Intrinsic value of Enviva Partners, LP - EVA

Previous Close

$30.25

  Intrinsic Value

$1.61

stock screener

  Rating & Target

str. sell

-95%

Previous close

$30.25

 
Intrinsic value

$1.61

 
Up/down potential

-95%

 
Rating

str. sell

We calculate the intrinsic value of EVA 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 0.8

 

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, %
  4.80
  4.82
  4.84
  4.85
  4.87
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.94
  4.94
  4.95
  4.95
  4.96
  4.96
  4.97
  4.97
  4.97
  4.98
  4.98
  4.98
  4.98
  4.98
  4.99
  4.99
  4.99
  4.99
  4.99
Revenue, $m
  602
  631
  661
  693
  727
  762
  800
  839
  880
  923
  969
  1,017
  1,067
  1,120
  1,175
  1,234
  1,295
  1,359
  1,427
  1,498
  1,572
  1,650
  1,733
  1,819
  1,910
  2,005
  2,105
  2,210
  2,320
  2,436
Variable operating expenses, $m
  548
  574
  601
  630
  660
  692
  725
  760
  797
  836
  868
  911
  956
  1,003
  1,053
  1,105
  1,160
  1,218
  1,278
  1,342
  1,409
  1,479
  1,553
  1,630
  1,711
  1,796
  1,886
  1,980
  2,079
  2,183
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
  548
  574
  601
  630
  660
  692
  725
  760
  797
  836
  868
  911
  956
  1,003
  1,053
  1,105
  1,160
  1,218
  1,278
  1,342
  1,409
  1,479
  1,553
  1,630
  1,711
  1,796
  1,886
  1,980
  2,079
  2,183
Operating income, $m
  54
  57
  60
  63
  67
  71
  75
  79
  83
  87
  101
  106
  111
  116
  122
  128
  135
  141
  148
  156
  163
  172
  180
  189
  199
  208
  219
  230
  241
  253
EBITDA, $m
  103
  107
  113
  118
  124
  130
  136
  143
  150
  157
  165
  173
  182
  191
  200
  210
  221
  232
  243
  255
  268
  281
  295
  310
  325
  342
  359
  377
  395
  415
Interest expense (income), $m
  11
  38
  34
  37
  40
  43
  47
  50
  54
  58
  62
  67
  71
  76
  81
  87
  92
  98
  105
  111
  118
  125
  133
  141
  149
  158
  167
  177
  187
  198
  209
Earnings before tax, $m
  16
  23
  23
  23
  24
  24
  24
  24
  25
  25
  34
  34
  35
  35
  35
  36
  36
  37
  37
  38
  38
  39
  39
  40
  40
  41
  42
  42
  43
  44
Tax expense, $m
  4
  6
  6
  6
  6
  6
  7
  7
  7
  7
  9
  9
  9
  9
  10
  10
  10
  10
  10
  10
  10
  10
  11
  11
  11
  11
  11
  11
  12
  12
Net income, $m
  12
  17
  17
  17
  17
  17
  18
  18
  18
  18
  25
  25
  25
  26
  26
  26
  26
  27
  27
  27
  28
  28
  29
  29
  29
  30
  30
  31
  32
  32

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
  784
  822
  862
  904
  948
  994
  1,043
  1,094
  1,147
  1,204
  1,263
  1,326
  1,391
  1,460
  1,532
  1,608
  1,688
  1,772
  1,860
  1,953
  2,050
  2,152
  2,259
  2,372
  2,490
  2,614
  2,744
  2,881
  3,025
  3,176
Adjusted assets (=assets-cash), $m
  784
  822
  862
  904
  948
  994
  1,043
  1,094
  1,147
  1,204
  1,263
  1,326
  1,391
  1,460
  1,532
  1,608
  1,688
  1,772
  1,860
  1,953
  2,050
  2,152
  2,259
  2,372
  2,490
  2,614
  2,744
  2,881
  3,025
  3,176
Revenue / Adjusted assets
  0.768
  0.768
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
Average production assets, $m
  632
  662
  694
  728
  763
  800
  840
  881
  924
  970
  1,017
  1,068
  1,120
  1,176
  1,234
  1,295
  1,360
  1,427
  1,498
  1,573
  1,651
  1,733
  1,819
  1,910
  2,005
  2,105
  2,210
  2,320
  2,436
  2,558
Working capital, $m
  -73
  -76
  -80
  -84
  -88
  -92
  -97
  -102
  -106
  -112
  -117
  -123
  -129
  -136
  -142
  -149
  -157
  -164
  -173
  -181
  -190
  -200
  -210
  -220
  -231
  -243
  -255
  -267
  -281
  -295
Total debt, $m
  390
  424
  460
  497
  537
  578
  622
  668
  717
  767
  821
  877
  936
  998
  1,063
  1,131
  1,203
  1,279
  1,358
  1,441
  1,529
  1,621
  1,717
  1,818
  1,925
  2,036
  2,154
  2,277
  2,406
  2,542
Total liabilities, $m
  706
  740
  776
  813
  853
  895
  938
  984
  1,033
  1,084
  1,137
  1,193
  1,252
  1,314
  1,379
  1,448
  1,519
  1,595
  1,674
  1,757
  1,845
  1,937
  2,033
  2,134
  2,241
  2,353
  2,470
  2,593
  2,722
  2,858
Total equity, $m
  78
  82
  86
  90
  95
  99
  104
  109
  115
  120
  126
  133
  139
  146
  153
  161
  169
  177
  186
  195
  205
  215
  226
  237
  249
  261
  274
  288
  302
  318
Total liabilities and equity, $m
  784
  822
  862
  903
  948
  994
  1,042
  1,093
  1,148
  1,204
  1,263
  1,326
  1,391
  1,460
  1,532
  1,609
  1,688
  1,772
  1,860
  1,952
  2,050
  2,152
  2,259
  2,371
  2,490
  2,614
  2,744
  2,881
  3,024
  3,176
Debt-to-equity ratio
  4.970
  5.150
  5.330
  5.500
  5.660
  5.820
  5.970
  6.110
  6.250
  6.370
  6.500
  6.620
  6.730
  6.830
  6.940
  7.030
  7.130
  7.220
  7.300
  7.380
  7.460
  7.530
  7.600
  7.670
  7.730
  7.790
  7.850
  7.900
  7.950
  8.000
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
  12
  17
  17
  17
  17
  17
  18
  18
  18
  18
  25
  25
  25
  26
  26
  26
  26
  27
  27
  27
  28
  28
  29
  29
  29
  30
  30
  31
  32
  32
Depreciation, amort., depletion, $m
  49
  51
  53
  55
  57
  59
  62
  64
  67
  70
  64
  68
  71
  74
  78
  82
  86
  90
  95
  100
  104
  110
  115
  121
  127
  133
  140
  147
  154
  162
Funds from operations, $m
  60
  67
  70
  72
  74
  77
  79
  82
  85
  88
  89
  93
  96
  100
  104
  108
  112
  117
  122
  127
  132
  138
  144
  150
  156
  163
  170
  178
  186
  194
Change in working capital, $m
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -13
  -14
Cash from operations, $m
  64
  71
  73
  76
  78
  81
  84
  87
  90
  94
  95
  98
  102
  106
  111
  115
  120
  125
  130
  136
  141
  147
  154
  160
  167
  175
  182
  191
  199
  208
Maintenance CAPEX, $m
  -38
  -40
  -42
  -44
  -46
  -48
  -51
  -53
  -56
  -58
  -61
  -64
  -68
  -71
  -74
  -78
  -82
  -86
  -90
  -95
  -100
  -104
  -110
  -115
  -121
  -127
  -133
  -140
  -147
  -154
New CAPEX, $m
  -29
  -30
  -32
  -34
  -35
  -37
  -39
  -41
  -43
  -45
  -48
  -50
  -53
  -55
  -58
  -61
  -64
  -68
  -71
  -74
  -78
  -82
  -86
  -91
  -95
  -100
  -105
  -110
  -116
  -122
Cash from investing activities, $m
  -67
  -70
  -74
  -78
  -81
  -85
  -90
  -94
  -99
  -103
  -109
  -114
  -121
  -126
  -132
  -139
  -146
  -154
  -161
  -169
  -178
  -186
  -196
  -206
  -216
  -227
  -238
  -250
  -263
  -276
Free cash flow, $m
  -3
  0
  -1
  -2
  -3
  -5
  -6
  -7
  -9
  -10
  -14
  -16
  -18
  -20
  -22
  -24
  -26
  -29
  -31
  -34
  -36
  -39
  -42
  -45
  -49
  -52
  -56
  -60
  -64
  -68
Issuance/(repayment) of debt, $m
  -43
  34
  36
  38
  40
  42
  44
  46
  48
  51
  53
  56
  59
  62
  65
  68
  72
  75
  79
  83
  87
  92
  96
  101
  106
  112
  117
  123
  129
  136
Issuance/(repurchase) of shares, $m
  67
  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  
  24
  34
  36
  38
  40
  42
  44
  46
  48
  51
  53
  56
  59
  62
  65
  68
  72
  75
  79
  83
  87
  92
  96
  101
  106
  112
  117
  123
  129
  136
Total cash flow (excl. dividends), $m
  20
  34
  35
  36
  36
  37
  38
  39
  40
  40
  39
  40
  41
  42
  43
  44
  45
  47
  48
  49
  51
  53
  54
  56
  58
  60
  62
  64
  66
  68
Retained Cash Flow (-), $m
  -78
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
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
  -58
  31
  31
  32
  32
  33
  33
  34
  34
  35
  33
  34
  34
  35
  36
  37
  37
  38
  39
  40
  41
  42
  43
  45
  46
  47
  48
  50
  51
  53
Discount rate, %
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
  21.18
  22.23
  23.35
  24.51
  25.74
  27.03
  28.38
  29.80
  31.29
  32.85
  34.49
  36.22
  38.03
  39.93
  41.93
  44.02
  46.22
  48.53
  50.96
  53.51
PV of cash for distribution, $m
  -52
  24
  21
  18
  15
  13
  11
  9
  7
  6
  4
  3
  2
  2
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Enviva Partners, LP is a supplier of utility-grade wood pellets to power generators. The Company procures wood fiber and processes it into utility-grade wood pellets and loads the finished wood pellets into railcars, trucks and barges that are transported to deep-water marine terminals, where they are received, stored and loaded onto oceangoing vessels for transport to the Company's principally Northern European customers. The Company's principal product, utility-grade wood pellets, is a traded energy commodity that is used as a substitute for coal in both dedicated and co-fired power generation and combined heat and power plants. It enables power generators to generate electricity. The Company's customers use its wood pellets as a substitute fuel for coal in dedicated biomass or co-fired coal power plants. Wood pellets are exported from the Company's deep-water marine terminal in Chesapeake, Virginia, from a deep-water marine terminal in Wilmington, North Carolina.

FINANCIAL RATIOS  of  Enviva Partners, LP (EVA)

Valuation Ratios
P/E Ratio 35.9
Price to Sales 1.6
Price to Book 2.4
Price to Tangible Book
Price to Cash Flow 13.2
Price to Free Cash Flow -53.8
Growth Rates
Sales Growth Rate 1.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -7.8%
Cap. Spend. - 3 Yr. Gr. Rate -10.7%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 111.2%
Total Debt to Equity 112.5%
Interest Coverage 3
Management Effectiveness
Return On Assets 4.6%
Ret/ On Assets - 3 Yr. Avg. 4%
Return On Total Capital 3.4%
Ret/ On T. Cap. - 3 Yr. Avg. 2.6%
Return On Equity 5.9%
Return On Equity - 3 Yr. Avg. 4.1%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 17%
Gross Margin - 3 Yr. Avg. 12.5%
EBITDA Margin 12.3%
EBITDA Margin - 3 Yr. Avg. 11.7%
Operating Margin 7.1%
Oper. Margin - 3 Yr. Avg. 5.7%
Pre-Tax Margin 3.9%
Pre-Tax Margin - 3 Yr. Avg. 2.9%
Net Profit Margin 4.5%
Net Profit Margin - 3 Yr. Avg. 3%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 4.5%
Payout Ratio 690.5%

EVA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EVA stock intrinsic value calculation we used $574 million for the last fiscal year's total revenue generated by Enviva Partners, LP. The default revenue input number comes from 0001 income statement of Enviva 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 EVA stock valuation model: a) initial revenue growth rate of 4.8% 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%, whose default value for EVA is calculated based on our internal credit rating of Enviva 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 Enviva 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 EVA stock the variable cost ratio is equal to 91.1%.

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 EVA 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 8.7% for Enviva Partners, LP.

Corporate tax rate of 27% is the nominal tax rate for Enviva 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 EVA 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 EVA are equal to 105%.

Life of production assets of 15.8 years is the average useful life of capital assets used in Enviva 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 EVA is equal to -12.1%. 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 - $0 million for Enviva 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 26.573 million for Enviva 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 Enviva Partners, LP at the current share price and the inputted number of shares is $0.8 billion.

RELATED COMPANIES Price Int.Val. Rating

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.