Intrinsic value of Coeur Mining, Inc. - CDE

Previous Close

$4.91

  Intrinsic Value

$1.05

stock screener

  Rating & Target

str. sell

-79%

Previous close

$4.91

 
Intrinsic value

$1.05

 
Up/down potential

-79%

 
Rating

str. sell

We calculate the intrinsic value of CDE 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 1.0

 

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
  639
  653
  670
  689
  710
  733
  758
  785
  814
  845
  878
  914
  952
  992
  1,035
  1,080
  1,128
  1,179
  1,233
  1,290
  1,349
  1,412
  1,479
  1,549
  1,623
  1,700
  1,782
  1,868
  1,958
  2,053
Variable operating expenses, $m
  179
  184
  188
  194
  199
  206
  213
  220
  229
  237
  247
  257
  267
  279
  291
  304
  317
  331
  346
  362
  379
  397
  416
  435
  456
  478
  501
  525
  550
  577
Fixed operating expenses, $m
  492
  502
  513
  525
  536
  548
  560
  572
  585
  598
  611
  625
  638
  652
  667
  681
  696
  712
  727
  743
  760
  776
  793
  811
  829
  847
  866
  885
  904
  924
Total operating expenses, $m
  671
  686
  701
  719
  735
  754
  773
  792
  814
  835
  858
  882
  905
  931
  958
  985
  1,013
  1,043
  1,073
  1,105
  1,139
  1,173
  1,209
  1,246
  1,285
  1,325
  1,367
  1,410
  1,454
  1,501
Operating income, $m
  -32
  -33
  -32
  -29
  -26
  -21
  -15
  -8
  0
  10
  20
  33
  46
  61
  78
  95
  115
  136
  159
  184
  210
  239
  270
  303
  338
  375
  416
  458
  504
  552
EBITDA, $m
  112
  115
  120
  127
  135
  145
  156
  169
  184
  201
  219
  240
  262
  286
  312
  340
  371
  403
  438
  476
  516
  559
  605
  653
  705
  761
  819
  881
  947
  1,018
Interest expense (income), $m
  42
  26
  27
  28
  29
  30
  32
  34
  36
  38
  40
  42
  45
  48
  51
  54
  57
  61
  64
  68
  72
  77
  81
  86
  91
  96
  102
  108
  114
  121
  128
Earnings before tax, $m
  -58
  -59
  -59
  -58
  -56
  -53
  -49
  -44
  -38
  -30
  -22
  -12
  -2
  10
  24
  38
  55
  72
  91
  112
  134
  158
  184
  212
  241
  273
  307
  344
  383
  424
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  3
  6
  10
  15
  19
  25
  30
  36
  43
  50
  57
  65
  74
  83
  93
  103
  115
Net income, $m
  -58
  -59
  -59
  -58
  -56
  -53
  -49
  -44
  -38
  -30
  -22
  -12
  -2
  8
  17
  28
  40
  53
  66
  81
  98
  115
  134
  154
  176
  199
  224
  251
  280
  310

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
  1,745
  1,785
  1,831
  1,882
  1,939
  2,002
  2,070
  2,144
  2,223
  2,309
  2,400
  2,497
  2,601
  2,711
  2,828
  2,952
  3,083
  3,222
  3,369
  3,523
  3,687
  3,859
  4,040
  4,232
  4,433
  4,645
  4,868
  5,103
  5,351
  5,611
Adjusted assets (=assets-cash), $m
  1,745
  1,785
  1,831
  1,882
  1,939
  2,002
  2,070
  2,144
  2,223
  2,309
  2,400
  2,497
  2,601
  2,711
  2,828
  2,952
  3,083
  3,222
  3,369
  3,523
  3,687
  3,859
  4,040
  4,232
  4,433
  4,645
  4,868
  5,103
  5,351
  5,611
Revenue / Adjusted assets
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
Average production assets, $m
  1,200
  1,228
  1,260
  1,295
  1,334
  1,377
  1,424
  1,475
  1,530
  1,588
  1,651
  1,718
  1,790
  1,865
  1,946
  2,031
  2,121
  2,217
  2,318
  2,424
  2,537
  2,655
  2,780
  2,912
  3,050
  3,196
  3,350
  3,512
  3,682
  3,860
Working capital, $m
  47
  48
  50
  51
  53
  54
  56
  58
  60
  63
  65
  68
  70
  73
  77
  80
  84
  87
  91
  95
  100
  105
  109
  115
  120
  126
  132
  138
  145
  152
Total debt, $m
  475
  495
  518
  544
  572
  604
  638
  675
  715
  758
  804
  852
  904
  960
  1,019
  1,081
  1,147
  1,216
  1,290
  1,368
  1,450
  1,536
  1,627
  1,723
  1,824
  1,931
  2,043
  2,161
  2,285
  2,415
Total liabilities, $m
  876
  896
  919
  945
  973
  1,005
  1,039
  1,076
  1,116
  1,159
  1,205
  1,254
  1,306
  1,361
  1,420
  1,482
  1,548
  1,617
  1,691
  1,769
  1,851
  1,937
  2,028
  2,124
  2,225
  2,332
  2,444
  2,562
  2,686
  2,816
Total equity, $m
  869
  889
  912
  937
  966
  997
  1,031
  1,068
  1,107
  1,150
  1,195
  1,244
  1,295
  1,350
  1,408
  1,470
  1,535
  1,605
  1,678
  1,755
  1,836
  1,922
  2,012
  2,107
  2,208
  2,313
  2,425
  2,541
  2,665
  2,794
Total liabilities and equity, $m
  1,745
  1,785
  1,831
  1,882
  1,939
  2,002
  2,070
  2,144
  2,223
  2,309
  2,400
  2,498
  2,601
  2,711
  2,828
  2,952
  3,083
  3,222
  3,369
  3,524
  3,687
  3,859
  4,040
  4,231
  4,433
  4,645
  4,869
  5,103
  5,351
  5,610
Debt-to-equity ratio
  0.550
  0.560
  0.570
  0.580
  0.590
  0.610
  0.620
  0.630
  0.650
  0.660
  0.670
  0.690
  0.700
  0.710
  0.720
  0.740
  0.750
  0.760
  0.770
  0.780
  0.790
  0.800
  0.810
  0.820
  0.830
  0.830
  0.840
  0.850
  0.860
  0.860
Adjusted equity ratio
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498
  0.498

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -58
  -59
  -59
  -58
  -56
  -53
  -49
  -44
  -38
  -30
  -22
  -12
  -2
  8
  17
  28
  40
  53
  66
  81
  98
  115
  134
  154
  176
  199
  224
  251
  280
  310
Depreciation, amort., depletion, $m
  145
  148
  152
  156
  161
  166
  172
  178
  184
  191
  199
  207
  216
  225
  234
  245
  256
  267
  279
  292
  306
  320
  335
  351
  368
  385
  404
  423
  444
  465
Funds from operations, $m
  86
  89
  92
  98
  104
  113
  122
  134
  146
  161
  177
  195
  214
  232
  252
  273
  295
  320
  346
  374
  403
  435
  469
  505
  544
  585
  628
  674
  723
  775
Change in working capital, $m
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
Cash from operations, $m
  86
  88
  91
  96
  103
  111
  121
  132
  144
  159
  174
  192
  211
  229
  249
  269
  292
  316
  342
  369
  399
  431
  464
  500
  538
  579
  622
  668
  716
  768
Maintenance CAPEX, $m
  -142
  -145
  -148
  -152
  -156
  -161
  -166
  -172
  -178
  -184
  -191
  -199
  -207
  -216
  -225
  -234
  -245
  -256
  -267
  -279
  -292
  -306
  -320
  -335
  -351
  -368
  -385
  -404
  -423
  -444
New CAPEX, $m
  -23
  -28
  -32
  -35
  -39
  -43
  -47
  -51
  -55
  -59
  -63
  -67
  -71
  -76
  -80
  -85
  -90
  -95
  -101
  -106
  -112
  -119
  -125
  -132
  -139
  -146
  -154
  -162
  -170
  -179
Cash from investing activities, $m
  -165
  -173
  -180
  -187
  -195
  -204
  -213
  -223
  -233
  -243
  -254
  -266
  -278
  -292
  -305
  -319
  -335
  -351
  -368
  -385
  -404
  -425
  -445
  -467
  -490
  -514
  -539
  -566
  -593
  -623
Free cash flow, $m
  -80
  -85
  -88
  -91
  -93
  -93
  -92
  -91
  -88
  -84
  -80
  -74
  -67
  -62
  -57
  -50
  -43
  -35
  -26
  -16
  -6
  6
  19
  34
  49
  65
  83
  103
  123
  146
Issuance/(repayment) of debt, $m
  16
  20
  23
  26
  29
  31
  34
  37
  40
  43
  46
  49
  52
  55
  59
  62
  66
  70
  74
  78
  82
  86
  91
  96
  101
  106
  112
  118
  124
  131
Issuance/(repurchase) of shares, $m
  74
  79
  82
  84
  85
  85
  83
  81
  77
  73
  67
  61
  53
  47
  41
  34
  26
  17
  7
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  90
  99
  105
  110
  114
  116
  117
  118
  117
  116
  113
  110
  105
  102
  100
  96
  92
  87
  81
  78
  82
  86
  91
  96
  101
  106
  112
  118
  124
  131
Total cash flow (excl. dividends), $m
  11
  15
  17
  19
  21
  23
  25
  27
  29
  31
  34
  36
  38
  41
  43
  46
  48
  51
  54
  61
  76
  93
  111
  130
  150
  172
  195
  220
  247
  276
Retained Cash Flow (-), $m
  -74
  -79
  -82
  -84
  -85
  -85
  -83
  -81
  -77
  -73
  -67
  -61
  -53
  -55
  -58
  -62
  -65
  -69
  -73
  -77
  -81
  -86
  -90
  -95
  -100
  -106
  -111
  -117
  -123
  -129
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
  -64
  -65
  -65
  -65
  -64
  -62
  -58
  -54
  -48
  -42
  -34
  -25
  -15
  -14
  -15
  -16
  -17
  -18
  -19
  -16
  -5
  7
  20
  34
  50
  66
  84
  103
  124
  147
Discount rate, %
  7.00
  7.35
  7.72
  8.10
  8.51
  8.93
  9.38
  9.85
  10.34
  10.86
  11.40
  11.97
  12.57
  13.20
  13.86
  14.55
  15.28
  16.04
  16.85
  17.69
  18.57
  19.50
  20.48
  21.50
  22.58
  23.70
  24.89
  26.13
  27.44
  28.81
PV of cash for distribution, $m
  -60
  -56
  -52
  -48
  -42
  -37
  -31
  -25
  -20
  -15
  -10
  -6
  -3
  -3
  -2
  -2
  -2
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  93.1
  86.3
  80.0
  74.2
  68.8
  64.0
  59.8
  56.0
  52.8
  50.0
  47.6
  45.6
  44.0
  42.7
  41.6
  40.7
  40.2
  39.8
  39.6
  39.6
  39.6
  39.6
  39.6
  39.6
  39.6
  39.6
  39.6
  39.6
  39.6
  39.6

Coeur Mining, Inc. is a gold and silver producer. The Company has its mines located in the United States, Mexico, and Bolivia and exploration projects in Mexico and Argentina. Its segments include Palmarejo, Rochester, Kensington, Wharf, San Bartolome mines, Coeur Capital and Other. The Palmarejo complex is located in the state of Chihuahua, Mexico. The Rochester mine is located in Pershing County, Nevada, approximately 13 miles northeast of the city of Lovelock. The Kensington underground gold mine and associated milling facilities are located on the east side of the Lynn Canal over 45 miles north-northwest of Juneau, Alaska. The Wharf mine is located in the northern Black Hills of western South Dakota. The San Bartolome silver mine is located on the flanks of the Cerro Rico Mountain bordering the town of Potosi, in the department of Potosi, Bolivia. Coeur Capital segment consists of the Endeavor silver stream. The Other segment includes the La Preciosa project and Joaquin project.

FINANCIAL RATIOS  of  Coeur Mining, Inc. (CDE)

Valuation Ratios
P/E Ratio 16.2
Price to Sales 1.3
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 7.1
Price to Free Cash Flow 35.5
Growth Rates
Sales Growth Rate 3.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 6.3%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio 14
Current Ratio 0.5
LT Debt to Equity 25.9%
Total Debt to Equity 27.5%
Interest Coverage 1
Management Effectiveness
Return On Assets 178.4%
Ret/ On Assets - 3 Yr. Avg. 33.6%
Return On Total Capital 5.8%
Ret/ On T. Cap. - 3 Yr. Avg. -36.5%
Return On Equity 9.3%
Return On Equity - 3 Yr. Avg. -56.6%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 38.4%
Gross Margin - 3 Yr. Avg. 29.7%
EBITDA Margin 24.9%
EBITDA Margin - 3 Yr. Avg. -76.9%
Operating Margin 7.1%
Oper. Margin - 3 Yr. Avg. -97.5%
Pre-Tax Margin 0.2%
Pre-Tax Margin - 3 Yr. Avg. -104.9%
Net Profit Margin 8.3%
Net Profit Margin - 3 Yr. Avg. -78.4%
Effective Tax Rate -5400%
Eff/ Tax Rate - 3 Yr. Avg. -1789%
Payout Ratio 0%

CDE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CDE stock intrinsic value calculation we used $626 million for the last fiscal year's total revenue generated by Coeur Mining, Inc.. The default revenue input number comes from 0001 income statement of Coeur Mining, 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 CDE 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 7%, whose default value for CDE is calculated based on our internal credit rating of Coeur Mining, 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 Coeur Mining, 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 CDE stock the variable cost ratio is equal to 28.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $481 million in the base year in the intrinsic value calculation for CDE 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 5.6% for Coeur Mining, Inc..

Corporate tax rate of 27% is the nominal tax rate for Coeur Mining, 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 CDE 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 CDE are equal to 188%.

Life of production assets of 8.3 years is the average useful life of capital assets used in Coeur Mining, 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 CDE 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 - $852.512 million for Coeur Mining, 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 203.307 million for Coeur Mining, 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 Coeur Mining, Inc. at the current share price and the inputted number of shares is $1.0 billion.

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