Intrinsic value of StealthGas, Inc. - GASS

Previous Close

$3.28

  Intrinsic Value

$3.60

stock screener

  Rating & Target

hold

+10%

Previous close

$3.28

 
Intrinsic value

$3.60

 
Up/down potential

+10%

 
Rating

hold

We calculate the intrinsic value of GASS 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 0.1

 

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, %
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
Revenue, $m
  165
  176
  188
  200
  213
  226
  240
  255
  270
  285
  302
  319
  337
  355
  375
  395
  417
  439
  462
  487
  512
  539
  567
  596
  627
  660
  693
  729
  766
  805
Variable operating expenses, $m
  31
  33
  35
  38
  40
  43
  45
  48
  51
  54
  57
  60
  63
  67
  70
  74
  78
  83
  87
  91
  96
  101
  107
  112
  118
  124
  130
  137
  144
  151
Fixed operating expenses, $m
  114
  117
  120
  122
  125
  128
  130
  133
  136
  139
  142
  145
  149
  152
  155
  159
  162
  166
  169
  173
  177
  181
  185
  189
  193
  197
  202
  206
  211
  215
Total operating expenses, $m
  145
  150
  155
  160
  165
  171
  175
  181
  187
  193
  199
  205
  212
  219
  225
  233
  240
  249
  256
  264
  273
  282
  292
  301
  311
  321
  332
  343
  355
  366
Operating income, $m
  19
  26
  33
  41
  48
  56
  65
  74
  83
  93
  103
  114
  125
  137
  149
  162
  176
  191
  206
  222
  239
  257
  276
  295
  316
  338
  361
  386
  412
  439
EBITDA, $m
  61
  71
  81
  91
  102
  113
  125
  138
  151
  165
  179
  194
  210
  226
  244
  262
  281
  301
  323
  345
  368
  393
  419
  446
  475
  505
  537
  570
  605
  642
Interest expense (income), $m
  12
  21
  22
  24
  26
  27
  29
  31
  33
  35
  37
  40
  42
  44
  47
  50
  52
  55
  58
  61
  65
  68
  72
  76
  80
  84
  88
  93
  98
  103
  108
Earnings before tax, $m
  -1
  4
  9
  15
  21
  27
  34
  40
  48
  55
  63
  72
  80
  90
  100
  110
  121
  132
  145
  157
  171
  185
  200
  216
  232
  250
  269
  288
  309
  331
Tax expense, $m
  0
  1
  2
  4
  6
  7
  9
  11
  13
  15
  17
  19
  22
  24
  27
  30
  33
  36
  39
  42
  46
  50
  54
  58
  63
  68
  73
  78
  83
  89
Net income, $m
  -1
  3
  7
  11
  15
  20
  24
  29
  35
  40
  46
  52
  59
  66
  73
  80
  88
  97
  105
  115
  125
  135
  146
  158
  170
  183
  196
  210
  225
  241

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
  1,051
  1,123
  1,198
  1,276
  1,358
  1,443
  1,531
  1,623
  1,718
  1,818
  1,923
  2,031
  2,145
  2,264
  2,388
  2,518
  2,653
  2,795
  2,944
  3,099
  3,262
  3,433
  3,611
  3,799
  3,995
  4,201
  4,417
  4,643
  4,880
  5,129
Adjusted assets (=assets-cash), $m
  1,051
  1,123
  1,198
  1,276
  1,358
  1,443
  1,531
  1,623
  1,718
  1,818
  1,923
  2,031
  2,145
  2,264
  2,388
  2,518
  2,653
  2,795
  2,944
  3,099
  3,262
  3,433
  3,611
  3,799
  3,995
  4,201
  4,417
  4,643
  4,880
  5,129
Revenue / Adjusted assets
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
Average production assets, $m
  987
  1,055
  1,126
  1,199
  1,276
  1,355
  1,438
  1,524
  1,615
  1,708
  1,806
  1,909
  2,015
  2,127
  2,243
  2,365
  2,493
  2,626
  2,766
  2,912
  3,065
  3,225
  3,393
  3,569
  3,753
  3,947
  4,149
  4,362
  4,585
  4,819
Working capital, $m
  -31
  -33
  -35
  -38
  -40
  -43
  -45
  -48
  -51
  -54
  -57
  -60
  -63
  -67
  -70
  -74
  -78
  -83
  -87
  -91
  -96
  -101
  -107
  -112
  -118
  -124
  -130
  -137
  -144
  -151
Total debt, $m
  415
  445
  476
  509
  543
  578
  614
  652
  692
  733
  776
  821
  868
  918
  969
  1,023
  1,079
  1,138
  1,199
  1,263
  1,331
  1,402
  1,476
  1,553
  1,634
  1,720
  1,809
  1,902
  2,001
  2,104
Total liabilities, $m
  435
  465
  496
  528
  562
  597
  634
  672
  711
  753
  796
  841
  888
  937
  989
  1,042
  1,098
  1,157
  1,219
  1,283
  1,351
  1,421
  1,495
  1,573
  1,654
  1,739
  1,828
  1,922
  2,020
  2,123
Total equity, $m
  616
  658
  702
  748
  796
  845
  897
  951
  1,007
  1,066
  1,127
  1,190
  1,257
  1,327
  1,399
  1,475
  1,555
  1,638
  1,725
  1,816
  1,912
  2,012
  2,116
  2,226
  2,341
  2,462
  2,588
  2,721
  2,860
  3,006
Total liabilities and equity, $m
  1,051
  1,123
  1,198
  1,276
  1,358
  1,442
  1,531
  1,623
  1,718
  1,819
  1,923
  2,031
  2,145
  2,264
  2,388
  2,517
  2,653
  2,795
  2,944
  3,099
  3,263
  3,433
  3,611
  3,799
  3,995
  4,201
  4,416
  4,643
  4,880
  5,129
Debt-to-equity ratio
  0.670
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
Adjusted equity ratio
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586
  0.586

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1
  3
  7
  11
  15
  20
  24
  29
  35
  40
  46
  52
  59
  66
  73
  80
  88
  97
  105
  115
  125
  135
  146
  158
  170
  183
  196
  210
  225
  241
Depreciation, amort., depletion, $m
  42
  45
  47
  51
  54
  57
  61
  64
  68
  72
  76
  81
  85
  90
  95
  100
  105
  111
  117
  123
  129
  136
  143
  151
  158
  167
  175
  184
  193
  203
Funds from operations, $m
  40
  47
  54
  61
  69
  77
  85
  94
  103
  112
  122
  133
  144
  155
  167
  180
  193
  207
  222
  238
  254
  271
  289
  308
  328
  349
  371
  394
  419
  445
Change in working capital, $m
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
Cash from operations, $m
  42
  49
  56
  64
  71
  79
  88
  97
  106
  115
  125
  136
  147
  159
  171
  184
  197
  212
  227
  242
  259
  276
  294
  314
  334
  355
  378
  401
  426
  452
Maintenance CAPEX, $m
  -39
  -42
  -45
  -47
  -51
  -54
  -57
  -61
  -64
  -68
  -72
  -76
  -81
  -85
  -90
  -95
  -100
  -105
  -111
  -117
  -123
  -129
  -136
  -143
  -151
  -158
  -167
  -175
  -184
  -193
New CAPEX, $m
  -65
  -68
  -71
  -74
  -76
  -80
  -83
  -86
  -90
  -94
  -98
  -102
  -107
  -112
  -117
  -122
  -127
  -133
  -140
  -146
  -153
  -160
  -168
  -176
  -184
  -193
  -203
  -213
  -223
  -234
Cash from investing activities, $m
  -104
  -110
  -116
  -121
  -127
  -134
  -140
  -147
  -154
  -162
  -170
  -178
  -188
  -197
  -207
  -217
  -227
  -238
  -251
  -263
  -276
  -289
  -304
  -319
  -335
  -351
  -370
  -388
  -407
  -427
Free cash flow, $m
  -62
  -60
  -59
  -57
  -56
  -54
  -52
  -50
  -49
  -47
  -45
  -42
  -40
  -38
  -35
  -33
  -30
  -27
  -24
  -21
  -17
  -13
  -10
  -5
  -1
  3
  8
  14
  19
  25
Issuance/(repayment) of debt, $m
  30
  30
  31
  32
  34
  35
  37
  38
  40
  41
  43
  45
  47
  49
  51
  54
  56
  59
  62
  64
  67
  71
  74
  78
  81
  85
  89
  94
  98
  103
Issuance/(repurchase) of shares, $m
  43
  40
  37
  35
  33
  30
  27
  24
  21
  18
  15
  11
  8
  4
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  73
  70
  68
  67
  67
  65
  64
  62
  61
  59
  58
  56
  55
  53
  51
  54
  56
  59
  62
  64
  67
  71
  74
  78
  81
  85
  89
  94
  98
  103
Total cash flow (excl. dividends), $m
  12
  9
  10
  10
  11
  11
  11
  12
  12
  13
  14
  14
  15
  15
  16
  21
  26
  32
  38
  44
  50
  57
  64
  72
  80
  89
  98
  107
  117
  128
Retained Cash Flow (-), $m
  -43
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -59
  -61
  -64
  -67
  -70
  -73
  -76
  -80
  -83
  -87
  -91
  -95
  -100
  -105
  -110
  -115
  -121
  -126
  -133
  -139
  -146
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
  -32
  -33
  -34
  -36
  -37
  -39
  -40
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -57
  -55
  -53
  -51
  -49
  -47
  -45
  -43
  -40
  -38
  -35
  -32
  -29
  -25
  -22
  -18
Discount rate, %
  6.80
  7.14
  7.50
  7.87
  8.27
  8.68
  9.11
  9.57
  10.05
  10.55
  11.08
  11.63
  12.21
  12.82
  13.46
  14.14
  14.84
  15.59
  16.37
  17.18
  18.04
  18.94
  19.89
  20.89
  21.93
  23.03
  24.18
  25.39
  26.66
  27.99
PV of cash for distribution, $m
  -30
  -29
  -28
  -26
  -25
  -23
  -22
  -20
  -18
  -17
  -15
  -13
  -12
  -10
  -9
  -7
  -5
  -4
  -3
  -2
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  90.2
  82.6
  76.4
  71.3
  67.2
  63.7
  60.9
  58.6
  56.8
  55.4
  54.3
  53.5
  53.0
  52.8
  52.8
  52.8
  52.8
  52.8
  52.8
  52.8
  52.8
  52.8
  52.8
  52.8
  52.8
  52.8
  52.8
  52.8
  52.8
  52.8

StealthGas Inc. is a provider of international seaborne transportation services to liquefied petroleum gas (LPG) producers and users, as well as crude oil and product carriers to oil producers, refineries and commodities traders. The Company owns a fleet of LPG carriers. Its LPG carriers carry various petroleum gas products in liquefied form, including propane, butane, butadiene, isopropane, propylene and vinyl chloride monomer, which are all byproducts of the production of crude oil and natural gas. The medium range product carriers in its fleet are capable of carrying refined petroleum products, such as gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, while its Aframax tanker is used for carrying crude oil. Its fleet consists of approximately 50 LPG carriers, including two chartered-in LPG carriers, two 2008-built product carriers, a 2009-built product carrier and a 2010-built Aframax crude oil tanker.

FINANCIAL RATIOS  of  StealthGas, Inc. (GASS)

Valuation Ratios
P/E Ratio -16.3
Price to Sales 0.9
Price to Book 0.2
Price to Tangible Book
Price to Cash Flow 3.6
Price to Free Cash Flow -6.5
Growth Rates
Sales Growth Rate 2.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -63.9%
Cap. Spend. - 3 Yr. Gr. Rate -14.7%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 59.8%
Total Debt to Equity 69.3%
Interest Coverage 0
Management Effectiveness
Return On Assets 0.4%
Ret/ On Assets - 3 Yr. Avg. 1.2%
Return On Total Capital -0.8%
Ret/ On T. Cap. - 3 Yr. Avg. 0.3%
Return On Equity -1.4%
Return On Equity - 3 Yr. Avg. 0.5%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 48.6%
Gross Margin - 3 Yr. Avg. 51.6%
EBITDA Margin 29.9%
EBITDA Margin - 3 Yr. Avg. 34.5%
Operating Margin 4.9%
Oper. Margin - 3 Yr. Avg. 10.5%
Pre-Tax Margin -5.6%
Pre-Tax Margin - 3 Yr. Avg. 2.1%
Net Profit Margin -5.6%
Net Profit Margin - 3 Yr. Avg. 2.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

GASS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GASS stock intrinsic value calculation we used $154 million for the last fiscal year's total revenue generated by StealthGas, Inc.. The default revenue input number comes from 0001 income statement of StealthGas, 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 GASS stock valuation model: a) initial revenue growth rate of 7.1% 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 6.8%, whose default value for GASS is calculated based on our internal credit rating of StealthGas, 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 StealthGas, 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 GASS stock the variable cost ratio is equal to 18.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $112 million in the base year in the intrinsic value calculation for GASS 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 StealthGas, Inc..

Corporate tax rate of 27% is the nominal tax rate for StealthGas, 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 GASS 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 GASS are equal to 598.4%.

Life of production assets of 23.7 years is the average useful life of capital assets used in StealthGas, 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 GASS is equal to -18.8%. 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 - $573.478772 million for StealthGas, 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 39.859 million for StealthGas, 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 StealthGas, Inc. at the current share price and the inputted number of shares is $0.1 billion.

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