Intrinsic value of Helmerich&Payne - HP

Previous Close

$60.74

  Intrinsic Value

$9.32

stock screener

  Rating & Target

str. sell

-85%

Previous close

$60.74

 
Intrinsic value

$9.32

 
Up/down potential

-85%

 
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 6.6

 

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, %
  30.10
  27.59
  25.33
  23.30
  21.47
  19.82
  18.34
  17.01
  15.80
  14.72
  13.75
  12.88
  12.09
  11.38
  10.74
  10.17
  9.65
  9.19
  8.77
  8.39
  8.05
  7.75
  7.47
  7.22
  7.00
  6.80
  6.62
  6.46
  6.31
  6.18
Revenue, $m
  2,348
  2,996
  3,755
  4,629
  5,623
  6,738
  7,973
  9,329
  10,804
  12,395
  14,099
  15,915
  17,839
  19,869
  22,003
  24,240
  26,580
  29,021
  31,566
  34,214
  36,969
  39,833
  42,809
  45,902
  49,116
  52,457
  55,930
  59,543
  63,302
  67,216
Variable operating expenses, $m
  2,382
  3,037
  3,804
  4,687
  5,692
  6,818
  8,066
  9,436
  10,926
  12,533
  14,245
  16,079
  18,023
  20,074
  22,230
  24,490
  26,854
  29,321
  31,891
  34,567
  37,350
  40,244
  43,251
  46,375
  49,623
  52,998
  56,507
  60,157
  63,956
  67,909
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
  2,382
  3,037
  3,804
  4,687
  5,692
  6,818
  8,066
  9,436
  10,926
  12,533
  14,245
  16,079
  18,023
  20,074
  22,230
  24,490
  26,854
  29,321
  31,891
  34,567
  37,350
  40,244
  43,251
  46,375
  49,623
  52,998
  56,507
  60,157
  63,956
  67,909
Operating income, $m
  -34
  -41
  -49
  -58
  -68
  -80
  -93
  -107
  -122
  -138
  -146
  -164
  -184
  -205
  -227
  -250
  -274
  -300
  -326
  -353
  -382
  -411
  -442
  -474
  -507
  -541
  -577
  -615
  -653
  -694
EBITDA, $m
  730
  931
  1,167
  1,438
  1,747
  2,093
  2,477
  2,899
  3,357
  3,851
  4,381
  4,945
  5,542
  6,173
  6,836
  7,531
  8,258
  9,017
  9,807
  10,630
  11,486
  12,376
  13,301
  14,262
  15,260
  16,298
  17,378
  18,500
  19,668
  20,884
Interest expense (income), $m
  23
  27
  64
  108
  160
  219
  287
  363
  447
  540
  640
  748
  865
  988
  1,119
  1,258
  1,403
  1,556
  1,715
  1,882
  2,055
  2,235
  2,423
  2,618
  2,821
  3,032
  3,251
  3,479
  3,715
  3,962
  4,218
Earnings before tax, $m
  -61
  -105
  -157
  -218
  -288
  -367
  -455
  -554
  -661
  -778
  -894
  -1,029
  -1,172
  -1,325
  -1,485
  -1,653
  -1,830
  -2,015
  -2,207
  -2,408
  -2,617
  -2,834
  -3,060
  -3,295
  -3,539
  -3,792
  -4,056
  -4,330
  -4,615
  -4,912
Tax expense, $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
Net income, $m
  -61
  -105
  -157
  -218
  -288
  -367
  -455
  -554
  -661
  -778
  -894
  -1,029
  -1,172
  -1,325
  -1,485
  -1,653
  -1,830
  -2,015
  -2,207
  -2,408
  -2,617
  -2,834
  -3,060
  -3,295
  -3,539
  -3,792
  -4,056
  -4,330
  -4,615
  -4,912

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
  8,096
  10,330
  12,947
  15,963
  19,390
  23,234
  27,495
  32,170
  37,255
  42,740
  48,618
  54,878
  61,512
  68,512
  75,872
  83,587
  91,654
  100,073
  108,847
  117,980
  127,479
  137,354
  147,617
  158,282
  169,365
  180,885
  192,862
  205,320
  218,284
  231,778
Adjusted assets (=assets-cash), $m
  8,096
  10,330
  12,947
  15,963
  19,390
  23,234
  27,495
  32,170
  37,255
  42,740
  48,618
  54,878
  61,512
  68,512
  75,872
  83,587
  91,654
  100,073
  108,847
  117,980
  127,479
  137,354
  147,617
  158,282
  169,365
  180,885
  192,862
  205,320
  218,284
  231,778
Revenue / Adjusted assets
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
Average production assets, $m
  6,633
  8,463
  10,607
  13,078
  15,886
  19,034
  22,525
  26,356
  30,521
  35,015
  39,830
  44,959
  50,394
  56,129
  62,158
  68,478
  75,087
  81,985
  89,173
  96,655
  104,437
  112,527
  120,935
  129,672
  138,752
  148,190
  158,002
  168,209
  178,829
  189,884
Working capital, $m
  423
  539
  676
  833
  1,012
  1,213
  1,435
  1,679
  1,945
  2,231
  2,538
  2,865
  3,211
  3,576
  3,961
  4,363
  4,784
  5,224
  5,682
  6,159
  6,654
  7,170
  7,706
  8,262
  8,841
  9,442
  10,067
  10,718
  11,394
  12,099
Total debt, $m
  1,181
  1,998
  2,956
  4,060
  5,314
  6,721
  8,281
  9,992
  11,853
  13,860
  16,012
  18,303
  20,731
  23,293
  25,987
  28,810
  31,763
  34,844
  38,055
  41,398
  44,875
  48,489
  52,245
  56,149
  60,205
  64,421
  68,805
  73,365
  78,109
  83,048
Total liabilities, $m
  2,963
  3,781
  4,739
  5,843
  7,097
  8,504
  10,063
  11,774
  13,635
  15,643
  17,794
  20,085
  22,514
  25,076
  27,769
  30,593
  33,545
  36,627
  39,838
  43,181
  46,657
  50,272
  54,028
  57,931
  61,987
  66,204
  70,588
  75,147
  79,892
  84,831
Total equity, $m
  5,133
  6,549
  8,208
  10,121
  12,294
  14,730
  17,432
  20,396
  23,620
  27,097
  30,824
  34,793
  38,999
  43,437
  48,103
  52,994
  58,108
  63,446
  69,009
  74,799
  80,822
  87,082
  93,589
  100,350
  107,377
  114,681
  122,275
  130,173
  138,392
  146,947
Total liabilities and equity, $m
  8,096
  10,330
  12,947
  15,964
  19,391
  23,234
  27,495
  32,170
  37,255
  42,740
  48,618
  54,878
  61,513
  68,513
  75,872
  83,587
  91,653
  100,073
  108,847
  117,980
  127,479
  137,354
  147,617
  158,281
  169,364
  180,885
  192,863
  205,320
  218,284
  231,778
Debt-to-equity ratio
  0.230
  0.310
  0.360
  0.400
  0.430
  0.460
  0.480
  0.490
  0.500
  0.510
  0.520
  0.530
  0.530
  0.540
  0.540
  0.540
  0.550
  0.550
  0.550
  0.550
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.570
Adjusted equity ratio
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -61
  -105
  -157
  -218
  -288
  -367
  -455
  -554
  -661
  -778
  -894
  -1,029
  -1,172
  -1,325
  -1,485
  -1,653
  -1,830
  -2,015
  -2,207
  -2,408
  -2,617
  -2,834
  -3,060
  -3,295
  -3,539
  -3,792
  -4,056
  -4,330
  -4,615
  -4,912
Depreciation, amort., depletion, $m
  764
  972
  1,216
  1,496
  1,815
  2,173
  2,570
  3,005
  3,479
  3,989
  4,526
  5,109
  5,727
  6,378
  7,063
  7,782
  8,533
  9,316
  10,133
  10,984
  11,868
  12,787
  13,743
  14,735
  15,767
  16,840
  17,955
  19,115
  20,321
  21,578
Funds from operations, $m
  703
  867
  1,059
  1,279
  1,528
  1,806
  2,114
  2,452
  2,817
  3,211
  3,632
  4,080
  4,554
  5,054
  5,579
  6,128
  6,703
  7,302
  7,926
  8,575
  9,251
  9,953
  10,682
  11,440
  12,228
  13,047
  13,899
  14,785
  15,706
  16,666
Change in working capital, $m
  98
  117
  137
  157
  179
  201
  222
  244
  265
  286
  307
  327
  346
  365
  384
  403
  421
  439
  458
  477
  496
  515
  536
  557
  579
  601
  625
  650
  677
  704
Cash from operations, $m
  605
  750
  922
  1,121
  1,349
  1,606
  1,892
  2,207
  2,552
  2,925
  3,325
  3,753
  4,208
  4,688
  5,194
  5,725
  6,281
  6,862
  7,468
  8,099
  8,755
  9,437
  10,147
  10,884
  11,650
  12,446
  13,274
  14,134
  15,030
  15,962
Maintenance CAPEX, $m
  -580
  -754
  -962
  -1,205
  -1,486
  -1,805
  -2,163
  -2,560
  -2,995
  -3,468
  -3,979
  -4,526
  -5,109
  -5,727
  -6,378
  -7,063
  -7,782
  -8,533
  -9,316
  -10,133
  -10,984
  -11,868
  -12,787
  -13,743
  -14,735
  -15,767
  -16,840
  -17,955
  -19,115
  -20,321
New CAPEX, $m
  -1,533
  -1,830
  -2,144
  -2,471
  -2,808
  -3,149
  -3,491
  -3,830
  -4,165
  -4,494
  -4,815
  -5,129
  -5,435
  -5,735
  -6,029
  -6,320
  -6,609
  -6,898
  -7,188
  -7,482
  -7,782
  -8,090
  -8,408
  -8,737
  -9,080
  -9,438
  -9,813
  -10,206
  -10,620
  -11,056
Cash from investing activities, $m
  -2,113
  -2,584
  -3,106
  -3,676
  -4,294
  -4,954
  -5,654
  -6,390
  -7,160
  -7,962
  -8,794
  -9,655
  -10,544
  -11,462
  -12,407
  -13,383
  -14,391
  -15,431
  -16,504
  -17,615
  -18,766
  -19,958
  -21,195
  -22,480
  -23,815
  -25,205
  -26,653
  -28,161
  -29,735
  -31,377
Free cash flow, $m
  -1,508
  -1,833
  -2,183
  -2,555
  -2,945
  -3,348
  -3,762
  -4,183
  -4,609
  -5,038
  -5,469
  -5,902
  -6,336
  -6,773
  -7,213
  -7,658
  -8,109
  -8,568
  -9,036
  -9,517
  -10,011
  -10,521
  -11,048
  -11,596
  -12,166
  -12,759
  -13,379
  -14,027
  -14,705
  -15,415
Issuance/(repayment) of debt, $m
  688
  818
  958
  1,104
  1,254
  1,407
  1,559
  1,711
  1,861
  2,008
  2,151
  2,291
  2,428
  2,562
  2,694
  2,824
  2,953
  3,081
  3,211
  3,343
  3,477
  3,614
  3,756
  3,903
  4,056
  4,216
  4,384
  4,560
  4,745
  4,939
Issuance/(repurchase) of shares, $m
  1,251
  1,521
  1,816
  2,130
  2,460
  2,804
  3,157
  3,518
  3,885
  4,256
  4,620
  4,998
  5,379
  5,763
  6,151
  6,545
  6,945
  7,353
  7,770
  8,198
  8,640
  9,095
  9,567
  10,056
  10,566
  11,096
  11,650
  12,228
  12,834
  13,467
Cash from financing (excl. dividends), $m  
  1,939
  2,339
  2,774
  3,234
  3,714
  4,211
  4,716
  5,229
  5,746
  6,264
  6,771
  7,289
  7,807
  8,325
  8,845
  9,369
  9,898
  10,434
  10,981
  11,541
  12,117
  12,709
  13,323
  13,959
  14,622
  15,312
  16,034
  16,788
  17,579
  18,406
Total cash flow (excl. dividends), $m
  432
  505
  590
  679
  770
  862
  955
  1,047
  1,137
  1,226
  1,303
  1,388
  1,470
  1,552
  1,631
  1,710
  1,788
  1,866
  1,945
  2,024
  2,105
  2,189
  2,275
  2,364
  2,457
  2,553
  2,655
  2,761
  2,873
  2,991
Retained Cash Flow (-), $m
  -1,251
  -1,521
  -1,816
  -2,130
  -2,460
  -2,804
  -3,157
  -3,518
  -3,885
  -4,256
  -4,620
  -4,998
  -5,379
  -5,763
  -6,151
  -6,545
  -6,945
  -7,353
  -7,770
  -8,198
  -8,640
  -9,095
  -9,567
  -10,056
  -10,566
  -11,096
  -11,650
  -12,228
  -12,834
  -13,467
Prev. year cash balance distribution, $m
  221
  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
  -598
  -1,016
  -1,226
  -1,451
  -1,690
  -1,941
  -2,202
  -2,471
  -2,748
  -3,030
  -3,318
  -3,610
  -3,908
  -4,211
  -4,520
  -4,835
  -5,157
  -5,486
  -5,825
  -6,174
  -6,534
  -6,906
  -7,292
  -7,693
  -8,109
  -8,543
  -8,995
  -9,467
  -9,960
  -10,476
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
  -573
  -930
  -1,067
  -1,195
  -1,310
  -1,409
  -1,488
  -1,545
  -1,578
  -1,588
  -1,575
  -1,541
  -1,486
  -1,414
  -1,327
  -1,229
  -1,122
  -1,010
  -897
  -785
  -676
  -573
  -478
  -392
  -315
  -249
  -193
  -146
  -109
  -79
Current shareholders' claim on cash, %
  83.4
  70.3
  59.8
  51.4
  44.6
  39.0
  34.4
  30.5
  27.2
  24.5
  22.1
  20.0
  18.3
  16.7
  15.3
  14.1
  13.1
  12.1
  11.2
  10.4
  9.7
  9.1
  8.5
  8.0
  7.5
  7.0
  6.6
  6.2
  5.8
  5.5

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 (HP)

Valuation Ratios
P/E Ratio -51.5
Price to Sales 3.7
Price to Book 1.6
Price to Tangible Book
Price to Cash Flow 18.5
Price to Free Cash Flow -160.9
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 $1804.741 million for the last fiscal year's total revenue generated by Helmerich&Payne. The default revenue input number comes from 0001 income statement of Helmerich&Payne. 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 30.1% 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 4.3%, whose default value for HP is calculated based on our internal credit rating of Helmerich&Payne, 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.
    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 101.6%.

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 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.

Corporate tax rate of 27% is the nominal tax rate for Helmerich&Payne. 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 282.5%.

Life of production assets of 8.8 years is the average useful life of capital assets used in Helmerich&Payne 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 18%. 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 - $4164.591 million for Helmerich&Payne - 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 108.944 million for Helmerich&Payne 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 at the current share price and the inputted number of shares is $6.6 billion.

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COMPANY NEWS

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▶ Helmerich & Payne: Fiscal 2Q Earnings Snapshot   [06:25AM  Associated Press]
▶ Helmerich & Payne Earnings Preview   [Apr-25-18 03:49PM  Benzinga]
▶ Is Helmerich & Payne Inc. (HP) a Buy?   [Apr-19-18 06:34AM  Motley Fool]
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