Intrinsic value of Core Laboratories N.V. - CLB

Previous Close

$67.21

  Intrinsic Value

$21.12

stock screener

  Rating & Target

str. sell

-69%

Previous close

$67.21

 
Intrinsic value

$21.12

 
Up/down potential

-69%

 
Rating

str. sell

We calculate the intrinsic value of CLB 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 3.0

 

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
  715
  731
  750
  771
  795
  820
  848
  879
  911
  946
  984
  1,023
  1,066
  1,111
  1,159
  1,210
  1,264
  1,321
  1,381
  1,444
  1,511
  1,582
  1,656
  1,734
  1,817
  1,904
  1,995
  2,092
  2,193
  2,299
Variable operating expenses, $m
  593
  606
  621
  638
  657
  677
  699
  723
  749
  777
  784
  816
  849
  885
  924
  964
  1,007
  1,052
  1,100
  1,151
  1,204
  1,260
  1,320
  1,382
  1,448
  1,517
  1,590
  1,667
  1,748
  1,832
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
  593
  606
  621
  638
  657
  677
  699
  723
  749
  777
  784
  816
  849
  885
  924
  964
  1,007
  1,052
  1,100
  1,151
  1,204
  1,260
  1,320
  1,382
  1,448
  1,517
  1,590
  1,667
  1,748
  1,832
Operating income, $m
  122
  125
  129
  133
  138
  143
  149
  155
  162
  169
  200
  208
  216
  226
  235
  246
  257
  268
  280
  293
  307
  321
  336
  352
  369
  387
  405
  425
  445
  467
EBITDA, $m
  161
  165
  169
  174
  179
  185
  192
  198
  206
  214
  222
  231
  241
  251
  262
  273
  285
  298
  312
  326
  341
  357
  374
  392
  410
  430
  450
  472
  495
  519
Interest expense (income), $m
  11
  16
  16
  17
  18
  18
  19
  20
  21
  22
  24
  25
  26
  28
  29
  31
  33
  35
  37
  39
  41
  44
  46
  49
  52
  55
  58
  61
  65
  68
  72
Earnings before tax, $m
  106
  109
  112
  116
  120
  124
  129
  134
  139
  145
  175
  182
  189
  196
  204
  213
  222
  231
  241
  252
  263
  275
  287
  300
  314
  329
  344
  360
  377
  395
Tax expense, $m
  29
  29
  30
  31
  32
  34
  35
  36
  38
  39
  47
  49
  51
  53
  55
  57
  60
  62
  65
  68
  71
  74
  78
  81
  85
  89
  93
  97
  102
  107
Net income, $m
  78
  80
  82
  85
  88
  91
  94
  98
  102
  106
  128
  133
  138
  143
  149
  155
  162
  169
  176
  184
  192
  201
  210
  219
  229
  240
  251
  263
  275
  288

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
  662
  677
  695
  714
  736
  760
  786
  814
  844
  876
  911
  948
  987
  1,029
  1,073
  1,120
  1,170
  1,223
  1,278
  1,337
  1,399
  1,464
  1,533
  1,606
  1,682
  1,763
  1,848
  1,937
  2,030
  2,129
Adjusted assets (=assets-cash), $m
  662
  677
  695
  714
  736
  760
  786
  814
  844
  876
  911
  948
  987
  1,029
  1,073
  1,120
  1,170
  1,223
  1,278
  1,337
  1,399
  1,464
  1,533
  1,606
  1,682
  1,763
  1,848
  1,937
  2,030
  2,129
Revenue / Adjusted assets
  1.080
  1.080
  1.079
  1.080
  1.080
  1.079
  1.079
  1.080
  1.079
  1.080
  1.080
  1.079
  1.080
  1.080
  1.080
  1.080
  1.080
  1.080
  1.081
  1.080
  1.080
  1.081
  1.080
  1.080
  1.080
  1.080
  1.080
  1.080
  1.080
  1.080
Average production assets, $m
  233
  238
  245
  251
  259
  267
  277
  286
  297
  308
  321
  334
  348
  362
  378
  394
  412
  430
  450
  471
  493
  516
  540
  565
  592
  621
  650
  682
  715
  750
Working capital, $m
  117
  120
  123
  127
  130
  135
  139
  144
  149
  155
  161
  168
  175
  182
  190
  198
  207
  217
  226
  237
  248
  259
  272
  284
  298
  312
  327
  343
  360
  377
Total debt, $m
  300
  311
  324
  339
  356
  374
  393
  414
  437
  462
  488
  516
  546
  578
  611
  647
  685
  725
  767
  811
  858
  908
  960
  1,015
  1,073
  1,134
  1,198
  1,266
  1,337
  1,412
Total liabilities, $m
  502
  513
  527
  541
  558
  576
  595
  617
  640
  664
  690
  718
  748
  780
  814
  849
  887
  927
  969
  1,013
  1,060
  1,110
  1,162
  1,217
  1,275
  1,336
  1,400
  1,468
  1,539
  1,614
Total equity, $m
  160
  164
  168
  173
  178
  184
  190
  197
  204
  212
  220
  229
  239
  249
  260
  271
  283
  296
  309
  324
  339
  354
  371
  389
  407
  427
  447
  469
  491
  515
Total liabilities and equity, $m
  662
  677
  695
  714
  736
  760
  785
  814
  844
  876
  910
  947
  987
  1,029
  1,074
  1,120
  1,170
  1,223
  1,278
  1,337
  1,399
  1,464
  1,533
  1,606
  1,682
  1,763
  1,847
  1,937
  2,030
  2,129
Debt-to-equity ratio
  1.870
  1.900
  1.930
  1.960
  2.000
  2.030
  2.070
  2.100
  2.140
  2.180
  2.210
  2.250
  2.290
  2.320
  2.350
  2.390
  2.420
  2.450
  2.480
  2.510
  2.530
  2.560
  2.590
  2.610
  2.640
  2.660
  2.680
  2.700
  2.720
  2.740
Adjusted equity ratio
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  78
  80
  82
  85
  88
  91
  94
  98
  102
  106
  128
  133
  138
  143
  149
  155
  162
  169
  176
  184
  192
  201
  210
  219
  229
  240
  251
  263
  275
  288
Depreciation, amort., depletion, $m
  39
  40
  40
  41
  41
  42
  42
  43
  44
  45
  22
  23
  24
  25
  26
  27
  29
  30
  31
  33
  34
  36
  37
  39
  41
  43
  45
  47
  50
  52
Funds from operations, $m
  117
  119
  122
  125
  129
  132
  137
  141
  146
  151
  150
  156
  162
  168
  175
  183
  190
  199
  207
  217
  226
  236
  247
  259
  270
  283
  296
  310
  325
  340
Change in working capital, $m
  2
  3
  3
  3
  4
  4
  5
  5
  5
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  14
  15
  16
  17
  17
Cash from operations, $m
  115
  117
  119
  122
  125
  128
  132
  136
  140
  145
  144
  149
  155
  161
  167
  174
  182
  189
  198
  206
  215
  225
  235
  246
  257
  269
  281
  294
  308
  323
Maintenance CAPEX, $m
  -16
  -16
  -17
  -17
  -17
  -18
  -19
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -34
  -36
  -37
  -39
  -41
  -43
  -45
  -47
  -50
New CAPEX, $m
  -5
  -5
  -6
  -7
  -8
  -8
  -9
  -10
  -11
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -33
  -35
Cash from investing activities, $m
  -21
  -21
  -23
  -24
  -25
  -26
  -28
  -29
  -31
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -48
  -50
  -52
  -55
  -57
  -60
  -63
  -66
  -69
  -73
  -76
  -80
  -85
Free cash flow, $m
  94
  95
  96
  98
  100
  102
  104
  107
  110
  113
  110
  114
  118
  122
  127
  132
  137
  142
  148
  154
  161
  168
  175
  183
  191
  199
  208
  218
  228
  238
Issuance/(repayment) of debt, $m
  10
  12
  13
  15
  16
  18
  20
  21
  23
  25
  26
  28
  30
  32
  34
  36
  38
  40
  42
  45
  47
  50
  52
  55
  58
  61
  64
  68
  71
  75
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  10
  12
  13
  15
  16
  18
  20
  21
  23
  25
  26
  28
  30
  32
  34
  36
  38
  40
  42
  45
  47
  50
  52
  55
  58
  61
  64
  68
  71
  75
Total cash flow (excl. dividends), $m
  104
  107
  110
  113
  116
  120
  124
  128
  133
  138
  136
  142
  148
  154
  160
  167
  174
  182
  190
  199
  208
  217
  227
  238
  249
  260
  273
  285
  299
  313
Retained Cash Flow (-), $m
  -3
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -19
  -21
  -22
  -23
  -24
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
  100
  103
  105
  108
  111
  114
  118
  121
  125
  130
  128
  133
  138
  144
  150
  156
  162
  169
  177
  185
  193
  201
  211
  220
  230
  241
  252
  264
  276
  289
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
  94
  89
  84
  79
  74
  68
  63
  57
  52
  46
  39
  34
  30
  25
  21
  18
  14
  12
  9
  7
  5
  4
  3
  2
  1
  1
  1
  0
  0
  0
Current shareholders' claim on cash, %
  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
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Core Laboratories N.V. provides reservoir description, production enhancement and reservoir management services to the oil and gas industry. The Company operates through three segments: Reservoir Description, Production Enhancement and Reservoir Management. The Reservoir Description segment encompasses the characterization of petroleum reservoir rock, fluid and gas samples. It provides analytical and field services to characterize properties of crude oil and petroleum products to the oil and gas industry. The Production Enhancement segment includes products and services relating to reservoir well completions, perforations, stimulations and production. It provides integrated diagnostic services to evaluate the effectiveness of well completions. The Reservoir Management segment combines and integrates information from reservoir description and production enhancement services to increase production and recovery of oil and gas from its clients' reservoirs.

FINANCIAL RATIOS  of  Core Laboratories N.V. (CLB)

Valuation Ratios
P/E Ratio 46.4
Price to Sales 5
Price to Book 19.7
Price to Tangible Book
Price to Cash Flow 22.5
Price to Free Cash Flow 24.7
Growth Rates
Sales Growth Rate -25.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -50%
Cap. Spend. - 3 Yr. Gr. Rate -21%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 143%
Total Debt to Equity 143%
Interest Coverage 8
Management Effectiveness
Return On Assets 12.3%
Ret/ On Assets - 3 Yr. Avg. 23.7%
Return On Total Capital 16.6%
Ret/ On T. Cap. - 3 Yr. Avg. 34.3%
Return On Equity 104.9%
Return On Equity - 3 Yr. Avg. 233.2%
Asset Turnover 1
Profitability Ratios
Gross Margin 25.5%
Gross Margin - 3 Yr. Avg. 32.5%
EBITDA Margin 19%
EBITDA Margin - 3 Yr. Avg. 25.6%
Operating Margin 14.5%
Oper. Margin - 3 Yr. Avg. 22.2%
Pre-Tax Margin 12.6%
Pre-Tax Margin - 3 Yr. Avg. 20.7%
Net Profit Margin 10.8%
Net Profit Margin - 3 Yr. Avg. 16.3%
Effective Tax Rate 14.7%
Eff/ Tax Rate - 3 Yr. Avg. 20.1%
Payout Ratio 148.4%

CLB stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CLB stock intrinsic value calculation we used $701 million for the last fiscal year's total revenue generated by Core Laboratories N.V.. The default revenue input number comes from 0001 income statement of Core Laboratories N.V.. 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 CLB 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 CLB is calculated based on our internal credit rating of Core Laboratories N.V., 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 Core Laboratories N.V..
    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 CLB stock the variable cost ratio is equal to 83%.

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 CLB 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 Core Laboratories N.V..

Corporate tax rate of 27% is the nominal tax rate for Core Laboratories N.V.. 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 CLB 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 CLB are equal to 32.6%.

Life of production assets of 14.4 years is the average useful life of capital assets used in Core Laboratories N.V. 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 CLB is equal to 16.4%. 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 - $156.759 million for Core Laboratories N.V. - 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 44.253 million for Core Laboratories N.V. 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 Core Laboratories N.V. at the current share price and the inputted number of shares is $3.0 billion.

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