Intrinsic value of C&J Energy Services - CJ

Previous Close

$18.02

  Intrinsic Value

$3.84

stock screener

  Rating & Target

str. sell

-79%

Previous close

$18.02

 
Intrinsic value

$3.84

 
Up/down potential

-79%

 
Rating

str. sell

We calculate the intrinsic value of CJ 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 1.2

 

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, %
  56.50
  51.35
  46.72
  42.54
  38.79
  35.41
  32.37
  29.63
  27.17
  24.95
  22.96
  21.16
  19.55
  18.09
  16.78
  15.60
  14.54
  13.59
  12.73
  11.96
  11.26
  10.64
  10.07
  9.56
  9.11
  8.70
  8.33
  7.99
  7.70
  7.43
Revenue, $m
  2,565
  3,882
  5,695
  8,118
  11,266
  15,256
  20,194
  26,178
  33,290
  41,597
  51,146
  61,969
  74,081
  87,483
  102,164
  118,105
  135,282
  153,665
  173,226
  193,938
  215,778
  238,726
  262,770
  287,902
  314,124
  341,444
  369,878
  399,448
  430,187
  462,131
Variable operating expenses, $m
  4,847
  7,322
  10,730
  15,284
  21,202
  28,700
  37,981
  49,227
  62,594
  78,206
  96,126
  116,468
  139,232
  164,420
  192,012
  221,972
  254,254
  288,804
  325,568
  364,496
  405,542
  448,672
  493,860
  541,095
  590,378
  641,724
  695,163
  750,740
  808,511
  868,549
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
  4,847
  7,322
  10,730
  15,284
  21,202
  28,700
  37,981
  49,227
  62,594
  78,206
  96,126
  116,468
  139,232
  164,420
  192,012
  221,972
  254,254
  288,804
  325,568
  364,496
  405,542
  448,672
  493,860
  541,095
  590,378
  641,724
  695,163
  750,740
  808,511
  868,549
Operating income, $m
  -2,283
  -3,441
  -5,035
  -7,166
  -9,935
  -13,444
  -17,787
  -23,049
  -29,304
  -36,609
  -44,980
  -54,499
  -65,150
  -76,936
  -89,848
  -103,867
  -118,972
  -135,139
  -152,342
  -170,557
  -189,764
  -209,946
  -231,091
  -253,193
  -276,254
  -300,280
  -325,286
  -351,291
  -378,324
  -406,417
EBITDA, $m
  -2,054
  -3,109
  -4,561
  -6,501
  -9,023
  -12,218
  -16,172
  -20,965
  -26,660
  -33,313
  -40,960
  -49,628
  -59,328
  -70,061
  -81,818
  -94,585
  -108,340
  -123,062
  -138,728
  -155,315
  -172,806
  -191,184
  -210,439
  -230,566
  -251,566
  -273,445
  -296,217
  -319,898
  -344,515
  -370,098
Interest expense (income), $m
  19
  0
  20
  48
  87
  139
  206
  292
  398
  526
  678
  856
  1,061
  1,293
  1,553
  1,840
  2,154
  2,496
  2,864
  3,258
  3,677
  4,121
  4,589
  5,081
  5,596
  6,135
  6,697
  7,282
  7,892
  8,525
  9,184
Earnings before tax, $m
  -2,283
  -3,461
  -5,084
  -7,253
  -10,074
  -13,650
  -18,078
  -23,447
  -29,830
  -37,288
  -45,837
  -55,560
  -66,443
  -78,489
  -91,687
  -106,021
  -121,468
  -138,003
  -155,600
  -174,235
  -193,885
  -214,535
  -236,172
  -258,789
  -282,389
  -306,977
  -332,568
  -359,183
  -386,850
  -415,602
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
  -2,283
  -3,461
  -5,084
  -7,253
  -10,074
  -13,650
  -18,078
  -23,447
  -29,830
  -37,288
  -45,837
  -55,560
  -66,443
  -78,489
  -91,687
  -106,021
  -121,468
  -138,003
  -155,600
  -174,235
  -193,885
  -214,535
  -236,172
  -258,789
  -282,389
  -306,977
  -332,568
  -359,183
  -386,850
  -415,602

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
  2,517
  3,809
  5,589
  7,966
  11,056
  14,971
  19,817
  25,690
  32,670
  40,821
  50,193
  60,814
  72,700
  85,852
  100,259
  115,903
  132,759
  150,799
  169,996
  190,322
  211,755
  234,275
  257,870
  282,534
  308,267
  335,078
  362,981
  392,000
  422,166
  453,515
Adjusted assets (=assets-cash), $m
  2,517
  3,809
  5,589
  7,966
  11,056
  14,971
  19,817
  25,690
  32,670
  40,821
  50,193
  60,814
  72,700
  85,852
  100,259
  115,903
  132,759
  150,799
  169,996
  190,322
  211,755
  234,275
  257,870
  282,534
  308,267
  335,078
  362,981
  392,000
  422,166
  453,515
Revenue / Adjusted assets
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
  1.019
Average production assets, $m
  1,431
  2,166
  3,178
  4,530
  6,287
  8,513
  11,268
  14,607
  18,576
  23,211
  28,540
  34,579
  41,337
  48,816
  57,008
  65,903
  75,487
  85,745
  96,660
  108,218
  120,404
  133,209
  146,626
  160,649
  175,281
  190,526
  206,392
  222,892
  240,044
  257,869
Working capital, $m
  344
  520
  763
  1,088
  1,510
  2,044
  2,706
  3,508
  4,461
  5,574
  6,854
  8,304
  9,927
  11,723
  13,690
  15,826
  18,128
  20,591
  23,212
  25,988
  28,914
  31,989
  35,211
  38,579
  42,093
  45,754
  49,564
  53,526
  57,645
  61,926
Total debt, $m
  163
  394
  713
  1,139
  1,692
  2,392
  3,260
  4,311
  5,560
  7,020
  8,697
  10,598
  12,726
  15,080
  17,659
  20,459
  23,476
  26,706
  30,142
  33,780
  37,617
  41,648
  45,871
  50,286
  54,892
  59,691
  64,686
  69,881
  75,280
  80,892
Total liabilities, $m
  451
  682
  1,000
  1,426
  1,979
  2,680
  3,547
  4,598
  5,848
  7,307
  8,984
  10,886
  13,013
  15,368
  17,946
  20,747
  23,764
  26,993
  30,429
  34,068
  37,904
  41,935
  46,159
  50,574
  55,180
  59,979
  64,974
  70,168
  75,568
  81,179
Total equity, $m
  2,066
  3,127
  4,588
  6,540
  9,077
  12,291
  16,270
  21,091
  26,822
  33,514
  41,208
  49,928
  59,687
  70,485
  82,313
  95,157
  108,995
  123,806
  139,567
  156,255
  173,851
  192,340
  211,711
  231,960
  253,087
  275,099
  298,007
  321,832
  346,598
  372,335
Total liabilities and equity, $m
  2,517
  3,809
  5,588
  7,966
  11,056
  14,971
  19,817
  25,689
  32,670
  40,821
  50,192
  60,814
  72,700
  85,853
  100,259
  115,904
  132,759
  150,799
  169,996
  190,323
  211,755
  234,275
  257,870
  282,534
  308,267
  335,078
  362,981
  392,000
  422,166
  453,514
Debt-to-equity ratio
  0.080
  0.130
  0.160
  0.170
  0.190
  0.190
  0.200
  0.200
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
Adjusted equity ratio
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -2,283
  -3,461
  -5,084
  -7,253
  -10,074
  -13,650
  -18,078
  -23,447
  -29,830
  -37,288
  -45,837
  -55,560
  -66,443
  -78,489
  -91,687
  -106,021
  -121,468
  -138,003
  -155,600
  -174,235
  -193,885
  -214,535
  -236,172
  -258,789
  -282,389
  -306,977
  -332,568
  -359,183
  -386,850
  -415,602
Depreciation, amort., depletion, $m
  229
  332
  475
  665
  913
  1,226
  1,614
  2,085
  2,643
  3,296
  4,020
  4,870
  5,822
  6,875
  8,029
  9,282
  10,632
  12,077
  13,614
  15,242
  16,958
  18,762
  20,651
  22,627
  24,688
  26,835
  29,069
  31,393
  33,809
  36,320
Funds from operations, $m
  -2,054
  -3,128
  -4,609
  -6,588
  -9,162
  -12,424
  -16,464
  -21,362
  -27,186
  -33,991
  -41,817
  -50,689
  -60,621
  -71,614
  -83,658
  -96,739
  -110,836
  -125,926
  -141,986
  -158,993
  -176,927
  -195,773
  -215,520
  -236,163
  -257,701
  -280,142
  -303,499
  -327,790
  -353,041
  -379,282
Change in working capital, $m
  124
  176
  243
  325
  422
  535
  662
  802
  953
  1,113
  1,280
  1,450
  1,623
  1,796
  1,967
  2,136
  2,302
  2,463
  2,621
  2,775
  2,927
  3,075
  3,222
  3,368
  3,514
  3,661
  3,810
  3,962
  4,119
  4,281
Cash from operations, $m
  -2,178
  -3,305
  -4,852
  -6,913
  -9,584
  -12,959
  -17,126
  -22,164
  -28,139
  -35,104
  -43,096
  -52,140
  -62,244
  -73,409
  -85,625
  -98,875
  -113,138
  -128,390
  -144,607
  -161,768
  -179,854
  -198,848
  -218,742
  -239,530
  -261,215
  -283,803
  -307,309
  -331,752
  -357,159
  -383,563
Maintenance CAPEX, $m
  -129
  -202
  -305
  -448
  -638
  -885
  -1,199
  -1,587
  -2,057
  -2,616
  -3,269
  -4,020
  -4,870
  -5,822
  -6,875
  -8,029
  -9,282
  -10,632
  -12,077
  -13,614
  -15,242
  -16,958
  -18,762
  -20,651
  -22,627
  -24,688
  -26,835
  -29,069
  -31,393
  -33,809
New CAPEX, $m
  -517
  -735
  -1,012
  -1,352
  -1,757
  -2,226
  -2,756
  -3,339
  -3,969
  -4,635
  -5,329
  -6,039
  -6,758
  -7,478
  -8,192
  -8,895
  -9,584
  -10,258
  -10,915
  -11,558
  -12,187
  -12,805
  -13,416
  -14,024
  -14,632
  -15,245
  -15,866
  -16,500
  -17,152
  -17,825
Cash from investing activities, $m
  -646
  -937
  -1,317
  -1,800
  -2,395
  -3,111
  -3,955
  -4,926
  -6,026
  -7,251
  -8,598
  -10,059
  -11,628
  -13,300
  -15,067
  -16,924
  -18,866
  -20,890
  -22,992
  -25,172
  -27,429
  -29,763
  -32,178
  -34,675
  -37,259
  -39,933
  -42,701
  -45,569
  -48,545
  -51,634
Free cash flow, $m
  -2,824
  -4,241
  -6,169
  -8,712
  -11,978
  -16,070
  -21,080
  -27,090
  -34,166
  -42,356
  -51,694
  -62,199
  -73,873
  -86,710
  -100,693
  -115,800
  -132,004
  -149,279
  -167,599
  -186,940
  -207,282
  -228,612
  -250,920
  -274,206
  -298,474
  -323,735
  -350,010
  -377,322
  -405,705
  -435,197
Issuance/(repayment) of debt, $m
  163
  231
  319
  426
  553
  701
  867
  1,051
  1,249
  1,459
  1,677
  1,901
  2,128
  2,354
  2,579
  2,800
  3,017
  3,229
  3,436
  3,638
  3,836
  4,031
  4,224
  4,415
  4,606
  4,799
  4,995
  5,194
  5,400
  5,611
Issuance/(repurchase) of shares, $m
  3,027
  4,522
  6,544
  9,205
  12,611
  16,864
  22,057
  28,268
  35,560
  43,980
  53,530
  64,280
  76,202
  89,287
  103,516
  118,865
  135,307
  152,814
  171,360
  190,923
  211,482
  233,024
  255,543
  279,038
  303,516
  328,988
  355,477
  383,008
  411,615
  441,339
Cash from financing (excl. dividends), $m  
  3,190
  4,753
  6,863
  9,631
  13,164
  17,565
  22,924
  29,319
  36,809
  45,439
  55,207
  66,181
  78,330
  91,641
  106,095
  121,665
  138,324
  156,043
  174,796
  194,561
  215,318
  237,055
  259,767
  283,453
  308,122
  333,787
  360,472
  388,202
  417,015
  446,950
Total cash flow (excl. dividends), $m
  367
  512
  694
  919
  1,186
  1,495
  1,844
  2,229
  2,644
  3,084
  3,514
  3,982
  4,457
  4,931
  5,402
  5,865
  6,320
  6,764
  7,198
  7,621
  8,036
  8,444
  8,847
  9,247
  9,648
  10,052
  10,462
  10,880
  11,310
  11,754
Retained Cash Flow (-), $m
  -3,027
  -4,522
  -6,544
  -9,205
  -12,611
  -16,864
  -22,057
  -28,268
  -35,560
  -43,980
  -53,530
  -64,280
  -76,202
  -89,287
  -103,516
  -118,865
  -135,307
  -152,814
  -171,360
  -190,923
  -211,482
  -233,024
  -255,543
  -279,038
  -303,516
  -328,988
  -355,477
  -383,008
  -411,615
  -441,339
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
  -2,661
  -4,010
  -5,850
  -8,287
  -11,425
  -15,369
  -20,213
  -26,039
  -32,916
  -40,897
  -50,017
  -60,297
  -71,745
  -84,356
  -98,114
  -112,999
  -128,987
  -146,050
  -164,163
  -183,301
  -203,446
  -224,580
  -246,697
  -269,791
  -293,867
  -318,936
  -345,015
  -372,128
  -400,305
  -429,585
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
  -2,551
  -3,671
  -5,091
  -6,823
  -8,856
  -11,154
  -13,656
  -16,275
  -18,909
  -21,441
  -23,752
  -25,731
  -27,279
  -28,320
  -28,805
  -28,716
  -28,065
  -26,897
  -25,276
  -23,292
  -21,043
  -18,634
  -16,169
  -13,741
  -11,432
  -9,305
  -7,405
  -5,757
  -4,370
  -3,235
Current shareholders' claim on cash, %
  28.9
  8.6
  2.7
  0.8
  0.3
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

C&J Energy Services, Inc. is a completion and production services company, which provides well construction, well completions and well services to the oil and gas industry. The Company operates through three segments: Completion Services, Well Support Services and Other Services. The Company also manufactures, repairs and refurbishes equipment used in the oilfield services industry. It operates in various North American onshore basins. Its Completion Services segment includes the hydraulic fracturing services, cased-hole wireline services, coiled tubing services and other well stimulation services. Its Well Support Services segment includes services, including rig services, fluid management services and other special well site services. Other services segment includes directional drilling services, equipment manufacturing and repair, specialty chemicals sales, research and technology, and the Middle East operations, as well as cementing services.

FINANCIAL RATIOS  of  C&J Energy Services (CJ)

Valuation Ratios
P/E Ratio -2.3
Price to Sales 2.2
Price to Book -7.2
Price to Tangible Book
Price to Cash Flow -20.1
Price to Free Cash Flow -13.1
Growth Rates
Sales Growth Rate -44.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -65.1%
Cap. Spend. - 3 Yr. Gr. Rate -17.5%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage -55
Management Effectiveness
Return On Assets -52.1%
Ret/ On Assets - 3 Yr. Avg. -30%
Return On Total Capital -129.7%
Ret/ On T. Cap. - 3 Yr. Avg. -61.1%
Return On Equity -565.3%
Return On Equity - 3 Yr. Avg. -226.4%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 2.5%
Gross Margin - 3 Yr. Avg. 14%
EBITDA Margin -86.2%
EBITDA Margin - 3 Yr. Avg. -39.8%
Operating Margin -95.3%
Oper. Margin - 3 Yr. Avg. -50.1%
Pre-Tax Margin -110.5%
Pre-Tax Margin - 3 Yr. Avg. -56.8%
Net Profit Margin -97.2%
Net Profit Margin - 3 Yr. Avg. -47.6%
Effective Tax Rate 12%
Eff/ Tax Rate - 3 Yr. Avg. 25.8%
Payout Ratio 0%

CJ stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CJ stock intrinsic value calculation we used $1638.739 million for the last fiscal year's total revenue generated by C&J Energy Services. The default revenue input number comes from 0001 income statement of C&J Energy Services. 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 CJ stock valuation model: a) initial revenue growth rate of 56.5% 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 CJ is calculated based on our internal credit rating of C&J Energy Services, 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 C&J Energy Services.
    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 CJ stock the variable cost ratio is equal to 189.6%.

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 CJ 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 12.2% for C&J Energy Services.

Corporate tax rate of 27% is the nominal tax rate for C&J Energy Services. 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 CJ 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 CJ are equal to 55.8%.

Life of production assets of 7.1 years is the average useful life of capital assets used in C&J Energy Services 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 CJ is equal to 13.4%. 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 - $1321.422 million for C&J Energy Services - 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 68.358 million for C&J Energy Services 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 C&J Energy Services at the current share price and the inputted number of shares is $1.2 billion.

RELATED COMPANIES Price Int.Val. Rating
CJ C&J Energy Ser 18.02 3.84  str.sell
FRAC Keane Group 11.72 89.77  str.buy
PDS Precision Dril 2.48 1.06  str.sell
RES RPC 13.44 49.09  str.buy

COMPANY NEWS

▶ Cardinal Energy Ltd. Announces Third Quarter 2018 Results   [Nov-01-18 06:54PM  GlobeNewswire]
▶ Cardinal Energy Ltd. Confirms Monthly Dividend for October   [Oct-12-18 05:00PM  GlobeNewswire]
▶ Houston energy companies announce CFO changes   [Aug-17-18 02:11PM  American City Business Journals]
▶ C&J Energy Services: 2Q Earnings Snapshot   [Aug-02-18 10:35AM  Associated Press]
▶ C&J Energy Services Announces Operational Update   [Jun-11-18 07:00AM  PR Newswire]
▶ 40 Under 40 honoree and energy lawyer has her sights set upward   [Jun-04-18 03:21PM  American City Business Journals]
▶ C&J Energy Services Announces First Quarter 2018 Results   [May-03-18 09:00AM  PR Newswire]
▶ Top 3 Growth Stocks For The Month   [Apr-03-18 12:02PM  Simply Wall St.]
▶ CFO of Houston-based energy services co. resigns   [Mar-20-18 06:04PM  American City Business Journals]
▶ 5 Energy Stocks Set to Trump Estimates This Earnings Season   [Feb-01-18 02:00PM  InvestorPlace]
▶ 4 Energy Stocks With Soaring Estimates Ahead of Q4 Earnings   [Jan-19-18 10:55AM  InvestorPlace]
▶ 5 Oil Stocks Set for Q4 Earnings Beat   [Jan-18-18 08:35AM  InvestorPlace]
▶ Oil Prices Rise Amid U.S. Storm and Protests in Iran   [Jan-04-18 11:34AM  TheStreet.com]
▶ 3 Stocks That Look Just Like ExxonMobil in 1996   [Sep-16-17 12:00PM  Motley Fool]
▶ Today's Bell Ringer, August 14, 2017   [Aug-14-17 09:15AM  CNBC Videos]
▶ C&J Energy Services Announces First Quarter 2017 Results   [May-09-17 09:15AM  PR Newswire]

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