Intrinsic value of Gulfport Energy Corporation - GPOR

Previous Close

$4.79

  Intrinsic Value

$44.65

stock screener

  Rating & Target

str. buy

+832%

Previous close

$4.79

 
Intrinsic value

$44.65

 
Up/down potential

+832%

 
Rating

str. buy

We calculate the intrinsic value of GPOR 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, %
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
  4.87
  4.89
  4.90
  4.91
  4.92
  4.92
  4.93
  4.94
  4.95
  4.95
  4.96
  4.96
  4.96
  4.97
  4.97
  4.97
  4.98
Revenue, $m
  1,416
  1,480
  1,548
  1,620
  1,696
  1,776
  1,860
  1,948
  2,042
  2,140
  2,243
  2,352
  2,466
  2,586
  2,712
  2,845
  2,985
  3,131
  3,286
  3,448
  3,618
  3,797
  3,985
  4,182
  4,390
  4,608
  4,837
  5,077
  5,330
  5,595
Variable operating expenses, $m
  804
  815
  828
  841
  854
  869
  884
  900
  917
  934
  405
  425
  445
  467
  490
  514
  539
  566
  594
  623
  654
  686
  720
  756
  793
  832
  874
  917
  963
  1,011
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
  804
  815
  828
  841
  854
  869
  884
  900
  917
  934
  405
  425
  445
  467
  490
  514
  539
  566
  594
  623
  654
  686
  720
  756
  793
  832
  874
  917
  963
  1,011
Operating income, $m
  612
  665
  721
  780
  842
  907
  976
  1,048
  1,125
  1,205
  1,838
  1,927
  2,020
  2,119
  2,222
  2,331
  2,446
  2,566
  2,692
  2,825
  2,964
  3,111
  3,265
  3,427
  3,597
  3,775
  3,963
  4,160
  4,367
  4,584
EBITDA, $m
  1,667
  1,743
  1,823
  1,908
  1,997
  2,091
  2,190
  2,294
  2,404
  2,520
  2,641
  2,769
  2,904
  3,045
  3,194
  3,350
  3,515
  3,688
  3,869
  4,060
  4,261
  4,471
  4,693
  4,925
  5,170
  5,426
  5,696
  5,979
  6,276
  6,589
Interest expense (income), $m
  69
  136
  144
  152
  161
  170
  180
  190
  201
  212
  224
  237
  250
  264
  279
  294
  310
  327
  345
  364
  384
  405
  427
  450
  474
  499
  526
  554
  583
  614
  647
Earnings before tax, $m
  476
  522
  569
  619
  672
  727
  786
  848
  913
  981
  1,601
  1,677
  1,756
  1,840
  1,928
  2,021
  2,118
  2,221
  2,328
  2,441
  2,560
  2,684
  2,815
  2,953
  3,098
  3,249
  3,409
  3,577
  3,753
  3,937
Tax expense, $m
  129
  141
  154
  167
  181
  196
  212
  229
  246
  265
  432
  453
  474
  497
  521
  546
  572
  600
  629
  659
  691
  725
  760
  797
  836
  877
  920
  966
  1,013
  1,063
Net income, $m
  348
  381
  415
  452
  490
  531
  574
  619
  666
  716
  1,169
  1,224
  1,282
  1,343
  1,408
  1,475
  1,546
  1,621
  1,699
  1,782
  1,869
  1,960
  2,055
  2,156
  2,261
  2,372
  2,489
  2,611
  2,739
  2,874

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
  6,321
  6,609
  6,913
  7,233
  7,571
  7,927
  8,302
  8,698
  9,114
  9,552
  10,013
  10,498
  11,008
  11,544
  12,108
  12,701
  13,325
  13,980
  14,668
  15,392
  16,152
  16,951
  17,790
  18,671
  19,598
  20,570
  21,592
  22,666
  23,793
  24,977
Adjusted assets (=assets-cash), $m
  6,321
  6,609
  6,913
  7,233
  7,571
  7,927
  8,302
  8,698
  9,114
  9,552
  10,013
  10,498
  11,008
  11,544
  12,108
  12,701
  13,325
  13,980
  14,668
  15,392
  16,152
  16,951
  17,790
  18,671
  19,598
  20,570
  21,592
  22,666
  23,793
  24,977
Revenue / Adjusted assets
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
Average production assets, $m
  5,529
  5,781
  6,047
  6,327
  6,622
  6,934
  7,262
  7,608
  7,972
  8,355
  8,758
  9,183
  9,629
  10,098
  10,591
  11,110
  11,655
  12,228
  12,831
  13,463
  14,128
  14,827
  15,561
  16,332
  17,142
  17,993
  18,887
  19,826
  20,812
  21,848
Working capital, $m
  -287
  -301
  -314
  -329
  -344
  -360
  -378
  -396
  -414
  -434
  -455
  -477
  -501
  -525
  -551
  -578
  -606
  -636
  -667
  -700
  -734
  -771
  -809
  -849
  -891
  -935
  -982
  -1,031
  -1,082
  -1,136
Total debt, $m
  2,243
  2,373
  2,509
  2,653
  2,805
  2,966
  3,135
  3,313
  3,500
  3,697
  3,904
  4,123
  4,352
  4,593
  4,847
  5,114
  5,395
  5,689
  5,999
  6,325
  6,667
  7,026
  7,404
  7,801
  8,217
  8,655
  9,115
  9,598
  10,105
  10,638
Total liabilities, $m
  2,845
  2,974
  3,111
  3,255
  3,407
  3,567
  3,736
  3,914
  4,101
  4,298
  4,506
  4,724
  4,954
  5,195
  5,449
  5,716
  5,996
  6,291
  6,601
  6,926
  7,268
  7,628
  8,005
  8,402
  8,819
  9,257
  9,717
  10,200
  10,707
  11,240
Total equity, $m
  3,477
  3,635
  3,802
  3,978
  4,164
  4,360
  4,566
  4,784
  5,013
  5,254
  5,507
  5,774
  6,054
  6,349
  6,660
  6,986
  7,328
  7,689
  8,067
  8,465
  8,884
  9,323
  9,784
  10,269
  10,779
  11,314
  11,876
  12,466
  13,086
  13,737
Total liabilities and equity, $m
  6,322
  6,609
  6,913
  7,233
  7,571
  7,927
  8,302
  8,698
  9,114
  9,552
  10,013
  10,498
  11,008
  11,544
  12,109
  12,702
  13,324
  13,980
  14,668
  15,391
  16,152
  16,951
  17,789
  18,671
  19,598
  20,571
  21,593
  22,666
  23,793
  24,977
Debt-to-equity ratio
  0.650
  0.650
  0.660
  0.670
  0.670
  0.680
  0.690
  0.690
  0.700
  0.700
  0.710
  0.710
  0.720
  0.720
  0.730
  0.730
  0.740
  0.740
  0.740
  0.750
  0.750
  0.750
  0.760
  0.760
  0.760
  0.770
  0.770
  0.770
  0.770
  0.770
Adjusted equity ratio
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  348
  381
  415
  452
  490
  531
  574
  619
  666
  716
  1,169
  1,224
  1,282
  1,343
  1,408
  1,475
  1,546
  1,621
  1,699
  1,782
  1,869
  1,960
  2,055
  2,156
  2,261
  2,372
  2,489
  2,611
  2,739
  2,874
Depreciation, amort., depletion, $m
  1,055
  1,078
  1,103
  1,128
  1,155
  1,184
  1,214
  1,246
  1,279
  1,314
  804
  842
  883
  926
  972
  1,019
  1,069
  1,122
  1,177
  1,235
  1,296
  1,360
  1,428
  1,498
  1,573
  1,651
  1,733
  1,819
  1,909
  2,004
Funds from operations, $m
  1,403
  1,459
  1,518
  1,580
  1,646
  1,715
  1,788
  1,865
  1,946
  2,031
  1,972
  2,067
  2,166
  2,270
  2,379
  2,495
  2,616
  2,743
  2,877
  3,017
  3,165
  3,320
  3,483
  3,654
  3,834
  4,023
  4,221
  4,430
  4,649
  4,879
Change in working capital, $m
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -33
  -35
  -36
  -38
  -40
  -42
  -44
  -46
  -49
  -51
  -54
Cash from operations, $m
  1,415
  1,472
  1,532
  1,595
  1,661
  1,731
  1,805
  1,883
  1,965
  2,051
  1,993
  2,089
  2,189
  2,294
  2,405
  2,521
  2,644
  2,773
  2,908
  3,050
  3,199
  3,356
  3,521
  3,694
  3,876
  4,067
  4,268
  4,479
  4,700
  4,933
Maintenance CAPEX, $m
  -485
  -507
  -530
  -555
  -580
  -608
  -636
  -666
  -698
  -731
  -767
  -804
  -842
  -883
  -926
  -972
  -1,019
  -1,069
  -1,122
  -1,177
  -1,235
  -1,296
  -1,360
  -1,428
  -1,498
  -1,573
  -1,651
  -1,733
  -1,819
  -1,909
New CAPEX, $m
  -239
  -252
  -266
  -280
  -296
  -312
  -328
  -346
  -364
  -383
  -403
  -424
  -446
  -469
  -493
  -519
  -545
  -573
  -602
  -633
  -665
  -699
  -734
  -771
  -810
  -851
  -894
  -939
  -986
  -1,036
Cash from investing activities, $m
  -724
  -759
  -796
  -835
  -876
  -920
  -964
  -1,012
  -1,062
  -1,114
  -1,170
  -1,228
  -1,288
  -1,352
  -1,419
  -1,491
  -1,564
  -1,642
  -1,724
  -1,810
  -1,900
  -1,995
  -2,094
  -2,199
  -2,308
  -2,424
  -2,545
  -2,672
  -2,805
  -2,945
Free cash flow, $m
  691
  713
  736
  760
  785
  812
  841
  871
  903
  936
  824
  861
  900
  942
  985
  1,031
  1,079
  1,130
  1,184
  1,240
  1,299
  1,361
  1,427
  1,495
  1,568
  1,643
  1,723
  1,807
  1,895
  1,987
Issuance/(repayment) of debt, $m
  121
  129
  137
  144
  152
  160
  169
  178
  187
  197
  207
  218
  230
  241
  254
  267
  280
  295
  310
  326
  342
  359
  378
  397
  417
  438
  460
  483
  507
  533
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  121
  129
  137
  144
  152
  160
  169
  178
  187
  197
  207
  218
  230
  241
  254
  267
  280
  295
  310
  326
  342
  359
  378
  397
  417
  438
  460
  483
  507
  533
Total cash flow (excl. dividends), $m
  813
  843
  872
  904
  937
  972
  1,010
  1,049
  1,090
  1,133
  1,031
  1,079
  1,130
  1,183
  1,239
  1,298
  1,360
  1,425
  1,494
  1,566
  1,641
  1,721
  1,804
  1,892
  1,984
  2,081
  2,183
  2,290
  2,402
  2,520
Retained Cash Flow (-), $m
  -149
  -158
  -167
  -176
  -186
  -196
  -206
  -217
  -229
  -241
  -254
  -267
  -281
  -295
  -310
  -326
  -343
  -360
  -379
  -398
  -418
  -439
  -462
  -485
  -509
  -535
  -562
  -590
  -620
  -651
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
  664
  684
  705
  728
  751
  777
  803
  831
  861
  892
  777
  812
  849
  888
  929
  972
  1,017
  1,065
  1,115
  1,168
  1,223
  1,281
  1,343
  1,407
  1,475
  1,546
  1,621
  1,700
  1,782
  1,869
Discount rate, %
  5.60
  5.88
  6.17
  6.48
  6.81
  7.15
  7.50
  7.88
  8.27
  8.69
  9.12
  9.58
  10.06
  10.56
  11.09
  11.64
  12.22
  12.84
  13.48
  14.15
  14.86
  15.60
  16.38
  17.20
  18.06
  18.96
  19.91
  20.91
  21.95
  23.05
PV of cash for distribution, $m
  629
  611
  589
  566
  541
  513
  484
  453
  421
  388
  298
  271
  244
  218
  192
  167
  143
  121
  101
  83
  67
  53
  41
  31
  23
  17
  12
  8
  6
  4
Current shareholders' claim on cash, %
  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
  100.0

Gulfport Energy Corporation is an oil and natural gas exploration and production company. The Company focuses on the exploitation and acquisition of natural gas, natural gas liquids and crude oil in the United States. The Company's properties are located in the Utica Shale in Eastern Ohio and along the Louisiana Gulf Coast in the West Cote Blanche Bay (WCBB) and Hackberry fields. The Company also has an interest in producing properties in Northwestern Colorado in the Niobrara Formation and in Western North Dakota in the Bakken Formation. The Company also holds an acreage position in the Alberta oil sands in Canada through its interest in Grizzly Oil Sands ULC and an interest in an entity that operates in the Phu Horm gas field in Thailand. The Company also owns interests in various fields, which includes Deer Island, Fay South, Crest, Squaw Cheek, Green River Basin and Watonga Chickasha Trend.

FINANCIAL RATIOS  of  Gulfport Energy Corporation (GPOR)

Valuation Ratios
P/E Ratio -0.8
Price to Sales 2
Price to Book 0.3
Price to Tangible Book
Price to Cash Flow 2.3
Price to Free Cash Flow -1.8
Growth Rates
Sales Growth Rate -45.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -52.4%
Cap. Spend. - 3 Yr. Gr. Rate -1.3%
Financial Strength
Quick Ratio NaN
Current Ratio 0.5
LT Debt to Equity 73%
Total Debt to Equity 73%
Interest Coverage -13
Management Effectiveness
Return On Assets -24.1%
Ret/ On Assets - 3 Yr. Avg. -16.5%
Return On Total Capital -29%
Ret/ On T. Cap. - 3 Yr. Avg. -20.2%
Return On Equity -46.4%
Return On Equity - 3 Yr. Avg. -30.5%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 78.8%
Gross Margin - 3 Yr. Avg. 85.2%
EBITDA Margin -173.1%
EBITDA Margin - 3 Yr. Avg. -74.1%
Operating Margin -231.1%
Oper. Margin - 3 Yr. Avg. -129.9%
Pre-Tax Margin -254.7%
Pre-Tax Margin - 3 Yr. Avg. -134.6%
Net Profit Margin -253.9%
Net Profit Margin - 3 Yr. Avg. -130%
Effective Tax Rate 0.3%
Eff/ Tax Rate - 3 Yr. Avg. 18.7%
Payout Ratio 0%

GPOR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GPOR stock intrinsic value calculation we used $1355 million for the last fiscal year's total revenue generated by Gulfport Energy Corporation. The default revenue input number comes from 0001 income statement of Gulfport Energy Corporation. 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 GPOR stock valuation model: a) initial revenue growth rate of 4.5% 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 5.6%, whose default value for GPOR is calculated based on our internal credit rating of Gulfport Energy Corporation, 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 Gulfport Energy Corporation.
    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 GPOR stock the variable cost ratio is equal to 58.5%.

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 GPOR 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 6.4% for Gulfport Energy Corporation.

Corporate tax rate of 27% is the nominal tax rate for Gulfport Energy Corporation. 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 GPOR 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 GPOR are equal to 390.5%.

Life of production assets of 10.9 years is the average useful life of capital assets used in Gulfport Energy Corporation 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 GPOR is equal to -20.3%. 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 - $3327.768 million for Gulfport Energy Corporation - 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 163.488 million for Gulfport Energy Corporation 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 Gulfport Energy Corporation at the current share price and the inputted number of shares is $0.8 billion.

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