Intrinsic value of Callon Petroleum Company - CPE

Previous Close

$8.32

  Intrinsic Value

$2.68

stock screener

  Rating & Target

str. sell

-68%

Previous close

$8.32

 
Intrinsic value

$2.68

 
Up/down potential

-68%

 
Rating

str. sell

We calculate the intrinsic value of CPE 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 1.9

 

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, %
  37.00
  33.80
  30.92
  28.33
  26.00
  23.90
  22.01
  20.31
  18.77
  17.40
  16.16
  15.04
  14.04
  13.13
  12.32
  11.59
  10.93
  10.34
  9.80
  9.32
  8.89
  8.50
  8.15
  7.84
  7.55
  7.30
  7.07
  6.86
  6.67
  6.51
Revenue, $m
  806
  1,078
  1,411
  1,811
  2,282
  2,827
  3,449
  4,149
  4,928
  5,786
  6,720
  7,731
  8,816
  9,974
  11,203
  12,502
  13,868
  15,302
  16,802
  18,368
  20,001
  21,701
  23,470
  25,309
  27,221
  29,207
  31,271
  33,417
  35,647
  37,967
Variable operating expenses, $m
  375
  502
  658
  844
  1,063
  1,317
  1,607
  1,934
  2,297
  2,696
  3,132
  3,603
  4,108
  4,648
  5,221
  5,826
  6,462
  7,131
  7,830
  8,559
  9,320
  10,113
  10,937
  11,794
  12,685
  13,611
  14,572
  15,572
  16,612
  17,693
Fixed operating expenses, $m
  56
  57
  59
  60
  61
  63
  64
  65
  67
  68
  70
  71
  73
  75
  76
  78
  80
  81
  83
  85
  87
  89
  91
  93
  95
  97
  99
  101
  103
  106
Total operating expenses, $m
  431
  559
  717
  904
  1,124
  1,380
  1,671
  1,999
  2,364
  2,764
  3,202
  3,674
  4,181
  4,723
  5,297
  5,904
  6,542
  7,212
  7,913
  8,644
  9,407
  10,202
  11,028
  11,887
  12,780
  13,708
  14,671
  15,673
  16,715
  17,799
Operating income, $m
  374
  518
  695
  907
  1,157
  1,447
  1,778
  2,150
  2,565
  3,021
  3,519
  4,057
  4,635
  5,252
  5,906
  6,598
  7,326
  8,090
  8,889
  9,723
  10,594
  11,500
  12,442
  13,422
  14,441
  15,500
  16,600
  17,743
  18,932
  20,169
EBITDA, $m
  627
  856
  1,138
  1,475
  1,873
  2,334
  2,860
  3,453
  4,112
  4,837
  5,628
  6,484
  7,402
  8,383
  9,423
  10,522
  11,679
  12,893
  14,163
  15,489
  16,872
  18,311
  19,809
  21,367
  22,985
  24,667
  26,416
  28,232
  30,121
  32,086
Interest expense (income), $m
  0
  64
  95
  133
  180
  236
  302
  378
  466
  564
  674
  794
  925
  1,067
  1,220
  1,383
  1,555
  1,738
  1,929
  2,131
  2,342
  2,562
  2,791
  3,030
  3,278
  3,537
  3,805
  4,084
  4,374
  4,676
  4,989
Earnings before tax, $m
  310
  424
  562
  727
  921
  1,145
  1,399
  1,684
  2,000
  2,347
  2,725
  3,132
  3,568
  4,032
  4,524
  5,043
  5,588
  6,160
  6,758
  7,382
  8,032
  8,709
  9,413
  10,144
  10,904
  11,695
  12,516
  13,369
  14,257
  15,180
Tax expense, $m
  84
  114
  152
  196
  249
  309
  378
  455
  540
  634
  736
  846
  963
  1,089
  1,221
  1,362
  1,509
  1,663
  1,825
  1,993
  2,169
  2,351
  2,541
  2,739
  2,944
  3,158
  3,379
  3,610
  3,849
  4,099
Net income, $m
  226
  309
  410
  531
  673
  836
  1,021
  1,230
  1,460
  1,714
  1,989
  2,286
  2,604
  2,943
  3,302
  3,681
  4,080
  4,497
  4,933
  5,389
  5,863
  6,357
  6,871
  7,405
  7,960
  8,537
  9,136
  9,760
  10,407
  11,081

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
  5,443
  7,283
  9,535
  12,235
  15,416
  19,100
  23,303
  28,035
  33,298
  39,091
  45,408
  52,238
  59,571
  67,395
  75,698
  84,471
  93,703
  103,389
  113,524
  124,107
  135,141
  146,630
  158,582
  171,009
  183,924
  197,346
  211,293
  225,790
  240,861
  256,534
Adjusted assets (=assets-cash), $m
  5,443
  7,283
  9,535
  12,235
  15,416
  19,100
  23,303
  28,035
  33,298
  39,091
  45,408
  52,238
  59,571
  67,395
  75,698
  84,471
  93,703
  103,389
  113,524
  124,107
  135,141
  146,630
  158,582
  171,009
  183,924
  197,346
  211,293
  225,790
  240,861
  256,534
Revenue / Adjusted assets
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
  0.148
Average production assets, $m
  4,298
  5,751
  7,530
  9,663
  12,175
  15,084
  18,403
  22,140
  26,297
  30,872
  35,860
  41,254
  47,045
  53,224
  59,781
  66,709
  74,000
  81,649
  89,653
  98,011
  106,725
  115,798
  125,237
  135,051
  145,250
  155,850
  166,864
  178,313
  190,214
  202,592
Working capital, $m
  -148
  -198
  -260
  -333
  -420
  -520
  -635
  -763
  -907
  -1,065
  -1,237
  -1,423
  -1,622
  -1,835
  -2,061
  -2,300
  -2,552
  -2,815
  -3,091
  -3,380
  -3,680
  -3,993
  -4,319
  -4,657
  -5,009
  -5,374
  -5,754
  -6,149
  -6,559
  -6,986
Total debt, $m
  1,751
  2,459
  3,326
  4,366
  5,591
  7,009
  8,627
  10,449
  12,475
  14,706
  17,137
  19,767
  22,590
  25,603
  28,799
  32,177
  35,731
  39,460
  43,362
  47,437
  51,685
  56,108
  60,710
  65,494
  70,466
  75,634
  81,003
  86,585
  92,387
  98,421
Total liabilities, $m
  2,096
  2,804
  3,671
  4,711
  5,935
  7,353
  8,972
  10,793
  12,820
  15,050
  17,482
  20,112
  22,935
  25,947
  29,144
  32,521
  36,076
  39,805
  43,707
  47,781
  52,029
  56,453
  61,054
  65,838
  70,811
  75,978
  81,348
  86,929
  92,731
  98,766
Total equity, $m
  3,347
  4,479
  5,864
  7,525
  9,481
  11,746
  14,331
  17,241
  20,478
  24,041
  27,926
  32,126
  36,636
  41,448
  46,554
  51,949
  57,627
  63,584
  69,817
  76,326
  83,112
  90,177
  97,528
  105,170
  113,114
  121,368
  129,945
  138,861
  148,129
  157,768
Total liabilities and equity, $m
  5,443
  7,283
  9,535
  12,236
  15,416
  19,099
  23,303
  28,034
  33,298
  39,091
  45,408
  52,238
  59,571
  67,395
  75,698
  84,470
  93,703
  103,389
  113,524
  124,107
  135,141
  146,630
  158,582
  171,008
  183,925
  197,346
  211,293
  225,790
  240,860
  256,534
Debt-to-equity ratio
  0.520
  0.550
  0.570
  0.580
  0.590
  0.600
  0.600
  0.610
  0.610
  0.610
  0.610
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
Adjusted equity ratio
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  226
  309
  410
  531
  673
  836
  1,021
  1,230
  1,460
  1,714
  1,989
  2,286
  2,604
  2,943
  3,302
  3,681
  4,080
  4,497
  4,933
  5,389
  5,863
  6,357
  6,871
  7,405
  7,960
  8,537
  9,136
  9,760
  10,407
  11,081
Depreciation, amort., depletion, $m
  253
  338
  443
  568
  716
  887
  1,083
  1,302
  1,547
  1,816
  2,109
  2,427
  2,767
  3,131
  3,517
  3,924
  4,353
  4,803
  5,274
  5,765
  6,278
  6,812
  7,367
  7,944
  8,544
  9,168
  9,816
  10,489
  11,189
  11,917
Funds from operations, $m
  479
  648
  853
  1,099
  1,389
  1,723
  2,104
  2,532
  3,007
  3,530
  4,098
  4,713
  5,372
  6,074
  6,819
  7,605
  8,432
  9,300
  10,207
  11,154
  12,141
  13,169
  14,238
  15,349
  16,504
  17,705
  18,952
  20,249
  21,597
  22,998
Change in working capital, $m
  -40
  -50
  -61
  -74
  -87
  -100
  -114
  -129
  -143
  -158
  -172
  -186
  -200
  -213
  -226
  -239
  -251
  -264
  -276
  -288
  -300
  -313
  -325
  -338
  -352
  -365
  -380
  -395
  -410
  -427
Cash from operations, $m
  519
  698
  915
  1,173
  1,475
  1,823
  2,218
  2,661
  3,151
  3,687
  4,270
  4,899
  5,571
  6,287
  7,045
  7,844
  8,684
  9,564
  10,483
  11,442
  12,442
  13,482
  14,563
  15,688
  16,856
  18,070
  19,332
  20,643
  22,007
  23,425
Maintenance CAPEX, $m
  -185
  -253
  -338
  -443
  -568
  -716
  -887
  -1,083
  -1,302
  -1,547
  -1,816
  -2,109
  -2,427
  -2,767
  -3,131
  -3,517
  -3,924
  -4,353
  -4,803
  -5,274
  -5,765
  -6,278
  -6,812
  -7,367
  -7,944
  -8,544
  -9,168
  -9,816
  -10,489
  -11,189
New CAPEX, $m
  -1,161
  -1,453
  -1,778
  -2,133
  -2,512
  -2,909
  -3,319
  -3,737
  -4,157
  -4,575
  -4,988
  -5,394
  -5,791
  -6,179
  -6,557
  -6,928
  -7,291
  -7,649
  -8,004
  -8,358
  -8,714
  -9,073
  -9,439
  -9,814
  -10,200
  -10,599
  -11,015
  -11,448
  -11,902
  -12,378
Cash from investing activities, $m
  -1,346
  -1,706
  -2,116
  -2,576
  -3,080
  -3,625
  -4,206
  -4,820
  -5,459
  -6,122
  -6,804
  -7,503
  -8,218
  -8,946
  -9,688
  -10,445
  -11,215
  -12,002
  -12,807
  -13,632
  -14,479
  -15,351
  -16,251
  -17,181
  -18,144
  -19,143
  -20,183
  -21,264
  -22,391
  -23,567
Free cash flow, $m
  -827
  -1,008
  -1,202
  -1,403
  -1,605
  -1,802
  -1,988
  -2,159
  -2,309
  -2,434
  -2,534
  -2,605
  -2,646
  -2,659
  -2,643
  -2,600
  -2,531
  -2,439
  -2,324
  -2,189
  -2,037
  -1,869
  -1,687
  -1,493
  -1,288
  -1,073
  -851
  -620
  -384
  -141
Issuance/(repayment) of debt, $m
  562
  708
  867
  1,040
  1,225
  1,418
  1,618
  1,822
  2,026
  2,230
  2,432
  2,630
  2,823
  3,012
  3,197
  3,377
  3,554
  3,729
  3,902
  4,075
  4,248
  4,423
  4,602
  4,784
  4,972
  5,167
  5,370
  5,581
  5,802
  6,034
Issuance/(repurchase) of shares, $m
  676
  822
  975
  1,130
  1,284
  1,430
  1,564
  1,680
  1,777
  1,849
  1,895
  1,914
  1,905
  1,868
  1,804
  1,714
  1,598
  1,460
  1,300
  1,120
  922
  708
  479
  237
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,238
  1,530
  1,842
  2,170
  2,509
  2,848
  3,182
  3,502
  3,803
  4,079
  4,327
  4,544
  4,728
  4,880
  5,001
  5,091
  5,152
  5,189
  5,202
  5,195
  5,170
  5,131
  5,081
  5,021
  4,972
  5,167
  5,370
  5,581
  5,802
  6,034
Total cash flow (excl. dividends), $m
  411
  522
  639
  767
  903
  1,046
  1,194
  1,344
  1,495
  1,645
  1,794
  1,939
  2,082
  2,222
  2,358
  2,491
  2,622
  2,750
  2,878
  3,005
  3,133
  3,262
  3,394
  3,529
  3,685
  4,094
  4,519
  4,961
  5,418
  5,893
Retained Cash Flow (-), $m
  -902
  -1,131
  -1,385
  -1,661
  -1,956
  -2,266
  -2,585
  -2,910
  -3,237
  -3,563
  -3,885
  -4,201
  -4,510
  -4,812
  -5,107
  -5,395
  -5,678
  -5,957
  -6,233
  -6,509
  -6,786
  -7,066
  -7,351
  -7,642
  -7,943
  -8,254
  -8,578
  -8,915
  -9,269
  -9,639
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
  -491
  -609
  -745
  -894
  -1,053
  -1,219
  -1,391
  -1,566
  -1,742
  -1,918
  -2,091
  -2,261
  -2,428
  -2,590
  -2,749
  -2,904
  -3,056
  -3,206
  -3,355
  -3,504
  -3,653
  -3,803
  -3,957
  -4,114
  -4,258
  -4,160
  -4,058
  -3,955
  -3,850
  -3,746
Discount rate, %
  5.20
  5.46
  5.73
  6.02
  6.32
  6.64
  6.97
  7.32
  7.68
  8.07
  8.47
  8.89
  9.34
  9.81
  10.30
  10.81
  11.35
  11.92
  12.51
  13.14
  13.80
  14.49
  15.21
  15.97
  16.77
  17.61
  18.49
  19.41
  20.38
  21.40
PV of cash for distribution, $m
  -467
  -548
  -631
  -708
  -775
  -829
  -868
  -890
  -895
  -883
  -855
  -813
  -761
  -699
  -632
  -562
  -491
  -422
  -357
  -297
  -242
  -194
  -152
  -117
  -88
  -61
  -42
  -28
  -18
  -11
Current shareholders' claim on cash, %
  73.7
  56.0
  43.8
  35.1
  28.7
  24.1
  20.6
  17.9
  15.8
  14.1
  12.8
  11.8
  10.9
  10.3
  9.7
  9.3
  8.9
  8.7
  8.4
  8.3
  8.1
  8.0
  8.0
  8.0
  8.0
  8.0
  8.0
  8.0
  8.0
  8.0

Callon Petroleum Company is an independent oil and natural gas company. The Company is engaged in the exploration, development, acquisition and production of oil and natural gas properties. The Company focuses on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin. The Permian Basin is located in West Texas and southeastern New Mexico and consisted of three primary sub-basins: the Midland Basin, the Delaware Basin, and the Central Basin Platform as of December 31, 2016. The Company's drilling activity focuses on the horizontal development of various prospective intervals in the Midland Basin, including multiple levels of the Wolfcamp formation and the Lower Spraberry shale. It owns additional immaterial properties in Louisiana. As of December 31, 2016, the Company had owned leaseholds in 39,570 net acres in the Permian Basin, all of which was located in the Midland Basin.

FINANCIAL RATIOS  of  Callon Petroleum Company (CPE)

Valuation Ratios
P/E Ratio -18.2
Price to Sales 8.3
Price to Book 1
Price to Tangible Book
Price to Cash Flow 14.1
Price to Free Cash Flow -23.6
Growth Rates
Sales Growth Rate 45.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -16.3%
Cap. Spend. - 3 Yr. Gr. Rate 3.5%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 22.5%
Total Debt to Equity 22.5%
Interest Coverage 0
Management Effectiveness
Return On Assets -6%
Ret/ On Assets - 3 Yr. Avg. -9.7%
Return On Total Capital -6.5%
Ret/ On T. Cap. - 3 Yr. Avg. -10.9%
Return On Equity -8.8%
Return On Equity - 3 Yr. Avg. -19.4%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 75.1%
Gross Margin - 3 Yr. Avg. 76%
EBITDA Margin -9.5%
EBITDA Margin - 3 Yr. Avg. -8.9%
Operating Margin -29.9%
Oper. Margin - 3 Yr. Avg. -51.9%
Pre-Tax Margin -45.8%
Pre-Tax Margin - 3 Yr. Avg. -50.7%
Net Profit Margin -45.8%
Net Profit Margin - 3 Yr. Avg. -64.9%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 6.3%
Payout Ratio -7.6%

CPE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CPE stock intrinsic value calculation we used $588 million for the last fiscal year's total revenue generated by Callon Petroleum Company. The default revenue input number comes from 0001 income statement of Callon Petroleum Company. 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 CPE stock valuation model: a) initial revenue growth rate of 37% 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 5.2%, whose default value for CPE is calculated based on our internal credit rating of Callon Petroleum Company, 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 Callon Petroleum Company.
    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 CPE stock the variable cost ratio is equal to 46.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $55 million in the base year in the intrinsic value calculation for CPE 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 Callon Petroleum Company.

Corporate tax rate of 27% is the nominal tax rate for Callon Petroleum Company. 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 CPE 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 CPE are equal to 533.6%.

Life of production assets of 17 years is the average useful life of capital assets used in Callon Petroleum Company 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 CPE is equal to -18.4%. 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 - $2445.208 million for Callon Petroleum Company - 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 228.261 million for Callon Petroleum Company 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 Callon Petroleum Company at the current share price and the inputted number of shares is $1.9 billion.

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