Intrinsic value of StealthGas - GASS

Previous Close

$3.47

  Intrinsic Value

$3.60

stock screener

  Rating & Target

hold

+4%

Previous close

$3.47

 
Intrinsic value

$3.60

 
Up/down potential

+4%

 
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
  177
  188
  201
  214
  227
  241
  255
  270
  286
  302
  320
  337
  356
  376
  396
  417
  440
  463
  488
  513
  540
  568
  598
  628
  661
  695
  730
  768
  807
Variable operating expenses, $m
  31
  33
  35
  38
  40
  43
  45
  48
  51
  54
  57
  60
  63
  67
  71
  74
  78
  83
  87
  92
  96
  102
  107
  112
  118
  124
  131
  137
  144
  152
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
  226
  233
  240
  249
  256
  265
  273
  283
  292
  301
  311
  321
  333
  343
  355
  367
Operating income, $m
  20
  26
  34
  41
  49
  57
  65
  74
  83
  93
  103
  114
  125
  137
  150
  163
  177
  191
  207
  223
  240
  258
  277
  296
  317
  339
  363
  387
  413
  440
EBITDA, $m
  61
  71
  81
  92
  103
  114
  126
  138
  152
  165
  180
  195
  211
  227
  245
  263
  282
  302
  324
  346
  369
  394
  420
  447
  476
  506
  538
  572
  607
  644
Interest expense (income), $m
  12
  21
  22
  24
  26
  28
  29
  31
  33
  35
  37
  40
  42
  44
  47
  50
  52
  55
  58
  62
  65
  68
  72
  76
  80
  84
  88
  93
  98
  103
  108
Earnings before tax, $m
  -1
  4
  9
  15
  21
  27
  34
  41
  48
  56
  64
  72
  81
  90
  100
  111
  121
  133
  145
  158
  171
  186
  201
  217
  233
  251
  270
  289
  310
  332
Tax expense, $m
  0
  1
  3
  4
  6
  7
  9
  11
  13
  15
  17
  19
  22
  24
  27
  30
  33
  36
  39
  43
  46
  50
  54
  58
  63
  68
  73
  78
  84
  90
Net income, $m
  -1
  3
  7
  11
  15
  20
  25
  30
  35
  41
  46
  53
  59
  66
  73
  81
  89
  97
  106
  115
  125
  136
  147
  158
  170
  183
  197
  211
  226
  242

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
  1,053
  1,125
  1,201
  1,279
  1,361
  1,445
  1,534
  1,626
  1,722
  1,822
  1,927
  2,036
  2,149
  2,268
  2,393
  2,523
  2,659
  2,801
  2,950
  3,106
  3,269
  3,440
  3,619
  3,806
  4,003
  4,209
  4,426
  4,652
  4,890
  5,139
Adjusted assets (=assets-cash), $m
  1,053
  1,125
  1,201
  1,279
  1,361
  1,445
  1,534
  1,626
  1,722
  1,822
  1,927
  2,036
  2,149
  2,268
  2,393
  2,523
  2,659
  2,801
  2,950
  3,106
  3,269
  3,440
  3,619
  3,806
  4,003
  4,209
  4,426
  4,652
  4,890
  5,139
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
  989
  1,057
  1,128
  1,202
  1,278
  1,358
  1,441
  1,528
  1,618
  1,712
  1,810
  1,912
  2,019
  2,131
  2,248
  2,370
  2,498
  2,631
  2,771
  2,918
  3,071
  3,232
  3,400
  3,576
  3,761
  3,955
  4,158
  4,371
  4,594
  4,828
Working capital, $m
  -31
  -33
  -35
  -38
  -40
  -43
  -45
  -48
  -51
  -54
  -57
  -60
  -63
  -67
  -71
  -74
  -78
  -83
  -87
  -92
  -96
  -102
  -107
  -112
  -118
  -124
  -131
  -137
  -144
  -152
Total debt, $m
  416
  446
  477
  510
  544
  579
  615
  654
  693
  735
  778
  823
  870
  919
  971
  1,025
  1,081
  1,140
  1,202
  1,266
  1,334
  1,404
  1,479
  1,556
  1,638
  1,723
  1,813
  1,906
  2,005
  2,108
Total liabilities, $m
  436
  466
  497
  530
  563
  598
  635
  673
  713
  754
  798
  843
  890
  939
  991
  1,044
  1,101
  1,160
  1,221
  1,286
  1,353
  1,424
  1,498
  1,576
  1,657
  1,743
  1,832
  1,926
  2,024
  2,128
Total equity, $m
  617
  659
  704
  749
  797
  847
  899
  953
  1,009
  1,068
  1,129
  1,193
  1,260
  1,329
  1,402
  1,478
  1,558
  1,641
  1,729
  1,820
  1,915
  2,016
  2,121
  2,231
  2,346
  2,467
  2,593
  2,726
  2,866
  3,012
Total liabilities and equity, $m
  1,053
  1,125
  1,201
  1,279
  1,360
  1,445
  1,534
  1,626
  1,722
  1,822
  1,927
  2,036
  2,150
  2,268
  2,393
  2,522
  2,659
  2,801
  2,950
  3,106
  3,268
  3,440
  3,619
  3,807
  4,003
  4,210
  4,425
  4,652
  4,890
  5,140
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
  25
  30
  35
  41
  46
  53
  59
  66
  73
  81
  89
  97
  106
  115
  125
  136
  147
  158
  170
  183
  197
  211
  226
  242
Depreciation, amort., depletion, $m
  42
  45
  48
  51
  54
  57
  61
  64
  68
  72
  76
  81
  85
  90
  95
  100
  105
  111
  117
  123
  130
  136
  143
  151
  159
  167
  175
  184
  194
  204
Funds from operations, $m
  41
  48
  54
  62
  69
  77
  86
  94
  103
  113
  123
  133
  144
  156
  168
  181
  194
  208
  223
  238
  255
  272
  290
  309
  329
  350
  372
  396
  420
  446
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
  43
  50
  57
  64
  72
  80
  88
  97
  106
  116
  126
  137
  148
  159
  172
  185
  198
  212
  227
  243
  260
  277
  295
  315
  335
  356
  379
  402
  427
  453
Maintenance CAPEX, $m
  -39
  -42
  -45
  -48
  -51
  -54
  -57
  -61
  -64
  -68
  -72
  -76
  -81
  -85
  -90
  -95
  -100
  -105
  -111
  -117
  -123
  -130
  -136
  -143
  -151
  -159
  -167
  -175
  -184
  -194
New CAPEX, $m
  -67
  -68
  -71
  -74
  -77
  -80
  -83
  -87
  -90
  -94
  -98
  -102
  -107
  -112
  -117
  -122
  -128
  -134
  -140
  -146
  -153
  -161
  -168
  -176
  -185
  -194
  -203
  -213
  -223
  -234
Cash from investing activities, $m
  -106
  -110
  -116
  -122
  -128
  -134
  -140
  -148
  -154
  -162
  -170
  -178
  -188
  -197
  -207
  -217
  -228
  -239
  -251
  -263
  -276
  -291
  -304
  -319
  -336
  -353
  -370
  -388
  -407
  -428
Free cash flow, $m
  -64
  -60
  -59
  -57
  -56
  -54
  -52
  -50
  -49
  -47
  -44
  -42
  -40
  -38
  -35
  -32
  -30
  -27
  -24
  -20
  -17
  -13
  -9
  -5
  -1
  4
  9
  14
  19
  25
Issuance/(repayment) of debt, $m
  31
  30
  31
  32
  34
  35
  37
  38
  40
  41
  43
  45
  47
  49
  51
  54
  56
  59
  62
  65
  68
  71
  74
  78
  81
  85
  89
  94
  98
  103
Issuance/(repurchase) of shares, $m
  44
  40
  37
  35
  32
  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  
  75
  70
  68
  67
  66
  65
  64
  62
  61
  59
  58
  56
  55
  53
  51
  54
  56
  59
  62
  65
  68
  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
  27
  32
  38
  44
  51
  58
  65
  72
  81
  89
  98
  108
  118
  128
Retained Cash Flow (-), $m
  -44
  -43
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -59
  -61
  -64
  -67
  -70
  -73
  -76
  -80
  -83
  -87
  -91
  -96
  -100
  -105
  -110
  -115
  -121
  -127
  -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
  -56
  -55
  -53
  -51
  -49
  -47
  -45
  -43
  -40
  -37
  -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
  -24
  -22
  -20
  -19
  -17
  -15
  -13
  -12
  -10
  -8
  -7
  -5
  -4
  -3
  -2
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  90.0
  82.5
  76.3
  71.2
  67.1
  63.7
  60.9
  58.7
  56.8
  55.4
  54.4
  53.6
  53.1
  52.9
  52.9
  52.9
  52.9
  52.9
  52.9
  52.9
  52.9
  52.9
  52.9
  52.9
  52.9
  52.9
  52.9
  52.9
  52.9
  52.9

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 (GASS)

Valuation Ratios
P/E Ratio -17.3
Price to Sales 1
Price to Book 0.2
Price to Tangible Book
Price to Cash Flow 3.8
Price to Free Cash Flow -6.9
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 $154.311921 million for the last fiscal year's total revenue generated by StealthGas. The default revenue input number comes from 0001 income statement of StealthGas. 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, 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.
    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.

Corporate tax rate of 27% is the nominal tax rate for StealthGas. 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 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 - 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 39.861 million for StealthGas 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 at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

▶ How Financially Strong Is StealthGas Inc (NASDAQ:GASS)?   [Sep-18-18 08:49AM  Simply Wall St.]
▶ StealthGas: 2Q Earnings Snapshot   [09:25AM  Associated Press]
▶ StealthGas Inc. to Host Earnings Call   [09:00AM  ACCESSWIRE]
▶ StealthGas: 1Q Earnings Snapshot   [May-24-18 10:00AM  Associated Press]
▶ Does StealthGas Inc (NASDAQ:GASS) Go Up With The Market?   [Apr-03-18 07:59AM  Simply Wall St.]
▶ StealthGas posts 4Q profit   [10:29AM  Associated Press]
▶ StealthGas Inc. to Host Earnings Call   [10:05AM  ACCESSWIRE]
▶ StealthGas reports 3Q loss   [Nov-22-17 09:49AM  Associated Press]
▶ StealthGas Inc. to Host Earnings Call   [07:30AM  ACCESSWIRE]
▶ StealthGas reports 2Q loss   [Aug-24-17 09:57PM  Associated Press]
▶ Aegean Marine (ANW) Jumps: Stock Rises 8.7%   [Jun-02-17 08:35AM  Zacks]
▶ Should StealthGas (GASS) Be On Your Radar Now?   [May-31-17 08:43AM  Zacks]
▶ StealthGas posts 1Q profit   [09:24AM  Associated Press]
▶ StealthGas reports 4Q loss   [09:39AM  Associated Press]
▶ What Makes StealthGas (GASS) a Strong Sell?   [Dec-15-16 08:08AM  Zacks]
▶ Hedge Fund Sentiment Is Stagnant On StealthGas Inc. (GASS)   [Dec-12-16 05:38AM  Insider Monkey]
▶ STEALTHGAS INC. Financials   [01:04PM  EDGAR Online Financials]

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