Intrinsic value of EQM Midstream Partners, LP - EQM

Previous Close

$28.47

  Intrinsic Value

$107.27

stock screener

  Rating & Target

str. buy

+277%

Previous close

$28.47

 
Intrinsic value

$107.27

 
Up/down potential

+277%

 
Rating

str. buy

We calculate the intrinsic value of EQM 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 5.9

 

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, %
  31.60
  28.94
  26.55
  24.39
  22.45
  20.71
  19.14
  17.72
  16.45
  15.31
  14.27
  13.35
  12.51
  11.76
  11.09
  10.48
  9.93
  9.44
  8.99
  8.59
  8.23
  7.91
  7.62
  7.36
  7.12
  6.91
  6.72
  6.55
  6.39
  6.25
Revenue, $m
  1,967
  2,537
  3,210
  3,993
  4,890
  5,902
  7,032
  8,278
  9,640
  11,115
  12,702
  14,397
  16,199
  18,104
  20,111
  22,218
  24,424
  26,728
  29,132
  31,635
  34,240
  36,949
  39,764
  42,690
  45,730
  48,890
  52,175
  55,590
  59,144
  62,842
Variable operating expenses, $m
  550
  660
  790
  942
  1,115
  1,311
  1,529
  1,770
  2,033
  2,318
  2,455
  2,783
  3,131
  3,499
  3,887
  4,294
  4,721
  5,166
  5,631
  6,115
  6,618
  7,142
  7,686
  8,251
  8,839
  9,450
  10,085
  10,745
  11,432
  12,147
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
  550
  660
  790
  942
  1,115
  1,311
  1,529
  1,770
  2,033
  2,318
  2,455
  2,783
  3,131
  3,499
  3,887
  4,294
  4,721
  5,166
  5,631
  6,115
  6,618
  7,142
  7,686
  8,251
  8,839
  9,450
  10,085
  10,745
  11,432
  12,147
Operating income, $m
  1,417
  1,876
  2,420
  3,051
  3,775
  4,591
  5,503
  6,508
  7,607
  8,797
  10,247
  11,614
  13,068
  14,605
  16,224
  17,923
  19,703
  21,562
  23,501
  25,521
  27,622
  29,807
  32,078
  34,438
  36,891
  39,440
  42,090
  44,845
  47,712
  50,695
EBITDA, $m
  1,867
  2,408
  3,047
  3,790
  4,641
  5,602
  6,674
  7,856
  9,149
  10,549
  12,055
  13,664
  15,373
  17,181
  19,086
  21,086
  23,179
  25,366
  27,648
  30,023
  32,496
  35,066
  37,738
  40,515
  43,400
  46,399
  49,516
  52,758
  56,130
  59,640
Interest expense (income), $m
  14
  220
  356
  520
  713
  938
  1,195
  1,486
  1,810
  2,168
  2,559
  2,982
  3,438
  3,925
  4,442
  4,989
  5,565
  6,170
  6,803
  7,465
  8,155
  8,873
  9,621
  10,399
  11,207
  12,047
  12,920
  13,827
  14,770
  15,751
  16,771
Earnings before tax, $m
  1,197
  1,520
  1,900
  2,338
  2,837
  3,396
  4,017
  4,698
  5,439
  6,238
  7,264
  8,177
  9,143
  10,163
  11,235
  12,358
  13,533
  14,759
  16,036
  17,366
  18,749
  20,186
  21,679
  23,231
  24,844
  26,520
  28,263
  30,075
  31,961
  33,924
Tax expense, $m
  323
  410
  513
  631
  766
  917
  1,085
  1,268
  1,468
  1,684
  1,961
  2,208
  2,469
  2,744
  3,033
  3,337
  3,654
  3,985
  4,330
  4,689
  5,062
  5,450
  5,853
  6,272
  6,708
  7,160
  7,631
  8,120
  8,630
  9,160
Net income, $m
  874
  1,110
  1,387
  1,707
  2,071
  2,479
  2,932
  3,429
  3,970
  4,554
  5,303
  5,969
  6,674
  7,419
  8,201
  9,022
  9,879
  10,774
  11,707
  12,677
  13,686
  14,736
  15,826
  16,959
  18,136
  19,360
  20,632
  21,955
  23,332
  24,765

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
  12,452
  16,056
  20,318
  25,274
  30,948
  37,356
  44,505
  52,393
  61,011
  70,349
  80,392
  91,122
  102,524
  114,582
  127,284
  140,619
  154,581
  169,167
  184,380
  200,224
  216,710
  233,853
  251,671
  270,188
  289,431
  309,429
  330,218
  351,837
  374,327
  397,733
Adjusted assets (=assets-cash), $m
  12,452
  16,056
  20,318
  25,274
  30,948
  37,356
  44,505
  52,393
  61,011
  70,349
  80,392
  91,122
  102,524
  114,582
  127,284
  140,619
  154,581
  169,167
  184,380
  200,224
  216,710
  233,853
  251,671
  270,188
  289,431
  309,429
  330,218
  351,837
  374,327
  397,733
Revenue / Adjusted assets
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
Average production assets, $m
  8,401
  10,832
  13,708
  17,051
  20,879
  25,203
  30,026
  35,347
  41,162
  47,462
  54,237
  61,476
  69,169
  77,304
  85,873
  94,870
  104,289
  114,130
  124,394
  135,083
  146,206
  157,771
  169,793
  182,285
  195,267
  208,759
  222,785
  237,370
  252,543
  268,335
Working capital, $m
  -332
  -429
  -543
  -675
  -826
  -997
  -1,188
  -1,399
  -1,629
  -1,878
  -2,147
  -2,433
  -2,738
  -3,060
  -3,399
  -3,755
  -4,128
  -4,517
  -4,923
  -5,346
  -5,787
  -6,244
  -6,720
  -7,215
  -7,728
  -8,262
  -8,817
  -9,395
  -9,995
  -10,620
Total debt, $m
  6,596
  9,623
  13,203
  17,366
  22,132
  27,515
  33,520
  40,146
  47,385
  55,229
  63,665
  72,678
  82,256
  92,385
  103,054
  114,255
  125,984
  138,236
  151,015
  164,324
  178,172
  192,572
  207,540
  223,094
  239,257
  256,056
  273,519
  291,679
  310,570
  330,232
Total liabilities, $m
  10,460
  13,487
  17,067
  21,230
  25,996
  31,379
  37,384
  44,010
  51,250
  59,094
  67,529
  76,542
  86,120
  96,249
  106,918
  118,120
  129,848
  142,100
  154,879
  168,188
  182,036
  196,437
  211,404
  226,958
  243,122
  259,920
  277,384
  295,543
  314,435
  334,096
Total equity, $m
  1,992
  2,569
  3,251
  4,044
  4,952
  5,977
  7,121
  8,383
  9,762
  11,256
  12,863
  14,580
  16,404
  18,333
  20,365
  22,499
  24,733
  27,067
  29,501
  32,036
  34,674
  37,416
  40,267
  43,230
  46,309
  49,509
  52,835
  56,294
  59,892
  63,637
Total liabilities and equity, $m
  12,452
  16,056
  20,318
  25,274
  30,948
  37,356
  44,505
  52,393
  61,012
  70,350
  80,392
  91,122
  102,524
  114,582
  127,283
  140,619
  154,581
  169,167
  184,380
  200,224
  216,710
  233,853
  251,671
  270,188
  289,431
  309,429
  330,219
  351,837
  374,327
  397,733
Debt-to-equity ratio
  3.310
  3.750
  4.060
  4.290
  4.470
  4.600
  4.710
  4.790
  4.850
  4.910
  4.950
  4.980
  5.010
  5.040
  5.060
  5.080
  5.090
  5.110
  5.120
  5.130
  5.140
  5.150
  5.150
  5.160
  5.170
  5.170
  5.180
  5.180
  5.190
  5.190
Adjusted equity ratio
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  874
  1,110
  1,387
  1,707
  2,071
  2,479
  2,932
  3,429
  3,970
  4,554
  5,303
  5,969
  6,674
  7,419
  8,201
  9,022
  9,879
  10,774
  11,707
  12,677
  13,686
  14,736
  15,826
  16,959
  18,136
  19,360
  20,632
  21,955
  23,332
  24,765
Depreciation, amort., depletion, $m
  450
  531
  627
  738
  866
  1,010
  1,171
  1,348
  1,542
  1,752
  1,808
  2,049
  2,306
  2,577
  2,862
  3,162
  3,476
  3,804
  4,146
  4,503
  4,874
  5,259
  5,660
  6,076
  6,509
  6,959
  7,426
  7,912
  8,418
  8,944
Funds from operations, $m
  1,324
  1,641
  2,014
  2,445
  2,937
  3,489
  4,103
  4,778
  5,512
  6,306
  7,111
  8,018
  8,980
  9,996
  11,064
  12,184
  13,356
  14,578
  15,853
  17,180
  18,560
  19,995
  21,486
  23,035
  24,645
  26,318
  28,058
  29,867
  31,750
  33,709
Change in working capital, $m
  -80
  -96
  -114
  -132
  -152
  -171
  -191
  -211
  -230
  -249
  -268
  -287
  -304
  -322
  -339
  -356
  -373
  -389
  -406
  -423
  -440
  -458
  -476
  -494
  -514
  -534
  -555
  -577
  -601
  -625
Cash from operations, $m
  1,403
  1,737
  2,128
  2,578
  3,088
  3,661
  4,294
  4,988
  5,742
  6,555
  7,379
  8,305
  9,285
  10,318
  11,403
  12,540
  13,728
  14,968
  16,259
  17,603
  19,000
  20,452
  21,961
  23,529
  25,159
  26,852
  28,613
  30,445
  32,350
  34,334
Maintenance CAPEX, $m
  -213
  -280
  -361
  -457
  -568
  -696
  -840
  -1,001
  -1,178
  -1,372
  -1,582
  -1,808
  -2,049
  -2,306
  -2,577
  -2,862
  -3,162
  -3,476
  -3,804
  -4,146
  -4,503
  -4,874
  -5,259
  -5,660
  -6,076
  -6,509
  -6,959
  -7,426
  -7,912
  -8,418
New CAPEX, $m
  -2,017
  -2,431
  -2,875
  -3,343
  -3,828
  -4,324
  -4,823
  -5,321
  -5,815
  -6,300
  -6,775
  -7,239
  -7,692
  -8,135
  -8,569
  -8,997
  -9,420
  -9,841
  -10,263
  -10,689
  -11,123
  -11,566
  -12,021
  -12,493
  -12,982
  -13,492
  -14,026
  -14,585
  -15,173
  -15,791
Cash from investing activities, $m
  -2,230
  -2,711
  -3,236
  -3,800
  -4,396
  -5,020
  -5,663
  -6,322
  -6,993
  -7,672
  -8,357
  -9,047
  -9,741
  -10,441
  -11,146
  -11,859
  -12,582
  -13,317
  -14,067
  -14,835
  -15,626
  -16,440
  -17,280
  -18,153
  -19,058
  -20,001
  -20,985
  -22,011
  -23,085
  -24,209
Free cash flow, $m
  -826
  -974
  -1,109
  -1,223
  -1,308
  -1,359
  -1,369
  -1,334
  -1,251
  -1,117
  -978
  -743
  -457
  -123
  257
  681
  1,146
  1,651
  2,192
  2,767
  3,375
  4,013
  4,681
  5,377
  6,101
  6,851
  7,629
  8,433
  9,265
  10,125
Issuance/(repayment) of debt, $m
  2,514
  3,027
  3,580
  4,163
  4,767
  5,383
  6,005
  6,626
  7,240
  7,844
  8,436
  9,013
  9,577
  10,129
  10,669
  11,202
  11,728
  12,253
  12,778
  13,309
  13,848
  14,400
  14,967
  15,554
  16,163
  16,799
  17,463
  18,160
  18,891
  19,661
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  
  2,514
  3,027
  3,580
  4,163
  4,767
  5,383
  6,005
  6,626
  7,240
  7,844
  8,436
  9,013
  9,577
  10,129
  10,669
  11,202
  11,728
  12,253
  12,778
  13,309
  13,848
  14,400
  14,967
  15,554
  16,163
  16,799
  17,463
  18,160
  18,891
  19,661
Total cash flow (excl. dividends), $m
  1,688
  2,053
  2,471
  2,940
  3,458
  4,024
  4,636
  5,292
  5,989
  6,727
  7,457
  8,271
  9,120
  10,006
  10,926
  11,882
  12,874
  13,903
  14,970
  16,076
  17,223
  18,413
  19,648
  20,931
  22,264
  23,650
  25,092
  26,593
  28,156
  29,786
Retained Cash Flow (-), $m
  -482
  -577
  -682
  -793
  -908
  -1,025
  -1,144
  -1,262
  -1,379
  -1,494
  -1,607
  -1,717
  -1,824
  -1,929
  -2,032
  -2,134
  -2,234
  -2,334
  -2,434
  -2,535
  -2,638
  -2,743
  -2,851
  -2,963
  -3,079
  -3,200
  -3,326
  -3,459
  -3,598
  -3,745
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
  1,206
  1,476
  1,789
  2,147
  2,550
  2,999
  3,492
  4,030
  4,610
  5,233
  5,851
  6,554
  7,296
  8,076
  8,894
  9,749
  10,641
  11,569
  12,536
  13,541
  14,585
  15,670
  16,798
  17,969
  19,185
  20,450
  21,766
  23,134
  24,558
  26,041
Discount rate, %
  8.90
  9.35
  9.81
  10.30
  10.82
  11.36
  11.93
  12.52
  13.15
  13.81
  14.50
  15.22
  15.98
  16.78
  17.62
  18.50
  19.43
  20.40
  21.42
  22.49
  23.61
  24.80
  26.03
  27.34
  28.70
  30.14
  31.65
  33.23
  34.89
  36.63
PV of cash for distribution, $m
  1,107
  1,235
  1,351
  1,451
  1,526
  1,573
  1,587
  1,568
  1,517
  1,436
  1,320
  1,197
  1,062
  920
  779
  645
  520
  409
  314
  234
  170
  120
  82
  54
  35
  22
  13
  8
  4
  2
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
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

EQT Midstream Partners, LP (EQM) owns, operates, acquires and develops midstream assets in the Appalachian Basin. The Company's segments include Gathering and Transmission. The Gathering segment primarily includes high pressure gathering lines and the Federal Energy Regulatory Commission (FERC)-regulated low pressure gathering system. Transmission includes EQM's FERC-regulated interstate pipeline and storage business. The Company's operations are primarily focused in southwestern Pennsylvania and northern West Virginia. As of December 31, 2016, the Company provided midstream services to EQT Corporation (EQT) and a range of third parties across 24 counties in Pennsylvania, West Virginia and Ohio through its two assets: the gathering system, which delivered natural gas from wells and other receipt points to transmission pipelines, and the transmission and storage system, which served as a header system transmission pipeline.

FINANCIAL RATIOS  of  EQM Midstream Partners, LP (EQM)

Valuation Ratios
P/E Ratio 4.3
Price to Sales 3.1
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 4.3
Price to Free Cash Flow -48.8
Growth Rates
Sales Growth Rate 16.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 27.7%
Cap. Spend. - 3 Yr. Gr. Rate 15.6%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 49.4%
Total Debt to Equity 49.4%
Interest Coverage 40
Management Effectiveness
Return On Assets 18.7%
Ret/ On Assets - 3 Yr. Avg. 19.7%
Return On Total Capital 19.2%
Ret/ On T. Cap. - 3 Yr. Avg. 21.1%
Return On Equity 28%
Return On Equity - 3 Yr. Avg. 31%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 84.9%
EBITDA Margin - 3 Yr. Avg. 80.7%
Operating Margin 71.6%
Oper. Margin - 3 Yr. Avg. 70.2%
Pre-Tax Margin 74.5%
Pre-Tax Margin - 3 Yr. Avg. 70%
Net Profit Margin 73.1%
Net Profit Margin - 3 Yr. Avg. 67.8%
Effective Tax Rate 1.8%
Eff/ Tax Rate - 3 Yr. Avg. 3.4%
Payout Ratio 61.2%

EQM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EQM stock intrinsic value calculation we used $1495 million for the last fiscal year's total revenue generated by EQM Midstream Partners, LP. The default revenue input number comes from 0001 income statement of EQM Midstream Partners, LP. 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 EQM stock valuation model: a) initial revenue growth rate of 31.6% 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 8.9%, whose default value for EQM is calculated based on our internal credit rating of EQM Midstream Partners, LP, 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 EQM Midstream Partners, LP.
    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 EQM stock the variable cost ratio is equal to 30.7%.

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 EQM 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 EQM Midstream Partners, LP.

Corporate tax rate of 27% is the nominal tax rate for EQM Midstream Partners, LP. 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 EQM 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 EQM are equal to 427%.

Life of production assets of 34.2 years is the average useful life of capital assets used in EQM Midstream Partners, LP 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 EQM is equal to -16.9%. 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 - $1510.289 million for EQM Midstream Partners, LP - 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 207.530 million for EQM Midstream Partners, LP 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 EQM Midstream Partners, LP at the current share price and the inputted number of shares is $5.9 billion.

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