Intrinsic value of Helmerich & Payne, Inc. - HP

Previous Close

$62.52

  Intrinsic Value

$9.70

stock screener

  Rating & Target

str. sell

-84%

Previous close

$62.52

 
Intrinsic value

$9.70

 
Up/down potential

-84%

 
Rating

str. sell

We calculate the intrinsic value of HP 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 6.8

 

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, %
  31.30
  28.67
  26.30
  24.17
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.25
  12.43
  11.69
  11.02
  10.41
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
  7.33
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
Revenue, $m
  3,265
  4,202
  5,307
  6,590
  8,056
  9,710
  11,553
  13,584
  15,801
  18,201
  20,780
  23,534
  26,458
  29,550
  32,805
  36,222
  39,798
  43,534
  47,429
  51,486
  55,706
  60,095
  64,656
  69,396
  74,321
  79,440
  84,762
  90,297
  96,054
  102,047
Variable operating expenses, $m
  2,285
  2,936
  3,704
  4,597
  5,616
  6,767
  8,048
  9,461
  11,002
  12,671
  14,451
  16,366
  18,400
  20,551
  22,815
  25,191
  27,678
  30,276
  32,985
  35,806
  38,741
  41,793
  44,965
  48,261
  51,687
  55,247
  58,948
  62,797
  66,801
  70,969
Fixed operating expenses, $m
  744
  760
  777
  794
  812
  830
  848
  866
  886
  905
  925
  945
  966
  987
  1,009
  1,031
  1,054
  1,077
  1,101
  1,125
  1,150
  1,175
  1,201
  1,227
  1,254
  1,282
  1,310
  1,339
  1,368
  1,398
Total operating expenses, $m
  3,029
  3,696
  4,481
  5,391
  6,428
  7,597
  8,896
  10,327
  11,888
  13,576
  15,376
  17,311
  19,366
  21,538
  23,824
  26,222
  28,732
  31,353
  34,086
  36,931
  39,891
  42,968
  46,166
  49,488
  52,941
  56,529
  60,258
  64,136
  68,169
  72,367
Operating income, $m
  237
  505
  825
  1,199
  1,628
  2,114
  2,657
  3,257
  3,913
  4,624
  5,404
  6,222
  7,092
  8,012
  8,982
  10,000
  11,067
  12,181
  13,344
  14,555
  15,815
  17,127
  18,490
  19,907
  21,380
  22,912
  24,504
  26,161
  27,885
  29,680
EBITDA, $m
  1,012
  1,499
  2,077
  2,750
  3,521
  4,393
  5,365
  6,439
  7,612
  8,883
  10,250
  11,711
  13,263
  14,905
  16,634
  18,449
  20,350
  22,336
  24,407
  26,564
  28,809
  31,144
  33,571
  36,094
  38,716
  41,442
  44,275
  47,223
  50,290
  53,483
Interest expense (income), $m
  23
  27
  58
  95
  139
  190
  249
  314
  388
  469
  557
  653
  755
  865
  981
  1,105
  1,234
  1,370
  1,513
  1,661
  1,817
  1,978
  2,146
  2,321
  2,503
  2,691
  2,888
  3,091
  3,303
  3,524
  3,753
Earnings before tax, $m
  210
  448
  730
  1,060
  1,438
  1,865
  2,342
  2,869
  3,444
  4,067
  4,751
  5,467
  6,227
  7,031
  7,877
  8,766
  9,696
  10,668
  11,682
  12,738
  13,837
  14,980
  16,169
  17,404
  18,689
  20,024
  21,413
  22,857
  24,361
  25,927
Tax expense, $m
  57
  121
  197
  286
  388
  504
  632
  775
  930
  1,098
  1,283
  1,476
  1,681
  1,898
  2,127
  2,367
  2,618
  2,880
  3,154
  3,439
  3,736
  4,045
  4,366
  4,699
  5,046
  5,406
  5,781
  6,172
  6,577
  7,000
Net income, $m
  153
  327
  533
  774
  1,050
  1,362
  1,710
  2,094
  2,514
  2,969
  3,468
  3,991
  4,546
  5,132
  5,750
  6,399
  7,078
  7,788
  8,528
  9,299
  10,101
  10,936
  11,803
  12,705
  13,643
  14,618
  15,631
  16,686
  17,784
  18,927

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
  8,164
  10,504
  13,267
  16,474
  20,140
  24,275
  28,882
  33,959
  39,501
  45,501
  51,949
  58,834
  66,146
  73,875
  82,013
  90,555
  99,496
  108,835
  118,573
  128,714
  139,265
  150,236
  161,639
  173,489
  185,803
  198,601
  211,906
  225,742
  240,136
  255,118
Adjusted assets (=assets-cash), $m
  8,164
  10,504
  13,267
  16,474
  20,140
  24,275
  28,882
  33,959
  39,501
  45,501
  51,949
  58,834
  66,146
  73,875
  82,013
  90,555
  99,496
  108,835
  118,573
  128,714
  139,265
  150,236
  161,639
  173,489
  185,803
  198,601
  211,906
  225,742
  240,136
  255,118
Revenue / Adjusted assets
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
Average production assets, $m
  6,550
  8,428
  10,645
  13,219
  16,161
  19,478
  23,175
  27,249
  31,696
  36,510
  41,684
  47,208
  53,075
  59,277
  65,808
  72,661
  79,836
  87,329
  95,143
  103,280
  111,747
  120,550
  129,699
  139,207
  149,088
  159,357
  170,033
  181,135
  192,685
  204,706
Working capital, $m
  542
  697
  881
  1,094
  1,337
  1,612
  1,918
  2,255
  2,623
  3,021
  3,449
  3,907
  4,392
  4,905
  5,446
  6,013
  6,607
  7,227
  7,873
  8,547
  9,247
  9,976
  10,733
  11,520
  12,337
  13,187
  14,071
  14,989
  15,945
  16,940
Total debt, $m
  1,070
  1,761
  2,576
  3,522
  4,603
  5,823
  7,182
  8,680
  10,315
  12,085
  13,987
  16,018
  18,175
  20,455
  22,856
  25,376
  28,013
  30,768
  33,641
  36,632
  39,745
  42,982
  46,345
  49,841
  53,474
  57,249
  61,174
  65,256
  69,502
  73,922
Total liabilities, $m
  2,408
  3,099
  3,914
  4,860
  5,941
  7,161
  8,520
  10,018
  11,653
  13,423
  15,325
  17,356
  19,513
  21,793
  24,194
  26,714
  29,351
  32,106
  34,979
  37,971
  41,083
  44,320
  47,684
  51,179
  54,812
  58,587
  62,512
  66,594
  70,840
  75,260
Total equity, $m
  5,755
  7,405
  9,353
  11,614
  14,199
  17,114
  20,362
  23,941
  27,849
  32,078
  36,624
  41,478
  46,633
  52,082
  57,820
  63,841
  70,145
  76,729
  83,594
  90,743
  98,182
  105,917
  113,956
  122,310
  130,991
  140,014
  149,394
  159,148
  169,296
  179,858
Total liabilities and equity, $m
  8,163
  10,504
  13,267
  16,474
  20,140
  24,275
  28,882
  33,959
  39,502
  45,501
  51,949
  58,834
  66,146
  73,875
  82,014
  90,555
  99,496
  108,835
  118,573
  128,714
  139,265
  150,237
  161,640
  173,489
  185,803
  198,601
  211,906
  225,742
  240,136
  255,118
Debt-to-equity ratio
  0.190
  0.240
  0.280
  0.300
  0.320
  0.340
  0.350
  0.360
  0.370
  0.380
  0.380
  0.390
  0.390
  0.390
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
Adjusted equity ratio
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  153
  327
  533
  774
  1,050
  1,362
  1,710
  2,094
  2,514
  2,969
  3,468
  3,991
  4,546
  5,132
  5,750
  6,399
  7,078
  7,788
  8,528
  9,299
  10,101
  10,936
  11,803
  12,705
  13,643
  14,618
  15,631
  16,686
  17,784
  18,927
Depreciation, amort., depletion, $m
  775
  994
  1,252
  1,551
  1,893
  2,279
  2,709
  3,182
  3,699
  4,259
  4,847
  5,489
  6,172
  6,893
  7,652
  8,449
  9,283
  10,155
  11,063
  12,009
  12,994
  14,017
  15,081
  16,187
  17,336
  18,530
  19,771
  21,062
  22,405
  23,803
Funds from operations, $m
  929
  1,321
  1,785
  2,324
  2,943
  3,640
  4,418
  5,276
  6,214
  7,228
  8,315
  9,480
  10,717
  12,025
  13,402
  14,848
  16,362
  17,942
  19,591
  21,308
  23,095
  24,953
  26,885
  28,892
  30,979
  33,147
  35,403
  37,748
  40,189
  42,730
Change in working capital, $m
  129
  155
  183
  213
  243
  275
  306
  337
  368
  398
  428
  457
  486
  513
  540
  567
  594
  620
  647
  673
  701
  728
  757
  787
  818
  850
  883
  919
  956
  995
Cash from operations, $m
  800
  1,165
  1,601
  2,112
  2,699
  3,366
  4,113
  4,939
  5,846
  6,830
  7,887
  9,023
  10,232
  11,512
  12,862
  14,281
  15,768
  17,322
  18,945
  20,635
  22,394
  24,225
  26,127
  28,105
  30,161
  32,298
  34,519
  36,829
  39,233
  41,735
Maintenance CAPEX, $m
  -580
  -762
  -980
  -1,238
  -1,537
  -1,879
  -2,265
  -2,695
  -3,168
  -3,686
  -4,245
  -4,847
  -5,489
  -6,172
  -6,893
  -7,652
  -8,449
  -9,283
  -10,155
  -11,063
  -12,009
  -12,994
  -14,017
  -15,081
  -16,187
  -17,336
  -18,530
  -19,771
  -21,062
  -22,405
New CAPEX, $m
  -1,561
  -1,878
  -2,217
  -2,573
  -2,942
  -3,318
  -3,696
  -4,074
  -4,447
  -4,814
  -5,174
  -5,524
  -5,867
  -6,202
  -6,530
  -6,854
  -7,174
  -7,493
  -7,814
  -8,137
  -8,466
  -8,803
  -9,150
  -9,508
  -9,881
  -10,269
  -10,676
  -11,102
  -11,550
  -12,021
Cash from investing activities, $m
  -2,141
  -2,640
  -3,197
  -3,811
  -4,479
  -5,197
  -5,961
  -6,769
  -7,615
  -8,500
  -9,419
  -10,371
  -11,356
  -12,374
  -13,423
  -14,506
  -15,623
  -16,776
  -17,969
  -19,200
  -20,475
  -21,797
  -23,167
  -24,589
  -26,068
  -27,605
  -29,206
  -30,873
  -32,612
  -34,426
Free cash flow, $m
  -1,342
  -1,474
  -1,596
  -1,700
  -1,780
  -1,831
  -1,849
  -1,829
  -1,770
  -1,670
  -1,532
  -1,349
  -1,125
  -862
  -561
  -225
  145
  546
  976
  1,434
  1,919
  2,428
  2,960
  3,516
  4,093
  4,693
  5,313
  5,956
  6,621
  7,308
Issuance/(repayment) of debt, $m
  576
  690
  815
  946
  1,082
  1,220
  1,359
  1,498
  1,635
  1,770
  1,902
  2,031
  2,157
  2,280
  2,401
  2,520
  2,638
  2,755
  2,873
  2,992
  3,113
  3,236
  3,364
  3,496
  3,633
  3,775
  3,925
  4,082
  4,246
  4,420
Issuance/(repurchase) of shares, $m
  1,219
  1,323
  1,415
  1,487
  1,535
  1,553
  1,538
  1,485
  1,393
  1,261
  1,077
  863
  609
  317
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,795
  2,013
  2,230
  2,433
  2,617
  2,773
  2,897
  2,983
  3,028
  3,031
  2,979
  2,894
  2,766
  2,597
  2,401
  2,520
  2,638
  2,755
  2,873
  2,992
  3,113
  3,236
  3,364
  3,496
  3,633
  3,775
  3,925
  4,082
  4,246
  4,420
Total cash flow (excl. dividends), $m
  454
  539
  634
  734
  837
  942
  1,048
  1,154
  1,258
  1,361
  1,448
  1,546
  1,642
  1,735
  1,840
  2,295
  2,782
  3,301
  3,849
  4,426
  5,031
  5,664
  6,324
  7,011
  7,726
  8,468
  9,238
  10,038
  10,867
  11,728
Retained Cash Flow (-), $m
  -1,373
  -1,650
  -1,948
  -2,261
  -2,585
  -2,915
  -3,248
  -3,579
  -3,907
  -4,230
  -4,546
  -4,854
  -5,155
  -5,449
  -5,738
  -6,022
  -6,303
  -6,584
  -6,865
  -7,150
  -7,439
  -7,735
  -8,039
  -8,354
  -8,681
  -9,023
  -9,380
  -9,754
  -10,148
  -10,562
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
  -919
  -1,111
  -1,314
  -1,527
  -1,748
  -1,973
  -2,200
  -2,426
  -2,649
  -2,869
  -3,098
  -3,308
  -3,513
  -3,714
  -3,898
  -3,727
  -3,521
  -3,283
  -3,016
  -2,723
  -2,407
  -2,070
  -1,715
  -1,343
  -955
  -555
  -142
  283
  719
  1,166
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -881
  -1,017
  -1,143
  -1,257
  -1,355
  -1,432
  -1,486
  -1,516
  -1,522
  -1,504
  -1,471
  -1,412
  -1,336
  -1,247
  -1,144
  -947
  -766
  -605
  -464
  -346
  -249
  -172
  -112
  -68
  -37
  -16
  -3
  4
  8
  9
Current shareholders' claim on cash, %
  84.9
  74.0
  65.9
  59.8
  55.2
  51.5
  48.7
  46.6
  44.9
  43.6
  42.7
  42.1
  41.7
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5
  41.5

Helmerich & Payne, Inc. is engaged in contract drilling of oil and gas wells for others. The Company operates in the contract drilling industry. The Company's contract drilling business consists of three segments: U.S. Land, Offshore and International Land. The Company is also engaged in the ownership, development and operation of commercial real estate and the research and development of rotary steerable technology. Its real estate investments are located within Tulsa, Oklahoma, and include a shopping center containing approximately 441,000 leasable square feet, multi-tenant industrial warehouse properties containing approximately one million leasable square feet and approximately 210 acres of undeveloped real estate. The Company provides drilling rigs, equipment, personnel and camps on a contract basis. The Company's subsidiaries include Helmerich & Payne International Drilling Co. and Helmerich & Payne de Venezuela, C.A.

FINANCIAL RATIOS  of  Helmerich & Payne, Inc. (HP)

Valuation Ratios
P/E Ratio -53
Price to Sales 3.8
Price to Book 1.6
Price to Tangible Book
Price to Cash Flow 19
Price to Free Cash Flow -165.6
Growth Rates
Sales Growth Rate 11.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 54.9%
Cap. Spend. - 3 Yr. Gr. Rate -16%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 11.8%
Total Debt to Equity 11.8%
Interest Coverage -7
Management Effectiveness
Return On Assets -1.7%
Ret/ On Assets - 3 Yr. Avg. 1.3%
Return On Total Capital -2.6%
Ret/ On T. Cap. - 3 Yr. Avg. 1.5%
Return On Equity -2.9%
Return On Equity - 3 Yr. Avg. 1.5%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 30.7%
Gross Margin - 3 Yr. Avg. 40.5%
EBITDA Margin 23.5%
EBITDA Margin - 3 Yr. Avg. 32.7%
Operating Margin -9.5%
Oper. Margin - 3 Yr. Avg. 3.4%
Pre-Tax Margin -10.2%
Pre-Tax Margin - 3 Yr. Avg. 2.1%
Net Profit Margin -7.1%
Net Profit Margin - 3 Yr. Avg. 0.9%
Effective Tax Rate 30.8%
Eff/ Tax Rate - 3 Yr. Avg. 31.6%
Payout Ratio -239.1%

HP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HP stock intrinsic value calculation we used $2487 million for the last fiscal year's total revenue generated by Helmerich & Payne, Inc.. The default revenue input number comes from 0001 income statement of Helmerich & Payne, 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 HP stock valuation model: a) initial revenue growth rate of 31.3% 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 4.3%, whose default value for HP is calculated based on our internal credit rating of Helmerich & Payne, 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 Helmerich & Payne, 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 HP stock the variable cost ratio is equal to 70.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $728 million in the base year in the intrinsic value calculation for HP 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 Helmerich & Payne, Inc..

Corporate tax rate of 27% is the nominal tax rate for Helmerich & Payne, 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 HP 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 HP are equal to 200.6%.

Life of production assets of 8.6 years is the average useful life of capital assets used in Helmerich & Payne, 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 HP is equal to 16.6%. 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 - $4382.735 million for Helmerich & Payne, 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 109.441 million for Helmerich & Payne, 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 Helmerich & Payne, Inc. at the current share price and the inputted number of shares is $6.8 billion.

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