Intrinsic value of Centennial Resource Development - CDEV

Previous Close

$16.38

  Intrinsic Value

$2.69

stock screener

  Rating & Target

str. sell

-84%

Previous close

$16.38

 
Intrinsic value

$2.69

 
Up/down potential

-84%

 
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 4.3

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  688
  1,063
  1,589
  2,306
  3,253
  4,473
  6,004
  7,883
  10,144
  12,812
  15,910
  19,452
  23,446
  27,896
  32,800
  38,155
  43,951
  50,180
  56,832
  63,896
  71,363
  79,226
  87,478
  96,116
  105,139
  114,547
  124,345
  134,539
  145,138
  156,155
Variable operating expenses, $m
  367
  566
  847
  1,229
  1,734
  2,384
  3,200
  4,202
  5,407
  6,829
  8,480
  10,368
  12,497
  14,868
  17,483
  20,337
  23,426
  26,746
  30,291
  34,056
  38,036
  42,227
  46,626
  51,230
  56,039
  61,053
  66,276
  71,709
  77,359
  83,231
Fixed operating expenses, $m
  100
  102
  105
  107
  109
  112
  114
  117
  119
  122
  125
  127
  130
  133
  136
  139
  142
  145
  148
  151
  155
  158
  162
  165
  169
  173
  176
  180
  184
  188
Total operating expenses, $m
  467
  668
  952
  1,336
  1,843
  2,496
  3,314
  4,319
  5,526
  6,951
  8,605
  10,495
  12,627
  15,001
  17,619
  20,476
  23,568
  26,891
  30,439
  34,207
  38,191
  42,385
  46,788
  51,395
  56,208
  61,226
  66,452
  71,889
  77,543
  83,419
Operating income, $m
  221
  394
  638
  970
  1,410
  1,977
  2,690
  3,565
  4,618
  5,862
  7,305
  8,957
  10,819
  12,894
  15,182
  17,679
  20,383
  23,289
  26,392
  29,688
  33,172
  36,840
  40,691
  44,721
  48,931
  53,321
  57,893
  62,649
  67,595
  72,736
EBITDA, $m
  479
  792
  1,233
  1,834
  2,629
  3,653
  4,940
  6,519
  8,420
  10,664
  13,269
  16,247
  19,606
  23,350
  27,475
  31,980
  36,856
  42,096
  47,692
  53,636
  59,918
  66,534
  73,477
  80,745
  88,336
  96,253
  104,497
  113,074
  121,993
  131,263
Interest expense (income), $m
  0
  21
  46
  83
  135
  205
  298
  417
  567
  752
  973
  1,235
  1,538
  1,885
  2,277
  2,713
  3,194
  3,719
  4,287
  4,897
  5,549
  6,242
  6,974
  7,744
  8,553
  9,400
  10,284
  11,206
  12,167
  13,166
  14,205
Earnings before tax, $m
  200
  348
  555
  835
  1,205
  1,679
  2,272
  2,997
  3,866
  4,888
  6,071
  7,418
  8,934
  10,617
  12,469
  14,486
  16,665
  19,002
  21,495
  24,138
  26,930
  29,867
  32,946
  36,168
  39,531
  43,037
  46,686
  50,483
  54,429
  58,531
Tax expense, $m
  54
  94
  150
  226
  325
  453
  614
  809
  1,044
  1,320
  1,639
  2,003
  2,412
  2,867
  3,367
  3,911
  4,499
  5,131
  5,804
  6,517
  7,271
  8,064
  8,895
  9,765
  10,673
  11,620
  12,605
  13,630
  14,696
  15,803
Net income, $m
  146
  254
  405
  610
  880
  1,226
  1,659
  2,188
  2,822
  3,569
  4,432
  5,415
  6,522
  7,751
  9,102
  10,574
  12,165
  13,872
  15,691
  17,621
  19,659
  21,803
  24,051
  26,402
  28,858
  31,417
  34,081
  36,852
  39,734
  42,728

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
  5,780
  8,930
  13,355
  19,378
  27,340
  37,586
  50,451
  66,245
  85,242
  107,667
  133,698
  163,459
  197,023
  234,418
  275,634
  320,629
  369,337
  421,681
  477,576
  536,937
  599,688
  665,761
  735,109
  807,698
  883,518
  962,579
  1,044,914
  1,130,578
  1,219,650
  1,312,228
Adjusted assets (=assets-cash), $m
  5,780
  8,930
  13,355
  19,378
  27,340
  37,586
  50,451
  66,245
  85,242
  107,667
  133,698
  163,459
  197,023
  234,418
  275,634
  320,629
  369,337
  421,681
  477,576
  536,937
  599,688
  665,761
  735,109
  807,698
  883,518
  962,579
  1,044,914
  1,130,578
  1,219,650
  1,312,228
Revenue / Adjusted assets
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
Average production assets, $m
  3,171
  4,899
  7,327
  10,631
  14,998
  20,619
  27,677
  36,341
  46,763
  59,065
  73,345
  89,672
  108,085
  128,599
  151,210
  175,894
  202,615
  231,330
  261,993
  294,558
  328,983
  365,230
  403,273
  443,095
  484,689
  528,061
  573,229
  620,224
  669,088
  719,875
Working capital, $m
  -184
  -284
  -424
  -616
  -869
  -1,194
  -1,603
  -2,105
  -2,708
  -3,421
  -4,248
  -5,194
  -6,260
  -7,448
  -8,758
  -10,187
  -11,735
  -13,398
  -15,174
  -17,060
  -19,054
  -21,153
  -23,357
  -25,663
  -28,072
  -30,584
  -33,200
  -35,922
  -38,752
  -41,693
Total debt, $m
  857
  1,538
  2,493
  3,794
  5,514
  7,727
  10,506
  13,918
  18,021
  22,865
  28,487
  34,916
  42,166
  50,243
  59,146
  68,864
  79,385
  90,692
  102,765
  115,587
  129,141
  143,413
  158,392
  174,071
  190,448
  207,526
  225,310
  243,814
  263,053
  283,050
Total liabilities, $m
  1,249
  1,929
  2,885
  4,186
  5,905
  8,119
  10,897
  14,309
  18,412
  23,256
  28,879
  35,307
  42,557
  50,634
  59,537
  69,256
  79,777
  91,083
  103,156
  115,978
  129,533
  143,804
  158,783
  174,463
  190,840
  207,917
  225,701
  244,205
  263,444
  283,441
Total equity, $m
  4,532
  7,001
  10,471
  15,192
  21,434
  29,467
  39,554
  51,936
  66,829
  84,411
  104,819
  128,152
  154,466
  183,784
  216,097
  251,373
  289,560
  330,598
  374,420
  420,959
  470,155
  521,957
  576,325
  633,235
  692,678
  754,662
  819,212
  886,373
  956,206
  1,028,787
Total liabilities and equity, $m
  5,781
  8,930
  13,356
  19,378
  27,339
  37,586
  50,451
  66,245
  85,241
  107,667
  133,698
  163,459
  197,023
  234,418
  275,634
  320,629
  369,337
  421,681
  477,576
  536,937
  599,688
  665,761
  735,108
  807,698
  883,518
  962,579
  1,044,913
  1,130,578
  1,219,650
  1,312,228
Debt-to-equity ratio
  0.190
  0.220
  0.240
  0.250
  0.260
  0.260
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.280
  0.280
  0.280
  0.280
Adjusted equity ratio
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  146
  254
  405
  610
  880
  1,226
  1,659
  2,188
  2,822
  3,569
  4,432
  5,415
  6,522
  7,751
  9,102
  10,574
  12,165
  13,872
  15,691
  17,621
  19,659
  21,803
  24,051
  26,402
  28,858
  31,417
  34,081
  36,852
  39,734
  42,728
Depreciation, amort., depletion, $m
  258
  398
  596
  864
  1,219
  1,676
  2,250
  2,955
  3,802
  4,802
  5,963
  7,290
  8,787
  10,455
  12,294
  14,300
  16,473
  18,807
  21,300
  23,948
  26,747
  29,693
  32,786
  36,024
  39,406
  42,932
  46,604
  50,425
  54,397
  58,526
Funds from operations, $m
  404
  652
  1,000
  1,474
  2,099
  2,902
  3,909
  5,143
  6,624
  8,371
  10,395
  12,706
  15,309
  18,206
  21,396
  24,875
  28,638
  32,679
  36,991
  41,569
  46,405
  51,496
  56,837
  62,426
  68,263
  74,349
  80,685
  87,277
  94,131
  101,254
Change in working capital, $m
  -69
  -100
  -141
  -191
  -253
  -326
  -409
  -502
  -604
  -713
  -827
  -946
  -1,066
  -1,188
  -1,310
  -1,430
  -1,548
  -1,663
  -1,776
  -1,886
  -1,994
  -2,099
  -2,203
  -2,306
  -2,409
  -2,512
  -2,616
  -2,722
  -2,830
  -2,941
Cash from operations, $m
  473
  752
  1,141
  1,665
  2,352
  3,228
  4,318
  5,645
  7,228
  9,083
  11,222
  13,651
  16,375
  19,394
  22,705
  26,304
  30,186
  34,342
  38,767
  43,455
  48,399
  53,595
  59,041
  64,733
  70,672
  76,861
  83,301
  89,999
  96,961
  104,196
Maintenance CAPEX, $m
  -161
  -258
  -398
  -596
  -864
  -1,219
  -1,676
  -2,250
  -2,955
  -3,802
  -4,802
  -5,963
  -7,290
  -8,787
  -10,455
  -12,294
  -14,300
  -16,473
  -18,807
  -21,300
  -23,948
  -26,747
  -29,693
  -32,786
  -36,024
  -39,406
  -42,932
  -46,604
  -50,425
  -54,397
New CAPEX, $m
  -1,188
  -1,728
  -2,428
  -3,304
  -4,368
  -5,621
  -7,058
  -8,665
  -10,421
  -12,302
  -14,280
  -16,326
  -18,413
  -20,515
  -22,611
  -24,684
  -26,721
  -28,715
  -30,663
  -32,565
  -34,424
  -36,247
  -38,043
  -39,822
  -41,594
  -43,372
  -45,168
  -46,995
  -48,864
  -50,788
Cash from investing activities, $m
  -1,349
  -1,986
  -2,826
  -3,900
  -5,232
  -6,840
  -8,734
  -10,915
  -13,376
  -16,104
  -19,082
  -22,289
  -25,703
  -29,302
  -33,066
  -36,978
  -41,021
  -45,188
  -49,470
  -53,865
  -58,372
  -62,994
  -67,736
  -72,608
  -77,618
  -82,778
  -88,100
  -93,599
  -99,289
  -105,185
Free cash flow, $m
  -877
  -1,234
  -1,685
  -2,234
  -2,880
  -3,612
  -4,416
  -5,270
  -6,148
  -7,021
  -7,861
  -8,638
  -9,328
  -9,908
  -10,361
  -10,673
  -10,836
  -10,846
  -10,703
  -10,410
  -9,973
  -9,399
  -8,696
  -7,875
  -6,946
  -5,917
  -4,799
  -3,600
  -2,328
  -989
Issuance/(repayment) of debt, $m
  466
  680
  956
  1,301
  1,720
  2,213
  2,779
  3,412
  4,103
  4,844
  5,623
  6,428
  7,250
  8,077
  8,903
  9,719
  10,521
  11,306
  12,073
  12,822
  13,554
  14,272
  14,979
  15,679
  16,377
  17,077
  17,784
  18,504
  19,239
  19,997
Issuance/(repurchase) of shares, $m
  1,551
  2,216
  3,064
  4,112
  5,362
  6,807
  8,428
  10,195
  12,071
  14,013
  15,977
  17,917
  19,793
  21,567
  23,211
  24,701
  26,022
  27,166
  28,130
  28,918
  29,537
  29,999
  30,318
  30,507
  30,585
  30,567
  30,470
  30,309
  30,099
  29,854
Cash from financing (excl. dividends), $m  
  2,017
  2,896
  4,020
  5,413
  7,082
  9,020
  11,207
  13,607
  16,174
  18,857
  21,600
  24,345
  27,043
  29,644
  32,114
  34,420
  36,543
  38,472
  40,203
  41,740
  43,091
  44,271
  45,297
  46,186
  46,962
  47,644
  48,254
  48,813
  49,338
  49,851
Total cash flow (excl. dividends), $m
  1,141
  1,663
  2,335
  3,179
  4,202
  5,408
  6,790
  8,336
  10,026
  11,836
  13,739
  15,707
  17,715
  19,737
  21,753
  23,747
  25,708
  27,626
  29,500
  31,330
  33,119
  34,873
  36,600
  38,311
  40,016
  41,727
  43,455
  45,212
  47,011
  48,861
Retained Cash Flow (-), $m
  -1,697
  -2,470
  -3,469
  -4,722
  -6,242
  -8,033
  -10,086
  -12,383
  -14,893
  -17,582
  -20,408
  -23,332
  -26,314
  -29,318
  -32,313
  -35,276
  -38,188
  -41,038
  -43,821
  -46,539
  -49,196
  -51,802
  -54,368
  -56,910
  -59,443
  -61,984
  -64,551
  -67,161
  -69,832
  -72,581
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
  -557
  -807
  -1,134
  -1,543
  -2,040
  -2,625
  -3,296
  -4,047
  -4,867
  -5,746
  -6,670
  -7,625
  -8,600
  -9,581
  -10,560
  -11,528
  -12,480
  -13,411
  -14,321
  -15,209
  -16,078
  -16,929
  -17,768
  -18,599
  -19,426
  -20,257
  -21,096
  -21,949
  -22,822
  -23,720
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
  -534
  -739
  -987
  -1,271
  -1,581
  -1,905
  -2,227
  -2,529
  -2,796
  -3,012
  -3,167
  -3,254
  -3,270
  -3,217
  -3,100
  -2,930
  -2,715
  -2,470
  -2,205
  -1,933
  -1,663
  -1,405
  -1,165
  -947
  -756
  -591
  -453
  -340
  -249
  -179
Current shareholders' claim on cash, %
  73.6
  55.7
  43.3
  34.4
  27.9
  23.1
  19.5
  16.7
  14.5
  12.7
  11.3
  10.2
  9.2
  8.5
  7.8
  7.3
  6.8
  6.4
  6.1
  5.8
  5.5
  5.3
  5.1
  4.9
  4.8
  4.6
  4.5
  4.4
  4.3
  4.2

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 (CDEV)

Valuation Ratios
P/E Ratio -15.9
Price to Sales 36.4
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 59.1
Price to Free Cash Flow -4.3
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 $429.902 million for the last fiscal year's total revenue generated by Centennial Resource Development. The default revenue input number comes from 0001 income statement of Centennial Resource Development. 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 60% 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, 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.
    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 53.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $98 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.

Corporate tax rate of 27% is the nominal tax rate for Centennial Resource Development. 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 461%.

Life of production assets of 12.3 years is the average useful life of capital assets used in Centennial Resource Development 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 -26.7%. 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 - $2834.225 million for Centennial Resource Development - 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 263.792 million for Centennial Resource Development 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 at the current share price and the inputted number of shares is $4.3 billion.

RELATED COMPANIES Price Int.Val. Rating
WPX WPX Energy 14.08 2.46  str.sell
REI Ring Energy 7.18 1.48  str.sell
LPI Laredo Petrole 5.29 0.81  str.sell
NBL Noble Energy 24.74 4.43  str.sell
MCEP Mid-Con Energy 1.11 0.67  str.sell
EGN Energen 69.90 8.82  str.sell

COMPANY NEWS

▶ 3 High-Octane Growth Stocks to Put on Your Watchlist   [Jul-18-18 05:10PM  Motley Fool]
▶ 3 Stocks That Could Double Your Money   [07:32AM  Motley Fool]
▶ Best NasdaqCM Growth Stocks   [Jun-19-18 12:02PM  Simply Wall St.]
▶ Value-Adding Growth Stocks To Buy Now   [May-16-18 12:02PM  Simply Wall St.]
▶ 9 'High Beta' Energy Stocks That Can Soar   [Apr-16-18 06:00AM  Investopedia]
▶ 3 Growth Stocks for In-the-Know Investors   [Apr-06-18 06:20AM  Motley Fool]
▶ Best-In-Class NasdaqCM Growth Stocks   [Apr-01-18 12:02PM  Simply Wall St.]
▶ Are Shale Drillers Unsuspectingly Running Out of Fuel?   [Mar-06-18 10:20AM  Motley Fool]
▶ Jagged Peak Energy: The Newest Energy Company on the Block   [Jan-17-18 09:02AM  Market Realist]
▶ What Could Drive Centennial Resources Revenues for 2017   [Jan-16-18 06:00PM  Market Realist]
▶ Forget Facebook: Here Are 3 Better Growth Stocks   [Dec-23-17 06:00PM  Motley Fool]
▶ 3 Stocks That Look Like Apple in 2008   [Dec-03-17 09:02AM  Motley Fool]
▶ 3 Growth Stocks for Streetwise Investors   [Aug-02-17 10:00AM  Motley Fool]
▶ 3 Stocks with Universal Display-like Return Potential   [Jun-18-17 02:32PM  Motley Fool]
▶ 3 Growth Stocks for June   [Jun-08-17 11:31AM  Motley Fool]
▶ 3 Hidden Gems in the Oil Sector   [May-09-17 08:11AM  Motley Fool]
▶ Baker Hughes U.S. Rig Count Climbs by 7   [May-05-17 01:23PM  TheStreet.com]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.