Intrinsic value of Basic Energy Services, Inc. - BAS

Previous Close

$2.68

  Intrinsic Value

$2.01

stock screener

  Rating & Target

sell

-25%

Previous close

$2.68

 
Intrinsic value

$2.01

 
Up/down potential

-25%

 
Rating

sell

We calculate the intrinsic value of BAS 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 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  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
  984
  1,007
  1,033
  1,062
  1,094
  1,129
  1,168
  1,209
  1,254
  1,302
  1,354
  1,409
  1,467
  1,530
  1,596
  1,666
  1,740
  1,818
  1,901
  1,988
  2,080
  2,177
  2,280
  2,388
  2,501
  2,621
  2,747
  2,879
  3,019
  3,165
Variable operating expenses, $m
  1,055
  1,079
  1,107
  1,138
  1,173
  1,211
  1,252
  1,296
  1,345
  1,396
  1,451
  1,510
  1,573
  1,639
  1,710
  1,785
  1,864
  1,948
  2,037
  2,130
  2,229
  2,333
  2,443
  2,559
  2,680
  2,809
  2,944
  3,086
  3,235
  3,392
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
  1,055
  1,079
  1,107
  1,138
  1,173
  1,211
  1,252
  1,296
  1,345
  1,396
  1,451
  1,510
  1,573
  1,639
  1,710
  1,785
  1,864
  1,948
  2,037
  2,130
  2,229
  2,333
  2,443
  2,559
  2,680
  2,809
  2,944
  3,086
  3,235
  3,392
Operating income, $m
  -71
  -72
  -74
  -76
  -79
  -81
  -84
  -87
  -90
  -94
  -97
  -101
  -105
  -110
  -114
  -119
  -125
  -130
  -136
  -143
  -149
  -156
  -163
  -171
  -179
  -188
  -197
  -206
  -216
  -227
EBITDA, $m
  27
  28
  28
  29
  30
  31
  32
  33
  34
  36
  37
  38
  40
  42
  44
  45
  48
  50
  52
  54
  57
  59
  62
  65
  68
  72
  75
  79
  82
  86
Interest expense (income), $m
  0
  48
  50
  52
  54
  56
  58
  61
  64
  67
  71
  74
  78
  83
  87
  92
  97
  103
  108
  114
  121
  128
  135
  142
  150
  159
  167
  177
  186
  197
  208
Earnings before tax, $m
  -119
  -122
  -126
  -130
  -135
  -140
  -145
  -151
  -157
  -164
  -171
  -179
  -188
  -197
  -206
  -217
  -227
  -239
  -251
  -263
  -277
  -291
  -306
  -321
  -338
  -355
  -374
  -393
  -413
  -434
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
Net income, $m
  -119
  -122
  -126
  -130
  -135
  -140
  -145
  -151
  -157
  -164
  -171
  -179
  -188
  -197
  -206
  -217
  -227
  -239
  -251
  -263
  -277
  -291
  -306
  -321
  -338
  -355
  -374
  -393
  -413
  -434

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  777
  795
  815
  838
  864
  891
  922
  955
  990
  1,028
  1,069
  1,112
  1,158
  1,207
  1,259
  1,315
  1,373
  1,435
  1,500
  1,569
  1,642
  1,718
  1,799
  1,884
  1,974
  2,069
  2,168
  2,273
  2,383
  2,498
Adjusted assets (=assets-cash), $m
  777
  795
  815
  838
  864
  891
  922
  955
  990
  1,028
  1,069
  1,112
  1,158
  1,207
  1,259
  1,315
  1,373
  1,435
  1,500
  1,569
  1,642
  1,718
  1,799
  1,884
  1,974
  2,069
  2,168
  2,273
  2,383
  2,498
Revenue / Adjusted assets
  1.266
  1.267
  1.267
  1.267
  1.266
  1.267
  1.267
  1.266
  1.267
  1.267
  1.267
  1.267
  1.267
  1.268
  1.268
  1.267
  1.267
  1.267
  1.267
  1.267
  1.267
  1.267
  1.267
  1.268
  1.267
  1.267
  1.267
  1.267
  1.267
  1.267
Average production assets, $m
  487
  498
  511
  526
  542
  559
  578
  599
  621
  645
  670
  697
  726
  757
  790
  824
  861
  900
  941
  984
  1,030
  1,078
  1,128
  1,182
  1,238
  1,297
  1,360
  1,425
  1,494
  1,567
Working capital, $m
  48
  49
  51
  52
  54
  55
  57
  59
  61
  64
  66
  69
  72
  75
  78
  82
  85
  89
  93
  97
  102
  107
  112
  117
  123
  128
  135
  141
  148
  155
Total debt, $m
  361
  373
  388
  404
  422
  442
  464
  487
  512
  539
  568
  599
  632
  667
  704
  743
  785
  829
  875
  924
  976
  1,031
  1,088
  1,149
  1,213
  1,280
  1,351
  1,425
  1,504
  1,586
Total liabilities, $m
  553
  566
  580
  597
  615
  635
  656
  680
  705
  732
  761
  792
  825
  860
  897
  936
  978
  1,022
  1,068
  1,117
  1,169
  1,223
  1,281
  1,342
  1,406
  1,473
  1,544
  1,618
  1,696
  1,779
Total equity, $m
  224
  229
  235
  241
  249
  257
  265
  275
  285
  296
  308
  320
  334
  348
  363
  379
  395
  413
  432
  452
  473
  495
  518
  543
  569
  596
  624
  655
  686
  720
Total liabilities and equity, $m
  777
  795
  815
  838
  864
  892
  921
  955
  990
  1,028
  1,069
  1,112
  1,159
  1,208
  1,260
  1,315
  1,373
  1,435
  1,500
  1,569
  1,642
  1,718
  1,799
  1,885
  1,975
  2,069
  2,168
  2,273
  2,382
  2,499
Debt-to-equity ratio
  1.610
  1.630
  1.650
  1.670
  1.700
  1.720
  1.750
  1.770
  1.800
  1.820
  1.850
  1.870
  1.890
  1.920
  1.940
  1.960
  1.990
  2.010
  2.030
  2.050
  2.060
  2.080
  2.100
  2.120
  2.130
  2.150
  2.160
  2.180
  2.190
  2.200
Adjusted equity ratio
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -119
  -122
  -126
  -130
  -135
  -140
  -145
  -151
  -157
  -164
  -171
  -179
  -188
  -197
  -206
  -217
  -227
  -239
  -251
  -263
  -277
  -291
  -306
  -321
  -338
  -355
  -374
  -393
  -413
  -434
Depreciation, amort., depletion, $m
  98
  100
  103
  105
  109
  112
  116
  120
  124
  129
  134
  139
  145
  151
  158
  165
  172
  180
  188
  197
  206
  216
  226
  236
  248
  259
  272
  285
  299
  313
Funds from operations, $m
  -21
  -22
  -23
  -25
  -26
  -27
  -29
  -31
  -33
  -35
  -37
  -40
  -43
  -45
  -48
  -52
  -55
  -59
  -62
  -67
  -71
  -75
  -80
  -85
  -90
  -96
  -102
  -108
  -114
  -121
Change in working capital, $m
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
Cash from operations, $m
  -22
  -23
  -25
  -26
  -27
  -29
  -31
  -33
  -35
  -37
  -40
  -43
  -45
  -48
  -52
  -55
  -59
  -63
  -67
  -71
  -75
  -80
  -85
  -90
  -96
  -102
  -108
  -114
  -121
  -128
Maintenance CAPEX, $m
  -95
  -97
  -100
  -102
  -105
  -108
  -112
  -116
  -120
  -124
  -129
  -134
  -139
  -145
  -151
  -158
  -165
  -172
  -180
  -188
  -197
  -206
  -216
  -226
  -236
  -248
  -259
  -272
  -285
  -299
New CAPEX, $m
  -10
  -11
  -13
  -14
  -16
  -17
  -19
  -21
  -22
  -24
  -25
  -27
  -29
  -31
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -48
  -51
  -53
  -56
  -59
  -62
  -66
  -69
  -73
Cash from investing activities, $m
  -105
  -108
  -113
  -116
  -121
  -125
  -131
  -137
  -142
  -148
  -154
  -161
  -168
  -176
  -184
  -193
  -202
  -211
  -221
  -231
  -243
  -254
  -267
  -279
  -292
  -307
  -321
  -338
  -354
  -372
Free cash flow, $m
  -128
  -132
  -137
  -143
  -149
  -155
  -162
  -169
  -177
  -185
  -194
  -204
  -214
  -225
  -236
  -248
  -260
  -273
  -287
  -302
  -318
  -334
  -351
  -369
  -388
  -409
  -430
  -452
  -475
  -500
Issuance/(repayment) of debt, $m
  11
  13
  15
  16
  18
  20
  22
  23
  25
  27
  29
  31
  33
  35
  37
  39
  42
  44
  46
  49
  52
  55
  58
  61
  64
  67
  71
  74
  78
  82
Issuance/(repurchase) of shares, $m
  123
  127
  132
  137
  142
  148
  154
  160
  168
  175
  183
  192
  201
  211
  221
  232
  244
  256
  269
  283
  298
  313
  329
  346
  364
  382
  402
  423
  445
  468
Cash from financing (excl. dividends), $m  
  134
  140
  147
  153
  160
  168
  176
  183
  193
  202
  212
  223
  234
  246
  258
  271
  286
  300
  315
  332
  350
  368
  387
  407
  428
  449
  473
  497
  523
  550
Total cash flow (excl. dividends), $m
  6
  8
  9
  10
  11
  12
  14
  15
  16
  17
  18
  19
  20
  21
  23
  24
  25
  27
  28
  30
  32
  33
  35
  37
  39
  41
  43
  46
  48
  50
Retained Cash Flow (-), $m
  -123
  -127
  -132
  -137
  -142
  -148
  -154
  -160
  -168
  -175
  -183
  -192
  -201
  -211
  -221
  -232
  -244
  -256
  -269
  -283
  -298
  -313
  -329
  -346
  -364
  -382
  -402
  -423
  -445
  -468
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
  -117
  -119
  -123
  -126
  -130
  -135
  -140
  -146
  -152
  -158
  -165
  -173
  -181
  -190
  -199
  -208
  -219
  -229
  -241
  -253
  -266
  -279
  -294
  -309
  -325
  -341
  -359
  -377
  -397
  -417
Discount rate, %
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.12
  16.93
  17.78
  18.67
  19.60
  20.58
  21.61
  22.69
  23.82
  25.01
  26.26
  27.58
PV of cash for distribution, $m
  -110
  -104
  -99
  -94
  -88
  -83
  -77
  -71
  -65
  -59
  -53
  -47
  -41
  -36
  -31
  -26
  -21
  -18
  -14
  -11
  -9
  -6
  -5
  -3
  -2
  -2
  -1
  -1
  0
  0
Current shareholders' claim on cash, %
  55.4
  30.6
  16.8
  9.2
  5.0
  2.7
  1.5
  0.8
  0.4
  0.2
  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

Basic Energy Services, Inc. provides well site services to oil and natural gas drilling and producing companies in the United States. Its Completion and Remedial Services segment offers pumping services, such as cementing, acidizing, fracturing, nitrogen, and pressure testing; rental and fishing tools; coiled tubing; snubbing services; thru-tubing; cased-hole wireline services; and underbalanced drilling in low pressure and fluid sensitive reservoirs. This segment operates 291 pumping units; and 42 air compressor packages. The company’s Fluid Services segment is involved in the transportation of fluids; production of salt water; sale and transportation of fresh and brine water; rental of portable fracturing and test tanks; recycling and treatment of wastewater; operation of fresh water and brine source wells, and non-hazardous wastewater disposal wells; and preparation, construction, and maintenance of access roads, drilling locations, and production facilities. As of December 31, 2015, this segment owned and operated 985 fluid service trucks with an average fluid hauling capacity of up to 150 barrels apiece; and owned 85 salt water disposal facilities. Its Well Servicing segment provides services performed with a mobile well servicing rig and ancillary equipment, such as maintenance work, hoisting tools and equipment required by the operation, and plugging and abandonment services, as well as manufactures and sells workover rigs. As of December 31, 2015, this segment operated a fleet of 421 well servicing rigs. Its Contract Drilling segment employs drilling rigs and related equipment to penetrate the earth to a desired depth and initiate production. This segment owns and operates 12 land drilling rigs. The company was formerly known as Sierra Well Service, Inc. and changed its name to Basic Energy Services, Inc. in 2000. Basic Energy Services, Inc. was founded in 1992 and is headquartered in Fort Worth, Texas.

FINANCIAL RATIOS  of  Basic Energy Services, Inc. (BAS)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

BAS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BAS stock intrinsic value calculation we used $965 million for the last fiscal year's total revenue generated by Basic Energy Services, Inc.. The default revenue input number comes from 0001 income statement of Basic Energy Services, Inc.. 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 BAS 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 6.7%, whose default value for BAS is calculated based on our internal credit rating of Basic Energy Services, Inc., 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 Basic Energy Services, Inc..
    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 BAS stock the variable cost ratio is equal to 107.2%.

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 BAS 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 13.8% for Basic Energy Services, Inc..

Corporate tax rate of 27% is the nominal tax rate for Basic Energy Services, Inc.. 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 BAS 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 BAS are equal to 49.5%.

Life of production assets of 3.8 years is the average useful life of capital assets used in Basic Energy Services, Inc. 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 BAS is equal to 4.9%. 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 - $219.428 million for Basic Energy Services, Inc. - 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 26.906 million for Basic Energy Services, Inc. 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 Basic Energy Services, Inc. at the current share price and the inputted number of shares is $0.1 billion.

RELATED COMPANIES Price Int.Val. Rating
HAL Halliburton Co 25.88 24.68  hold

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.