working capital, $m
  116
  79
  86
  93
  99
  106
  112
  118
  124
  130
  136
  142
  148
  155
  161
  167
  174
  180
  188
  195
  203
  211
  219
  228
  238
  248
  258
  269
  281
  294
  307
Cash from operations, $m
  1,953
  2,304
  2,641
  3,006
  3,397
  3,813
  4,255
  4,722
  5,212
  5,727
  6,265
  6,738
  7,324
  7,933
  8,567
  9,226
  9,911
  10,623
  11,362
  12,131
  12,931
  13,762
  14,627
  15,527
  16,465
  17,442
  18,461
  19,523
  20,632
  21,789
  22,998
Maintenance CAPEX, $m
  0
  -866
  -1,014
  -1,176
  -1,350
  -1,536
  -1,735
  -1,946
  -2,168
  -2,402
  -2,647
  -2,904
  -3,171
  -3,450
  -3,741
  -4,043
  -4,357
  -4,683
  -5,022
  -5,375
  -5,741
  -6,122
  -6,518
  -6,930
  -7,360
  -7,806
  -8,272
  -8,758
  -9,264
  -9,792
  -10,344
New CAPEX, $m
  -1,339
  -1,276
  -1,386
  -1,496
  -1,604
  -1,709
  -1,812
  -1,913
  -2,011
  -2,109
  -2,205
  -2,302
  -2,399
  -2,498
  -2,598
  -2,701
  -2,807
  -2,917
  -3,031
  -3,151
  -3,276
  -3,407
  -3,545
  -3,690
  -3,843
  -4,005
  -4,175
  -4,355
  -4,544
  -4,744
  -4,955
Cash from investing activities, $m
  -859
  -2,142
  -2,400
  -2,672
  -2,954
  -3,245
  -3,547
  -3,859
  -4,179
  -4,511
  -4,852
  -5,206
  -5,570
  -5,948
  -6,339
  -6,744
  -7,164
  -7,600
  -8,053
  -8,526
  -9,017
  -9,529
  -10,063
  -10,620
  -11,203
  -11,811
  -12,447
  -13,113
  -13,808
  -14,536
  -15,299
Free cash flow, $m
  1,094
  162
  240
  334
  443
  568
  708
  863
  1,033
  1,216
  1,412
  1,533
  1,753
  1,985
  2,228
  2,482
  2,747
  3,023
  3,309
  3,606
  3,914
  4,233
  4,564
  4,907
  5,262
  5,631
  6,014
  6,411
  6,824
  7,253
  7,699
Issuance/(repayment) of debt, $m
  -471
  1,728
  1,868
  2,017
  2,162
  2,303
  2,442
  2,577
  2,710
  2,842
  2,972
  3,102
  3,233
  3,366
  3,501
  3,639
  3,782
  3,931
  4,085
  4,246
  4,414
  4,591
  4,777
  4,973
  5,179
  5,397
  5,626
  5,868
  6,123
  6,393
  6,677
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
  1,728
  1,868
  2,017
  2,162
  2,303
  2,442
  2,577
  2,710
  2,842
  2,972
  3,102
  3,233
  3,366
  3,501
  3,639
  3,782
  3,931
  4,085
  4,246
  4,414
  4,591
  4,777
  4,973
  5,179
  5,397
  5,626
  5,868
  6,123
  6,393
  6,677
Total cash flow (excl. dividends), $m
  133
  1,891
  2,109
  2,350
  2,605
  2,871
  3,150
  3,441
  3,743
  4,058
  4,384
  4,635
  4,986
  5,351
  5,729
  6,122
  6,530
  6,953
  7,394
  7,851
  8,328
  8,824
  9,341
  9,879
  10,441
  11,028
  11,640
  12,279
  12,947
  13,646
  14,376
Retained Cash Flow (-), $m
  -172
  -282
  -307
  -331
  -355
  -378
  -401
  -423
  -445
  -466
  -488
  -509
  -531
  -552
  -575
  -597
  -621
  -645
  -670
  -697
  -725
  -754
  -784
  -816
  -850
  -886
  -923
  -963
  -1,005
  -1,049
  -1,096
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
 
  1,609
  1,802
  2,019
  2,250
  2,493
  2,749
  3,018
  3,298
  3,591
  3,896
  4,126
  4,456
  4,798
  5,155
  5,525
  5,909
  6,308
  6,723
  7,155
  7,603
  8,070
  8,557
  9,063
  9,591
  10,142
  10,716
  11,316
  11,942
  12,596
  13,280
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
 
  1,459
  1,467
  1,462
  1,434
  1,382
  1,310
  1,221
  1,117
  1,004
  885
  749
  636
  528
  430
  341
  265
  201
  148
  106
  74
  51
  33
  21
  13
  8
  4
  2
  1
  1
  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 24.4
Price to Sales 2.4
Price to Book 8.4
Price to Tangible Book
Price to Cash Flow 7.1
Price to Free Cash Flow 22.4
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 17.1% 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 84.557 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 $13.8 billion.

RELATED COMPANIES Price Int.Val. Rating
HEES H&E Equipment 38.02 10.13  str.sell
HRI Herc Holdings 60.94 18.20  str.sell

COMPANY NEWS

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▶ Calculating The Fair Value Of United Rentals Inc (URI)   [Nov-16-17 05:07PM  Simply Wall St.]
▶ Trump Trade 2018: Real Money Columnists Make Their Picks   [Nov-07-17 05:59PM  TheStreet.com]
▶ Top Ranked Value Stocks to Buy for October 27th   [Oct-27-17 08:54AM  Zacks]
▶ Is United Rentals (URI) a Strong Value Stock?   [Oct-24-17 07:04PM  Zacks]
▶ 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]
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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