Intrinsic value of Cypress Energy Partners, L.P. - CELP

Previous Close

$7.05

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$7.05

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of CELP 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, %
  9.10
  8.69
  8.32
  7.99
  7.69
  7.42
  7.18
  6.96
  6.76
  6.59
  6.43
  6.29
  6.16
  6.04
  5.94
  5.84
  5.76
  5.68
  5.62
  5.55
  5.50
  5.45
  5.40
  5.36
  5.33
  5.29
  5.26
  5.24
  5.21
  5.19
Revenue, $m
  312
  339
  367
  397
  427
  459
  492
  526
  562
  599
  637
  677
  719
  762
  808
  855
  904
  955
  1,009
  1,065
  1,124
  1,185
  1,249
  1,316
  1,386
  1,460
  1,536
  1,617
  1,701
  1,789
Variable operating expenses, $m
  313
  340
  368
  396
  426
  457
  490
  523
  558
  594
  624
  663
  704
  747
  791
  837
  885
  936
  988
  1,043
  1,101
  1,161
  1,223
  1,289
  1,358
  1,429
  1,505
  1,583
  1,666
  1,753
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
  313
  340
  368
  396
  426
  457
  490
  523
  558
  594
  624
  663
  704
  747
  791
  837
  885
  936
  988
  1,043
  1,101
  1,161
  1,223
  1,289
  1,358
  1,429
  1,505
  1,583
  1,666
  1,753
Operating income, $m
  -1
  -1
  0
  0
  1
  2
  2
  3
  4
  4
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  26
  27
  29
  30
  32
  33
  35
  37
EBITDA, $m
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
  26
  27
  29
  30
  32
  34
  36
  38
  40
  42
  44
  46
  49
  51
  54
  57
Interest expense (income), $m
  6
  7
  7
  8
  9
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
  26
  27
  29
  30
  32
  34
  36
  38
  40
  42
  44
Earnings before tax, $m
  -9
  -8
  -8
  -8
  -9
  -9
  -9
  -9
  -9
  -9
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -7
  -7
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
  -9
  -8
  -8
  -8
  -9
  -9
  -9
  -9
  -9
  -9
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -7
  -7

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
  170
  184
  200
  216
  232
  249
  267
  286
  305
  325
  346
  368
  391
  414
  439
  465
  491
  519
  548
  579
  611
  644
  679
  715
  753
  793
  835
  879
  925
  973
Adjusted assets (=assets-cash), $m
  170
  184
  200
  216
  232
  249
  267
  286
  305
  325
  346
  368
  391
  414
  439
  465
  491
  519
  548
  579
  611
  644
  679
  715
  753
  793
  835
  879
  925
  973
Revenue / Adjusted assets
  1.835
  1.842
  1.835
  1.838
  1.841
  1.843
  1.843
  1.839
  1.843
  1.843
  1.841
  1.840
  1.839
  1.841
  1.841
  1.839
  1.841
  1.840
  1.841
  1.839
  1.840
  1.840
  1.839
  1.841
  1.841
  1.841
  1.840
  1.840
  1.839
  1.839
Average production assets, $m
  61
  66
  71
  77
  83
  89
  95
  102
  109
  116
  124
  131
  139
  148
  157
  166
  175
  185
  196
  207
  218
  230
  242
  255
  269
  283
  298
  314
  330
  347
Working capital, $m
  32
  35
  38
  41
  44
  47
  51
  54
  58
  62
  66
  70
  74
  79
  83
  88
  93
  98
  104
  110
  116
  122
  129
  136
  143
  150
  158
  167
  175
  184
Total debt, $m
  133
  147
  161
  175
  190
  205
  221
  238
  256
  274
  292
  312
  332
  354
  376
  399
  423
  448
  474
  502
  530
  560
  592
  625
  659
  695
  732
  772
  813
  856
Total liabilities, $m
  153
  166
  180
  194
  209
  224
  241
  257
  275
  293
  312
  331
  352
  373
  395
  418
  442
  467
  494
  521
  550
  580
  611
  644
  678
  714
  751
  791
  832
  875
Total equity, $m
  17
  18
  20
  22
  23
  25
  27
  29
  31
  33
  35
  37
  39
  41
  44
  46
  49
  52
  55
  58
  61
  64
  68
  72
  75
  79
  83
  88
  92
  97
Total liabilities and equity, $m
  170
  184
  200
  216
  232
  249
  268
  286
  306
  326
  347
  368
  391
  414
  439
  464
  491
  519
  549
  579
  611
  644
  679
  716
  753
  793
  834
  879
  924
  972
Debt-to-equity ratio
  7.870
  7.960
  8.040
  8.110
  8.170
  8.230
  8.280
  8.330
  8.370
  8.410
  8.450
  8.480
  8.510
  8.540
  8.560
  8.590
  8.610
  8.630
  8.650
  8.670
  8.690
  8.700
  8.720
  8.730
  8.750
  8.760
  8.770
  8.780
  8.790
  8.800
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -9
  -8
  -8
  -8
  -9
  -9
  -9
  -9
  -9
  -9
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -7
  -7
Depreciation, amort., depletion, $m
  11
  12
  12
  12
  13
  13
  13
  14
  14
  15
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  15
  16
  17
  18
  19
  20
Funds from operations, $m
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
Change in working capital, $m
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
Cash from operations, $m
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
Maintenance CAPEX, $m
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
New CAPEX, $m
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -16
  -17
Cash from investing activities, $m
  -8
  -8
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -16
  -18
  -18
  -20
  -20
  -21
  -22
  -23
  -25
  -25
  -27
  -29
  -29
  -31
  -33
  -34
  -36
Free cash flow, $m
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -31
  -32
Issuance/(repayment) of debt, $m
  -3
  13
  14
  14
  15
  16
  16
  17
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  31
  33
  34
  36
  38
  39
  41
  43
Issuance/(repurchase) of shares, $m
  26
  10
  10
  10
  10
  10
  11
  11
  11
  11
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  11
  11
  12
Cash from financing (excl. dividends), $m  
  23
  23
  24
  24
  25
  26
  27
  28
  28
  29
  23
  24
  24
  26
  27
  28
  30
  31
  32
  34
  36
  38
  39
  41
  43
  45
  48
  50
  52
  55
Total cash flow (excl. dividends), $m
  14
  15
  15
  15
  16
  16
  16
  17
  17
  17
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
Retained Cash Flow (-), $m
  -26
  -10
  -10
  -10
  -10
  -10
  -11
  -11
  -11
  -11
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
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
  -11
  5
  5
  5
  6
  6
  6
  6
  6
  6
  6
  6
  6
  7
  7
  7
  7
  7
  8
  8
  8
  8
  9
  9
  9
  9
  10
  10
  11
  11
Discount rate, %
  12.30
  12.92
  13.56
  14.24
  14.95
  15.70
  16.48
  17.31
  18.17
  19.08
  20.04
  21.04
  22.09
  23.19
  24.35
  25.57
  26.85
  28.19
  29.60
  31.08
  32.64
  34.27
  35.98
  37.78
  39.67
  41.65
  43.73
  45.92
  48.22
  50.63
PV of cash for distribution, $m
  -10
  4
  4
  3
  3
  2
  2
  2
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  31.9
  20.9
  13.9
  9.4
  6.5
  4.6
  3.3
  2.3
  1.7
  1.5
  1.4
  1.2
  1.1
  1.0
  0.9
  0.8
  0.7
  0.6
  0.6
  0.5
  0.4
  0.4
  0.3
  0.3
  0.3
  0.2
  0.2
  0.2
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Cypress Energy Partners, L.P. is a limited partnership company, which serves energy companies throughout North America. The Company provides independent pipeline inspection and integrity services to producers and pipeline companies and water and environmental services with salt water disposal (SWD) facilities to the United States onshore oil and natural gas producers and trucking companies. It operates through three segments: Pipeline Inspection Services (PIS), which provides independent inspection services to various energy, public utility and pipeline companies in both the United States and Canada; Integrity Services (IS), which provides hydrostatic testing services to natural gas and petroleum companies and pipeline construction companies of newly constructed and existing natural gas and petroleum pipelines, and Water and Environmental Services (W&ES), which provides SWD services to oil and natural gas producers and trucking companies.

FINANCIAL RATIOS  of  Cypress Energy Partners, L.P. (CELP)

Valuation Ratios
P/E Ratio 41.8
Price to Sales 0.3
Price to Book 6
Price to Tangible Book
Price to Cash Flow 3.3
Price to Free Cash Flow 3.5
Growth Rates
Sales Growth Rate -19.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -50%
Cap. Spend. - 3 Yr. Gr. Rate -24.2%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 971.4%
Total Debt to Equity 971.4%
Interest Coverage 0
Management Effectiveness
Return On Assets 4.9%
Ret/ On Assets - 3 Yr. Avg. 0.2%
Return On Total Capital 1.3%
Ret/ On T. Cap. - 3 Yr. Avg. -4.5%
Return On Equity 8.9%
Return On Equity - 3 Yr. Avg. -11.4%
Asset Turnover 1.7
Profitability Ratios
Gross Margin 11.7%
Gross Margin - 3 Yr. Avg. 12%
EBITDA Margin 1.3%
EBITDA Margin - 3 Yr. Avg. 1.4%
Operating Margin -0.7%
Oper. Margin - 3 Yr. Avg. -0.4%
Pre-Tax Margin -2.7%
Pre-Tax Margin - 3 Yr. Avg. -1.7%
Net Profit Margin 0.7%
Net Profit Margin - 3 Yr. Avg. -1.1%
Effective Tax Rate -12.5%
Eff/ Tax Rate - 3 Yr. Avg. 2.5%
Payout Ratio 0%

CELP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CELP stock intrinsic value calculation we used $286 million for the last fiscal year's total revenue generated by Cypress Energy Partners, L.P.. The default revenue input number comes from 0001 income statement of Cypress Energy Partners, L.P.. 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 CELP stock valuation model: a) initial revenue growth rate of 9.1% 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 12.3%, whose default value for CELP is calculated based on our internal credit rating of Cypress Energy Partners, L.P., 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 Cypress Energy Partners, L.P..
    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 CELP stock the variable cost ratio is equal to 100.7%.

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 CELP 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 Cypress Energy Partners, L.P..

Corporate tax rate of 27% is the nominal tax rate for Cypress Energy Partners, L.P.. 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 CELP 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 CELP are equal to 19.4%.

Life of production assets of 17.4 years is the average useful life of capital assets used in Cypress Energy Partners, L.P. 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 CELP is equal to 10.3%. 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 - $0 million for Cypress Energy Partners, L.P. - 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 11.946 million for Cypress Energy Partners, L.P. 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 Cypress Energy Partners, L.P. at the current share price and the inputted number of shares is $0.1 billion.

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