Intrinsic value of FTS International - FTSI

Previous Close

$7.77

  Intrinsic Value

$60.36

stock screener

  Rating & Target

str. buy

+677%

Previous close

$7.77

 
Intrinsic value

$60.36

 
Up/down potential

+677%

 
Rating

str. buy

We calculate the intrinsic value of FTSI 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, %
  43.00
  39.20
  35.78
  32.70
  29.93
  27.44
  25.19
  23.18
  21.36
  19.72
  18.25
  16.92
  15.73
  14.66
  13.69
  12.82
  12.04
  11.34
  10.70
  10.13
  9.62
  9.16
  8.74
  8.37
  8.03
  7.73
  7.46
  7.21
  6.99
  6.79
Revenue, $m
  2,097
  2,918
  3,963
  5,258
  6,832
  8,707
  10,901
  13,427
  16,295
  19,508
  23,069
  26,973
  31,216
  35,792
  40,693
  45,912
  51,440
  57,272
  63,403
  69,827
  76,545
  83,554
  90,859
  98,462
  106,370
  114,590
  123,133
  132,010
  141,236
  150,826
Variable operating expenses, $m
  1,097
  1,526
  2,071
  2,748
  3,569
  4,548
  5,693
  7,012
  8,509
  10,186
  12,041
  14,079
  16,295
  18,683
  21,241
  23,965
  26,851
  29,895
  33,095
  36,449
  39,955
  43,614
  47,427
  51,396
  55,524
  59,814
  64,274
  68,908
  73,723
  78,729
Fixed operating expenses, $m
  425
  435
  444
  454
  464
  474
  484
  495
  506
  517
  529
  540
  552
  564
  577
  589
  602
  615
  629
  643
  657
  671
  686
  701
  717
  733
  749
  765
  782
  799
Total operating expenses, $m
  1,522
  1,961
  2,515
  3,202
  4,033
  5,022
  6,177
  7,507
  9,015
  10,703
  12,570
  14,619
  16,847
  19,247
  21,818
  24,554
  27,453
  30,510
  33,724
  37,092
  40,612
  44,285
  48,113
  52,097
  56,241
  60,547
  65,023
  69,673
  74,505
  79,528
Operating income, $m
  574
  958
  1,447
  2,057
  2,799
  3,685
  4,723
  5,920
  7,280
  8,805
  10,499
  12,353
  14,370
  16,545
  18,875
  21,357
  23,987
  26,761
  29,678
  32,735
  35,932
  39,269
  42,745
  46,365
  50,129
  54,043
  58,110
  62,337
  66,731
  71,297
EBITDA, $m
  660
  1,077
  1,608
  2,269
  3,074
  4,035
  5,160
  6,458
  7,932
  9,585
  11,417
  13,427
  15,612
  17,970
  20,495
  23,184
  26,034
  29,041
  32,202
  35,515
  38,979
  42,594
  46,362
  50,283
  54,363
  58,603
  63,011
  67,591
  72,352
  77,300
Interest expense (income), $m
  0
  84
  38
  68
  107
  155
  213
  283
  364
  458
  564
  684
  816
  960
  1,118
  1,287
  1,469
  1,663
  1,868
  2,084
  2,312
  2,550
  2,799
  3,059
  3,330
  3,612
  3,905
  4,210
  4,527
  4,856
  5,198
Earnings before tax, $m
  490
  920
  1,379
  1,950
  2,644
  3,472
  4,440
  5,556
  6,822
  8,241
  9,815
  11,538
  13,409
  15,427
  17,588
  19,888
  22,324
  24,894
  27,594
  30,424
  33,382
  36,470
  39,687
  43,035
  46,517
  50,138
  53,900
  57,811
  61,875
  66,099
Tax expense, $m
  132
  248
  372
  526
  714
  937
  1,199
  1,500
  1,842
  2,225
  2,650
  3,115
  3,621
  4,165
  4,749
  5,370
  6,028
  6,721
  7,450
  8,214
  9,013
  9,847
  10,715
  11,619
  12,560
  13,537
  14,553
  15,609
  16,706
  17,847
Net income, $m
  358
  671
  1,007
  1,423
  1,930
  2,534
  3,241
  4,056
  4,980
  6,016
  7,165
  8,422
  9,789
  11,262
  12,839
  14,518
  16,297
  18,172
  20,144
  22,209
  24,369
  26,623
  28,971
  31,415
  33,958
  36,601
  39,347
  42,202
  45,168
  48,252

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
  1,152
  1,603
  2,177
  2,889
  3,754
  4,784
  5,989
  7,377
  8,953
  10,719
  12,675
  14,820
  17,152
  19,666
  22,359
  25,226
  28,264
  31,468
  34,837
  38,367
  42,057
  45,909
  49,922
  54,100
  58,445
  62,961
  67,655
  72,533
  77,602
  82,871
Adjusted assets (=assets-cash), $m
  1,152
  1,603
  2,177
  2,889
  3,754
  4,784
  5,989
  7,377
  8,953
  10,719
  12,675
  14,820
  17,152
  19,666
  22,359
  25,226
  28,264
  31,468
  34,837
  38,367
  42,057
  45,909
  49,922
  54,100
  58,445
  62,961
  67,655
  72,533
  77,602
  82,871
Revenue / Adjusted assets
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
Average production assets, $m
  417
  581
  789
  1,046
  1,360
  1,733
  2,169
  2,672
  3,243
  3,882
  4,591
  5,368
  6,212
  7,123
  8,098
  9,136
  10,237
  11,397
  12,617
  13,896
  15,232
  16,627
  18,081
  19,594
  21,168
  22,803
  24,503
  26,270
  28,106
  30,014
Working capital, $m
  166
  231
  313
  415
  540
  688
  861
  1,061
  1,287
  1,541
  1,822
  2,131
  2,466
  2,828
  3,215
  3,627
  4,064
  4,525
  5,009
  5,516
  6,047
  6,601
  7,178
  7,778
  8,403
  9,053
  9,727
  10,429
  11,158
  11,915
Total debt, $m
  504
  910
  1,427
  2,067
  2,846
  3,773
  4,858
  6,107
  7,525
  9,114
  10,875
  12,805
  14,904
  17,167
  19,590
  22,171
  24,905
  27,789
  30,820
  33,997
  37,319
  40,785
  44,397
  48,157
  52,067
  56,132
  60,357
  64,747
  69,309
  74,051
Total liabilities, $m
  1,037
  1,443
  1,960
  2,600
  3,379
  4,306
  5,390
  6,640
  8,058
  9,647
  11,408
  13,338
  15,437
  17,700
  20,123
  22,704
  25,438
  28,321
  31,353
  34,530
  37,852
  41,318
  44,930
  48,690
  52,600
  56,665
  60,890
  65,280
  69,842
  74,584
Total equity, $m
  115
  160
  218
  289
  375
  478
  599
  738
  895
  1,072
  1,268
  1,482
  1,715
  1,967
  2,236
  2,523
  2,826
  3,147
  3,484
  3,837
  4,206
  4,591
  4,992
  5,410
  5,844
  6,296
  6,766
  7,253
  7,760
  8,287
Total liabilities and equity, $m
  1,152
  1,603
  2,178
  2,889
  3,754
  4,784
  5,989
  7,378
  8,953
  10,719
  12,676
  14,820
  17,152
  19,667
  22,359
  25,227
  28,264
  31,468
  34,837
  38,367
  42,058
  45,909
  49,922
  54,100
  58,444
  62,961
  67,656
  72,533
  77,602
  82,871
Debt-to-equity ratio
  4.370
  5.680
  6.550
  7.160
  7.580
  7.890
  8.110
  8.280
  8.400
  8.500
  8.580
  8.640
  8.690
  8.730
  8.760
  8.790
  8.810
  8.830
  8.850
  8.860
  8.870
  8.880
  8.890
  8.900
  8.910
  8.920
  8.920
  8.930
  8.930
  8.940
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
  358
  671
  1,007
  1,423
  1,930
  2,534
  3,241
  4,056
  4,980
  6,016
  7,165
  8,422
  9,789
  11,262
  12,839
  14,518
  16,297
  18,172
  20,144
  22,209
  24,369
  26,623
  28,971
  31,415
  33,958
  36,601
  39,347
  42,202
  45,168
  48,252
Depreciation, amort., depletion, $m
  86
  119
  161
  212
  275
  349
  437
  537
  651
  779
  918
  1,074
  1,242
  1,425
  1,620
  1,827
  2,047
  2,279
  2,523
  2,779
  3,046
  3,325
  3,616
  3,919
  4,234
  4,561
  4,901
  5,254
  5,621
  6,003
Funds from operations, $m
  444
  791
  1,167
  1,636
  2,205
  2,884
  3,678
  4,593
  5,632
  6,795
  8,083
  9,496
  11,031
  12,686
  14,459
  16,345
  18,344
  20,452
  22,667
  24,989
  27,416
  29,948
  32,587
  35,334
  38,191
  41,161
  44,248
  47,456
  50,790
  54,255
Change in working capital, $m
  50
  65
  82
  102
  124
  148
  173
  200
  227
  254
  281
  308
  335
  362
  387
  412
  437
  461
  484
  508
  531
  554
  577
  601
  625
  649
  675
  701
  729
  758
Cash from operations, $m
  395
  726
  1,085
  1,533
  2,081
  2,736
  3,505
  4,394
  5,405
  6,541
  7,802
  9,188
  10,696
  12,325
  14,072
  15,933
  17,907
  19,991
  22,183
  24,481
  26,885
  29,395
  32,010
  34,734
  37,567
  40,512
  43,573
  46,754
  50,061
  53,498
Maintenance CAPEX, $m
  -58
  -83
  -116
  -158
  -209
  -272
  -347
  -434
  -534
  -649
  -776
  -918
  -1,074
  -1,242
  -1,425
  -1,620
  -1,827
  -2,047
  -2,279
  -2,523
  -2,779
  -3,046
  -3,325
  -3,616
  -3,919
  -4,234
  -4,561
  -4,901
  -5,254
  -5,621
New CAPEX, $m
  -125
  -164
  -208
  -258
  -313
  -373
  -437
  -503
  -571
  -640
  -708
  -777
  -844
  -911
  -975
  -1,038
  -1,100
  -1,161
  -1,220
  -1,279
  -1,337
  -1,395
  -1,454
  -1,513
  -1,574
  -1,636
  -1,700
  -1,767
  -1,836
  -1,908
Cash from investing activities, $m
  -183
  -247
  -324
  -416
  -522
  -645
  -784
  -937
  -1,105
  -1,289
  -1,484
  -1,695
  -1,918
  -2,153
  -2,400
  -2,658
  -2,927
  -3,208
  -3,499
  -3,802
  -4,116
  -4,441
  -4,779
  -5,129
  -5,493
  -5,870
  -6,261
  -6,668
  -7,090
  -7,529
Free cash flow, $m
  211
  479
  761
  1,118
  1,558
  2,091
  2,722
  3,457
  4,300
  5,253
  6,317
  7,492
  8,778
  10,172
  11,672
  13,275
  14,980
  16,783
  18,683
  20,679
  22,769
  24,953
  27,231
  29,604
  32,074
  34,642
  37,312
  40,087
  42,971
  45,968
Issuance/(repayment) of debt, $m
  -613
  406
  516
  641
  778
  927
  1,085
  1,249
  1,418
  1,589
  1,761
  1,931
  2,098
  2,263
  2,424
  2,581
  2,734
  2,884
  3,031
  3,177
  3,322
  3,466
  3,612
  3,760
  3,910
  4,065
  4,225
  4,390
  4,562
  4,742
Issuance/(repurchase) of shares, $m
  601
  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  
  -12
  406
  516
  641
  778
  927
  1,085
  1,249
  1,418
  1,589
  1,761
  1,931
  2,098
  2,263
  2,424
  2,581
  2,734
  2,884
  3,031
  3,177
  3,322
  3,466
  3,612
  3,760
  3,910
  4,065
  4,225
  4,390
  4,562
  4,742
Total cash flow (excl. dividends), $m
  200
  885
  1,277
  1,758
  2,337
  3,018
  3,807
  4,706
  5,718
  6,842
  8,077
  9,423
  10,876
  12,435
  14,095
  15,856
  17,714
  19,667
  21,715
  23,856
  26,091
  28,420
  30,843
  33,364
  35,984
  38,707
  41,537
  44,477
  47,533
  50,710
Retained Cash Flow (-), $m
  -959
  -45
  -57
  -71
  -86
  -103
  -121
  -139
  -158
  -177
  -196
  -215
  -233
  -251
  -269
  -287
  -304
  -320
  -337
  -353
  -369
  -385
  -401
  -418
  -434
  -452
  -469
  -488
  -507
  -527
Prev. year cash balance distribution, $m
  25
  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
  -734
  840
  1,220
  1,687
  2,250
  2,915
  3,686
  4,567
  5,561
  6,666
  7,882
  9,209
  10,643
  12,183
  13,826
  15,569
  17,410
  19,347
  21,378
  23,503
  25,722
  28,034
  30,442
  32,946
  35,550
  38,256
  41,067
  43,989
  47,026
  50,183
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
  -649
  650
  816
  963
  1,080
  1,160
  1,198
  1,191
  1,144
  1,062
  953
  828
  696
  566
  445
  339
  249
  177
  121
  80
  51
  31
  18
  10
  6
  3
  1
  1
  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

FINANCIAL RATIOS  of  FTS International (FTSI)

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%

FTSI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FTSI stock intrinsic value calculation we used $1466.1 million for the last fiscal year's total revenue generated by FTS International. The default revenue input number comes from 0001 income statement of FTS International. 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 FTSI stock valuation model: a) initial revenue growth rate of 43% 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 FTSI is calculated based on our internal credit rating of FTS International, 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 FTS International.
    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 FTSI stock the variable cost ratio is equal to 52.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $416 million in the base year in the intrinsic value calculation for FTSI 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 7.5% for FTS International.

Corporate tax rate of 27% is the nominal tax rate for FTS International. 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 FTSI 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 FTSI are equal to 19.9%.

Life of production assets of 3.5 years is the average useful life of capital assets used in FTS International 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 FTSI is equal to 7.9%. 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 - $-818.3 million for FTS International - 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 109.275 million for FTS International 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 FTS International at the current share price and the inputted number of shares is $0.8 billion.

COMPANY NEWS

▶ FTS International: 3Q Earnings Snapshot   [Oct-29-18 06:44PM  Associated Press]
▶ Chesapeake Energy Stock Remains High-Risk, High-Reward   [Sep-19-18 02:10PM  InvestorPlace]
▶ FTS International: 2Q Earnings Snapshot   [Jul-31-18 07:47PM  Associated Press]
▶ Best Cheap Stocks To Buy This May   [May-02-18 10:02AM  Simply Wall St.]
▶ FTS International: 1Q Earnings Snapshot   [05:42AM  Associated Press]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.