Intrinsic value of Centennial Resource Development, Inc. - CDEV

Previous Close

$7.63

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$7.63

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of CDEV 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 2.1

 

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, %
  33.90
  31.01
  28.41
  26.07
  23.96
  22.07
  20.36
  18.82
  17.44
  16.20
  15.08
  14.07
  13.16
  12.35
  11.61
  10.95
  10.36
  9.82
  9.34
  8.90
  8.51
  8.16
  7.85
  7.56
  7.31
  7.07
  6.87
  6.68
  6.51
  6.36
Revenue, $m
  1,193
  1,563
  2,007
  2,530
  3,137
  3,829
  4,608
  5,475
  6,430
  7,472
  8,598
  9,808
  11,099
  12,469
  13,917
  15,441
  17,040
  18,713
  20,461
  22,283
  24,180
  26,153
  28,205
  30,338
  32,554
  34,857
  37,251
  39,740
  42,328
  45,020
Variable operating expenses, $m
  595
  653
  722
  804
  899
  1,007
  1,129
  1,265
  1,414
  1,577
  1,344
  1,533
  1,735
  1,949
  2,175
  2,413
  2,663
  2,925
  3,198
  3,483
  3,779
  4,088
  4,409
  4,742
  5,088
  5,448
  5,822
  6,211
  6,616
  7,037
Fixed operating expenses, $m
  62
  64
  65
  67
  68
  70
  71
  73
  74
  76
  77
  79
  81
  83
  85
  86
  88
  90
  92
  94
  96
  98
  101
  103
  105
  107
  110
  112
  115
  117
Total operating expenses, $m
  657
  717
  787
  871
  967
  1,077
  1,200
  1,338
  1,488
  1,653
  1,421
  1,612
  1,816
  2,032
  2,260
  2,499
  2,751
  3,015
  3,290
  3,577
  3,875
  4,186
  4,510
  4,845
  5,193
  5,555
  5,932
  6,323
  6,731
  7,154
Operating income, $m
  536
  846
  1,220
  1,660
  2,170
  2,752
  3,408
  4,138
  4,942
  5,819
  7,177
  8,196
  9,283
  10,438
  11,657
  12,941
  14,288
  15,698
  17,171
  18,706
  20,304
  21,967
  23,696
  25,493
  27,361
  29,302
  31,319
  33,416
  35,597
  37,866
EBITDA, $m
  1,383
  1,830
  2,367
  2,999
  3,732
  4,569
  5,512
  6,561
  7,717
  8,977
  10,340
  11,804
  13,367
  15,025
  16,777
  18,622
  20,557
  22,583
  24,698
  26,903
  29,200
  31,589
  34,073
  36,655
  39,337
  42,126
  45,024
  48,036
  51,169
  54,429
Interest expense (income), $m
  0
  38
  59
  85
  116
  153
  195
  244
  299
  360
  427
  500
  579
  664
  755
  851
  953
  1,060
  1,173
  1,290
  1,413
  1,541
  1,674
  1,813
  1,957
  2,107
  2,263
  2,425
  2,593
  2,768
  2,950
Earnings before tax, $m
  498
  787
  1,135
  1,543
  2,017
  2,557
  3,164
  3,839
  4,583
  5,393
  6,677
  7,617
  8,619
  9,683
  10,806
  11,988
  13,228
  14,526
  15,880
  17,293
  18,763
  20,293
  21,883
  23,536
  25,254
  27,039
  28,894
  30,823
  32,829
  34,917
Tax expense, $m
  134
  213
  306
  417
  545
  690
  854
  1,037
  1,237
  1,456
  1,803
  2,056
  2,327
  2,614
  2,918
  3,237
  3,572
  3,922
  4,288
  4,669
  5,066
  5,479
  5,908
  6,355
  6,819
  7,300
  7,801
  8,322
  8,864
  9,428
Net income, $m
  363
  575
  828
  1,127
  1,472
  1,866
  2,310
  2,803
  3,345
  3,937
  4,874
  5,560
  6,292
  7,068
  7,888
  8,751
  9,657
  10,604
  11,593
  12,624
  13,697
  14,814
  15,975
  17,181
  18,435
  19,738
  21,093
  22,501
  23,965
  25,489

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
  5,708
  7,479
  9,603
  12,106
  15,007
  18,319
  22,048
  26,198
  30,767
  35,751
  41,141
  46,929
  53,106
  59,662
  66,590
  73,881
  81,532
  89,538
  97,899
  106,616
  115,693
  125,136
  134,954
  145,158
  155,762
  166,782
  178,235
  190,142
  202,525
  215,409
Adjusted assets (=assets-cash), $m
  5,708
  7,479
  9,603
  12,106
  15,007
  18,319
  22,048
  26,198
  30,767
  35,751
  41,141
  46,929
  53,106
  59,662
  66,590
  73,881
  81,532
  89,538
  97,899
  106,616
  115,693
  125,136
  134,954
  145,158
  155,762
  166,782
  178,235
  190,142
  202,525
  215,409
Revenue / Adjusted assets
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
Average production assets, $m
  5,004
  6,555
  8,418
  10,612
  13,155
  16,057
  19,326
  22,964
  26,969
  31,337
  36,062
  41,135
  46,549
  52,296
  58,369
  64,760
  71,466
  78,484
  85,813
  93,454
  101,410
  109,687
  118,293
  127,238
  136,533
  146,192
  156,232
  166,669
  177,523
  188,815
Working capital, $m
  -175
  -230
  -295
  -372
  -461
  -563
  -677
  -805
  -945
  -1,098
  -1,264
  -1,442
  -1,632
  -1,833
  -2,046
  -2,270
  -2,505
  -2,751
  -3,008
  -3,276
  -3,554
  -3,845
  -4,146
  -4,460
  -4,785
  -5,124
  -5,476
  -5,842
  -6,222
  -6,618
Total debt, $m
  1,091
  1,572
  2,150
  2,831
  3,620
  4,521
  5,535
  6,664
  7,907
  9,262
  10,728
  12,302
  13,983
  15,766
  17,650
  19,634
  21,715
  23,892
  26,166
  28,537
  31,006
  33,575
  36,245
  39,021
  41,905
  44,903
  48,018
  51,257
  54,625
  58,129
Total liabilities, $m
  1,553
  2,034
  2,612
  3,293
  4,082
  4,983
  5,997
  7,126
  8,369
  9,724
  11,190
  12,765
  14,445
  16,228
  18,112
  20,096
  22,177
  24,354
  26,628
  28,999
  31,468
  34,037
  36,707
  39,483
  42,367
  45,365
  48,480
  51,719
  55,087
  58,591
Total equity, $m
  4,156
  5,444
  6,991
  8,814
  10,925
  13,336
  16,051
  19,072
  22,399
  26,026
  29,950
  34,164
  38,661
  43,434
  48,477
  53,786
  59,355
  65,184
  71,270
  77,616
  84,224
  91,099
  98,246
  105,675
  113,395
  121,417
  129,755
  138,424
  147,439
  156,817
Total liabilities and equity, $m
  5,709
  7,478
  9,603
  12,107
  15,007
  18,319
  22,048
  26,198
  30,768
  35,750
  41,140
  46,929
  53,106
  59,662
  66,589
  73,882
  81,532
  89,538
  97,898
  106,615
  115,692
  125,136
  134,953
  145,158
  155,762
  166,782
  178,235
  190,143
  202,526
  215,408
Debt-to-equity ratio
  0.260
  0.290
  0.310
  0.320
  0.330
  0.340
  0.340
  0.350
  0.350
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
Adjusted equity ratio
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  363
  575
  828
  1,127
  1,472
  1,866
  2,310
  2,803
  3,345
  3,937
  4,874
  5,560
  6,292
  7,068
  7,888
  8,751
  9,657
  10,604
  11,593
  12,624
  13,697
  14,814
  15,975
  17,181
  18,435
  19,738
  21,093
  22,501
  23,965
  25,489
Depreciation, amort., depletion, $m
  848
  984
  1,147
  1,340
  1,563
  1,817
  2,104
  2,423
  2,774
  3,158
  3,163
  3,608
  4,083
  4,587
  5,120
  5,681
  6,269
  6,885
  7,527
  8,198
  8,896
  9,622
  10,377
  11,161
  11,977
  12,824
  13,705
  14,620
  15,572
  16,563
Funds from operations, $m
  1,211
  1,559
  1,975
  2,466
  3,035
  3,683
  4,414
  5,226
  6,120
  7,094
  8,037
  9,168
  10,375
  11,656
  13,008
  14,432
  15,926
  17,488
  19,120
  20,821
  22,593
  24,435
  26,351
  28,343
  30,412
  32,562
  34,797
  37,121
  39,538
  42,052
Change in working capital, $m
  -44
  -54
  -65
  -77
  -89
  -102
  -115
  -128
  -140
  -153
  -166
  -178
  -190
  -201
  -213
  -224
  -235
  -246
  -257
  -268
  -279
  -290
  -302
  -314
  -326
  -339
  -352
  -366
  -380
  -396
Cash from operations, $m
  1,255
  1,613
  2,041
  2,543
  3,124
  3,785
  4,528
  5,353
  6,260
  7,247
  8,203
  9,346
  10,565
  11,857
  13,221
  14,656
  16,161
  17,734
  19,377
  21,089
  22,871
  24,725
  26,653
  28,656
  30,738
  32,901
  35,149
  37,487
  39,918
  42,448
Maintenance CAPEX, $m
  -328
  -439
  -575
  -738
  -931
  -1,154
  -1,409
  -1,695
  -2,014
  -2,366
  -2,749
  -3,163
  -3,608
  -4,083
  -4,587
  -5,120
  -5,681
  -6,269
  -6,885
  -7,527
  -8,198
  -8,896
  -9,622
  -10,377
  -11,161
  -11,977
  -12,824
  -13,705
  -14,620
  -15,572
New CAPEX, $m
  -1,267
  -1,552
  -1,862
  -2,194
  -2,543
  -2,903
  -3,269
  -3,638
  -4,005
  -4,368
  -4,725
  -5,074
  -5,414
  -5,747
  -6,072
  -6,392
  -6,706
  -7,018
  -7,329
  -7,641
  -7,956
  -8,277
  -8,606
  -8,945
  -9,295
  -9,659
  -10,039
  -10,437
  -10,854
  -11,293
Cash from investing activities, $m
  -1,595
  -1,991
  -2,437
  -2,932
  -3,474
  -4,057
  -4,678
  -5,333
  -6,019
  -6,734
  -7,474
  -8,237
  -9,022
  -9,830
  -10,659
  -11,512
  -12,387
  -13,287
  -14,214
  -15,168
  -16,154
  -17,173
  -18,228
  -19,322
  -20,456
  -21,636
  -22,863
  -24,142
  -25,474
  -26,865
Free cash flow, $m
  -339
  -378
  -397
  -390
  -350
  -271
  -149
  20
  241
  513
  729
  1,109
  1,542
  2,027
  2,562
  3,145
  3,774
  4,448
  5,164
  5,921
  6,718
  7,553
  8,425
  9,335
  10,281
  11,265
  12,286
  13,345
  14,444
  15,583
Issuance/(repayment) of debt, $m
  393
  481
  578
  681
  789
  901
  1,014
  1,129
  1,243
  1,355
  1,466
  1,574
  1,680
  1,783
  1,884
  1,983
  2,081
  2,178
  2,274
  2,371
  2,469
  2,569
  2,671
  2,776
  2,884
  2,997
  3,115
  3,239
  3,368
  3,504
Issuance/(repurchase) of shares, $m
  692
  714
  718
  696
  640
  544
  405
  218
  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  
  1,085
  1,195
  1,296
  1,377
  1,429
  1,445
  1,419
  1,347
  1,243
  1,355
  1,466
  1,574
  1,680
  1,783
  1,884
  1,983
  2,081
  2,178
  2,274
  2,371
  2,469
  2,569
  2,671
  2,776
  2,884
  2,997
  3,115
  3,239
  3,368
  3,504
Total cash flow (excl. dividends), $m
  746
  818
  900
  987
  1,079
  1,174
  1,270
  1,368
  1,483
  1,869
  2,196
  2,684
  3,222
  3,810
  4,446
  5,128
  5,855
  6,625
  7,438
  8,292
  9,186
  10,121
  11,096
  12,110
  13,166
  14,262
  15,401
  16,584
  17,812
  19,087
Retained Cash Flow (-), $m
  -1,056
  -1,289
  -1,547
  -1,822
  -2,112
  -2,411
  -2,715
  -3,021
  -3,326
  -3,628
  -3,924
  -4,214
  -4,497
  -4,773
  -5,043
  -5,308
  -5,570
  -5,829
  -6,087
  -6,346
  -6,608
  -6,875
  -7,148
  -7,429
  -7,720
  -8,022
  -8,338
  -8,668
  -9,015
  -9,379
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
  -310
  -471
  -647
  -835
  -1,033
  -1,237
  -1,445
  -1,654
  -1,843
  -1,759
  -1,728
  -1,530
  -1,274
  -963
  -597
  -181
  285
  797
  1,351
  1,946
  2,579
  3,247
  3,948
  4,682
  5,446
  6,240
  7,063
  7,916
  8,797
  9,708
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -297
  -431
  -563
  -688
  -801
  -898
  -976
  -1,034
  -1,059
  -922
  -821
  -653
  -485
  -323
  -175
  -46
  62
  147
  208
  247
  267
  269
  259
  238
  212
  182
  152
  122
  96
  73
Current shareholders' claim on cash, %
  75.8
  60.9
  51.2
  44.8
  40.6
  37.9
  36.4
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7
  35.7

Centennial Resource Development, Inc. is an independent oil and natural gas company. The Company is focused on the development of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin. The Company's assets are concentrated in the Delaware Basin, a sub-basin of the Permian Basin. Its properties consist of large, contiguous acreage blocks in Reeves, Ward and Pecos counties in West Texas. As of December 31, 2016, the Company held approximately 92% membership interest in Centennial Resource Production, LLC (CRP). As of December 31, 2016, its portfolio included 106 operated producing horizontal wells. The horizontal wells span an area of approximately 45 miles long by 20 miles wide where it had commercial production in five zones: the 3rd Bone Spring Sandstone, Upper Wolfcamp A, Lower Wolfcamp A, Wolfcamp B and Wolfcamp C.

FINANCIAL RATIOS  of  Centennial Resource Development, Inc. (CDEV)

Valuation Ratios
P/E Ratio -7.4
Price to Sales 17
Price to Book 0.7
Price to Tangible Book
Price to Cash Flow 27.5
Price to Free Cash Flow -2
Growth Rates
Sales Growth Rate 10%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 1913.3%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -13.9%
Ret/ On Assets - 3 Yr. Avg. -8.7%
Return On Total Capital -15.4%
Ret/ On T. Cap. - 3 Yr. Avg. -9.4%
Return On Equity -16.2%
Return On Equity - 3 Yr. Avg. -11%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 79.8%
Gross Margin - 3 Yr. Avg. 77.3%
EBITDA Margin -151.5%
EBITDA Margin - 3 Yr. Avg. -9.4%
Operating Margin -216.2%
Oper. Margin - 3 Yr. Avg. -97.1%
Pre-Tax Margin -230.3%
Pre-Tax Margin - 3 Yr. Avg. -86.4%
Net Profit Margin -229.3%
Net Profit Margin - 3 Yr. Avg. -86%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 2.6%
Payout Ratio 0%

CDEV stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CDEV stock intrinsic value calculation we used $891 million for the last fiscal year's total revenue generated by Centennial Resource Development, Inc.. The default revenue input number comes from 0001 income statement of Centennial Resource Development, 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 CDEV stock valuation model: a) initial revenue growth rate of 33.9% 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 4.3%, whose default value for CDEV is calculated based on our internal credit rating of Centennial Resource Development, 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 Centennial Resource Development, 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 CDEV stock the variable cost ratio is equal to 61.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $61 million in the base year in the intrinsic value calculation for CDEV 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 5.4% for Centennial Resource Development, Inc..

Corporate tax rate of 27% is the nominal tax rate for Centennial Resource Development, 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 CDEV 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 CDEV are equal to 419.4%.

Life of production assets of 11.4 years is the average useful life of capital assets used in Centennial Resource Development, 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 CDEV is equal to -14.7%. 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 - $3100.177 million for Centennial Resource Development, 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 276.688 million for Centennial Resource Development, 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 Centennial Resource Development, Inc. at the current share price and the inputted number of shares is $2.1 billion.

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