Intrinsic value of Estre Ambiental, Inc. - ESTR

Previous Close

$0.74

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$0.74

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of ESTR 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 0.0

 

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
  420
  430
  441
  453
  467
  482
  499
  516
  536
  556
  578
  602
  627
  653
  681
  711
  743
  776
  811
  849
  888
  930
  973
  1,019
  1,068
  1,119
  1,173
  1,229
  1,289
  1,351
Variable operating expenses, $m
  395
  404
  414
  425
  437
  451
  465
  481
  498
  517
  515
  536
  559
  582
  607
  634
  662
  692
  723
  757
  792
  829
  868
  909
  952
  998
  1,046
  1,096
  1,149
  1,205
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
  395
  404
  414
  425
  437
  451
  465
  481
  498
  517
  515
  536
  559
  582
  607
  634
  662
  692
  723
  757
  792
  829
  868
  909
  952
  998
  1,046
  1,096
  1,149
  1,205
Operating income, $m
  25
  26
  27
  28
  30
  32
  33
  35
  37
  40
  63
  65
  68
  71
  74
  77
  81
  84
  88
  92
  96
  101
  106
  111
  116
  121
  127
  133
  140
  147
EBITDA, $m
  78
  80
  82
  84
  87
  90
  93
  96
  100
  104
  108
  112
  117
  122
  127
  132
  138
  145
  151
  158
  165
  173
  181
  190
  199
  208
  218
  229
  240
  252
Interest expense (income), $m
  0
  148
  82
  87
  93
  100
  107
  115
  124
  133
  143
  154
  166
  178
  192
  206
  221
  237
  253
  271
  290
  310
  330
  352
  376
  400
  426
  453
  481
  511
  543
Earnings before tax, $m
  -123
  -57
  -60
  -65
  -70
  -76
  -82
  -89
  -96
  -104
  -92
  -101
  -111
  -121
  -132
  -144
  -156
  -169
  -183
  -198
  -213
  -230
  -247
  -265
  -284
  -304
  -326
  -348
  -372
  -396
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
  -123
  -57
  -60
  -65
  -70
  -76
  -82
  -89
  -96
  -104
  -92
  -101
  -111
  -121
  -132
  -144
  -156
  -169
  -183
  -198
  -213
  -230
  -247
  -265
  -284
  -304
  -326
  -348
  -372
  -396

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
  735
  752
  771
  793
  817
  843
  872
  903
  936
  972
  1,011
  1,052
  1,095
  1,142
  1,191
  1,243
  1,298
  1,357
  1,419
  1,484
  1,553
  1,625
  1,701
  1,782
  1,867
  1,956
  2,050
  2,149
  2,253
  2,363
Adjusted assets (=assets-cash), $m
  735
  752
  771
  793
  817
  843
  872
  903
  936
  972
  1,011
  1,052
  1,095
  1,142
  1,191
  1,243
  1,298
  1,357
  1,419
  1,484
  1,553
  1,625
  1,701
  1,782
  1,867
  1,956
  2,050
  2,149
  2,253
  2,363
Revenue / Adjusted assets
  0.571
  0.572
  0.572
  0.571
  0.572
  0.572
  0.572
  0.571
  0.573
  0.572
  0.572
  0.572
  0.573
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
  0.572
Average production assets, $m
  304
  311
  319
  328
  338
  349
  360
  373
  387
  402
  418
  435
  453
  472
  493
  514
  537
  561
  587
  614
  642
  672
  704
  737
  772
  809
  848
  889
  932
  977
Working capital, $m
  64
  66
  67
  69
  71
  74
  76
  79
  82
  85
  88
  92
  96
  100
  104
  109
  114
  119
  124
  130
  136
  142
  149
  156
  163
  171
  179
  188
  197
  207
Total debt, $m
  244
  260
  277
  296
  318
  342
  368
  396
  426
  458
  493
  530
  569
  611
  655
  702
  752
  804
  860
  919
  980
  1,046
  1,115
  1,187
  1,263
  1,344
  1,428
  1,517
  1,611
  1,710
Total liabilities, $m
  661
  676
  694
  713
  735
  759
  785
  812
  843
  875
  910
  946
  986
  1,028
  1,072
  1,119
  1,169
  1,221
  1,277
  1,335
  1,397
  1,463
  1,531
  1,604
  1,680
  1,761
  1,845
  1,934
  2,028
  2,126
Total equity, $m
  73
  75
  77
  79
  82
  84
  87
  90
  94
  97
  101
  105
  110
  114
  119
  124
  130
  136
  142
  148
  155
  163
  170
  178
  187
  196
  205
  215
  225
  236
Total liabilities and equity, $m
  734
  751
  771
  792
  817
  843
  872
  902
  937
  972
  1,011
  1,051
  1,096
  1,142
  1,191
  1,243
  1,299
  1,357
  1,419
  1,483
  1,552
  1,626
  1,701
  1,782
  1,867
  1,957
  2,050
  2,149
  2,253
  2,362
Debt-to-equity ratio
  3.330
  3.450
  3.590
  3.740
  3.900
  4.060
  4.220
  4.380
  4.550
  4.710
  4.880
  5.040
  5.190
  5.350
  5.500
  5.650
  5.790
  5.930
  6.060
  6.190
  6.320
  6.430
  6.550
  6.660
  6.770
  6.870
  6.970
  7.060
  7.150
  7.240
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
  -123
  -57
  -60
  -65
  -70
  -76
  -82
  -89
  -96
  -104
  -92
  -101
  -111
  -121
  -132
  -144
  -156
  -169
  -183
  -198
  -213
  -230
  -247
  -265
  -284
  -304
  -326
  -348
  -372
  -396
Depreciation, amort., depletion, $m
  53
  54
  55
  56
  57
  58
  60
  61
  62
  64
  45
  47
  49
  51
  53
  55
  58
  60
  63
  66
  69
  72
  76
  79
  83
  87
  91
  96
  100
  105
Funds from operations, $m
  -70
  -2
  -5
  -9
  -13
  -17
  -22
  -28
  -34
  -40
  -47
  -54
  -62
  -70
  -79
  -88
  -98
  -109
  -120
  -132
  -144
  -157
  -171
  -186
  -201
  -217
  -234
  -252
  -271
  -291
Change in working capital, $m
  1
  1
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
Cash from operations, $m
  -71
  -4
  -7
  -11
  -15
  -20
  -25
  -30
  -37
  -43
  -50
  -58
  -66
  -74
  -83
  -93
  -103
  -114
  -125
  -137
  -150
  -164
  -178
  -193
  -209
  -225
  -243
  -261
  -280
  -301
Maintenance CAPEX, $m
  -32
  -33
  -33
  -34
  -35
  -36
  -37
  -39
  -40
  -42
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -58
  -60
  -63
  -66
  -69
  -72
  -76
  -79
  -83
  -87
  -91
  -96
  -100
New CAPEX, $m
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -45
Cash from investing activities, $m
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -52
  -54
  -57
  -59
  -62
  -65
  -68
  -71
  -75
  -78
  -82
  -86
  -90
  -94
  -99
  -104
  -109
  -114
  -120
  -126
  -132
  -139
  -145
Free cash flow, $m
  -109
  -43
  -48
  -54
  -60
  -67
  -74
  -82
  -91
  -100
  -109
  -120
  -130
  -142
  -154
  -167
  -181
  -196
  -211
  -227
  -245
  -263
  -282
  -302
  -323
  -345
  -369
  -393
  -419
  -446
Issuance/(repayment) of debt, $m
  -195
  15
  17
  20
  22
  24
  26
  28
  30
  32
  35
  37
  39
  42
  44
  47
  50
  53
  56
  59
  62
  65
  69
  72
  76
  80
  85
  89
  94
  99
Issuance/(repurchase) of shares, $m
  333
  58
  62
  67
  72
  78
  85
  92
  99
  108
  96
  105
  115
  126
  137
  149
  162
  175
  189
  204
  220
  237
  254
  273
  293
  313
  335
  358
  382
  407
Cash from financing (excl. dividends), $m  
  138
  73
  79
  87
  94
  102
  111
  120
  129
  140
  131
  142
  154
  168
  181
  196
  212
  228
  245
  263
  282
  302
  323
  345
  369
  393
  420
  447
  476
  506
Total cash flow (excl. dividends), $m
  29
  30
  31
  33
  34
  35
  36
  38
  39
  40
  21
  22
  24
  25
  27
  28
  30
  32
  34
  35
  37
  39
  42
  44
  46
  49
  51
  54
  57
  59
Retained Cash Flow (-), $m
  -333
  -58
  -62
  -67
  -72
  -78
  -85
  -92
  -99
  -108
  -96
  -105
  -115
  -126
  -137
  -149
  -162
  -175
  -189
  -204
  -220
  -237
  -254
  -273
  -293
  -313
  -335
  -358
  -382
  -407
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
  -304
  -28
  -31
  -35
  -39
  -43
  -48
  -54
  -60
  -67
  -75
  -83
  -91
  -100
  -110
  -120
  -132
  -143
  -156
  -169
  -183
  -197
  -213
  -229
  -247
  -265
  -284
  -304
  -325
  -348
Discount rate, %
  13.30
  13.97
  14.66
  15.40
  16.17
  16.97
  17.82
  18.71
  19.65
  20.63
  21.66
  22.75
  23.88
  25.08
  26.33
  27.65
  29.03
  30.48
  32.01
  33.61
  35.29
  37.05
  38.91
  40.85
  42.89
  45.04
  47.29
  49.65
  52.14
  54.74
PV of cash for distribution, $m
  -268
  -22
  -21
  -19
  -18
  -17
  -15
  -14
  -12
  -10
  -9
  -7
  -6
  -4
  -3
  -2
  -2
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  27.9
  15.2
  8.1
  4.3
  2.2
  1.1
  0.5
  0.3
  0.1
  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

FINANCIAL RATIOS  of  Estre Ambiental, Inc. (ESTR)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

ESTR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ESTR stock intrinsic value calculation we used $412 million for the last fiscal year's total revenue generated by Estre Ambiental, Inc.. The default revenue input number comes from 0001 income statement of Estre Ambiental, Inc.. 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 ESTR 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 13.3%, whose default value for ESTR is calculated based on our internal credit rating of Estre Ambiental, Inc., 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 Estre Ambiental, Inc..
    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 ESTR stock the variable cost ratio is equal to 94.2%.

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 ESTR 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 33.7% for Estre Ambiental, Inc..

Corporate tax rate of 27% is the nominal tax rate for Estre Ambiental, Inc.. 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 ESTR 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 ESTR are equal to 72.3%.

Life of production assets of 9.3 years is the average useful life of capital assets used in Estre Ambiental, Inc. 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 ESTR is equal to 15.3%. 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 - $-136.14346119 million for Estre Ambiental, Inc. - 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 51.188 million for Estre Ambiental, Inc. 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 Estre Ambiental, Inc. at the current share price and the inputted number of shares is $0.0 billion.

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