Intrinsic value of Key Energy Services - KEG

Previous Close

$8.18

  Intrinsic Value

$1.58

stock screener

  Rating & Target

str. sell

-81%

Previous close

$8.18

 
Intrinsic value

$1.58

 
Up/down potential

-81%

 
Rating

str. sell

We calculate the intrinsic value of KEG 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 0.2

 

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, %
  34.00
  31.10
  28.49
  26.14
  24.03
  22.12
  20.41
  18.87
  17.48
  16.24
  15.11
  14.10
  13.19
  12.37
  11.63
  10.97
  10.37
  9.84
  9.35
  8.92
  8.53
  8.17
  7.86
  7.57
  7.31
  7.08
  6.87
  6.69
  6.52
  6.37
Revenue, $m
  584
  766
  985
  1,242
  1,540
  1,881
  2,265
  2,692
  3,163
  3,677
  4,232
  4,829
  5,466
  6,142
  6,857
  7,609
  8,399
  9,225
  10,087
  10,987
  11,924
  12,898
  13,911
  14,965
  16,059
  17,196
  18,378
  19,607
  20,885
  22,215
Variable operating expenses, $m
  1,342
  1,759
  2,260
  2,851
  3,536
  4,319
  5,200
  6,182
  7,262
  8,441
  9,717
  11,087
  12,550
  14,102
  15,743
  17,470
  19,282
  21,179
  23,160
  25,225
  27,376
  29,613
  31,939
  34,357
  36,870
  39,481
  42,195
  45,016
  47,950
  51,002
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
  1,342
  1,759
  2,260
  2,851
  3,536
  4,319
  5,200
  6,182
  7,262
  8,441
  9,717
  11,087
  12,550
  14,102
  15,743
  17,470
  19,282
  21,179
  23,160
  25,225
  27,376
  29,613
  31,939
  34,357
  36,870
  39,481
  42,195
  45,016
  47,950
  51,002
Operating income, $m
  -757
  -993
  -1,276
  -1,609
  -1,996
  -2,438
  -2,935
  -3,489
  -4,099
  -4,765
  -5,485
  -6,258
  -7,083
  -7,960
  -8,886
  -9,861
  -10,884
  -11,954
  -13,072
  -14,238
  -15,452
  -16,715
  -18,028
  -19,393
  -20,811
  -22,285
  -23,816
  -25,409
  -27,065
  -28,788
EBITDA, $m
  -645
  -845
  -1,086
  -1,370
  -1,699
  -2,075
  -2,499
  -2,970
  -3,489
  -4,056
  -4,669
  -5,327
  -6,030
  -6,776
  -7,564
  -8,394
  -9,265
  -10,176
  -11,128
  -12,120
  -13,153
  -14,228
  -15,346
  -16,508
  -17,715
  -18,970
  -20,273
  -21,629
  -23,039
  -24,505
Interest expense (income), $m
  0
  13
  21
  30
  40
  53
  68
  85
  104
  125
  149
  174
  202
  231
  263
  296
  332
  369
  408
  449
  492
  537
  583
  632
  682
  734
  788
  845
  903
  964
  1,028
Earnings before tax, $m
  -771
  -1,014
  -1,306
  -1,650
  -2,049
  -2,506
  -3,020
  -3,593
  -4,224
  -4,913
  -5,659
  -6,460
  -7,315
  -8,223
  -9,182
  -10,193
  -11,253
  -12,362
  -13,522
  -14,730
  -15,989
  -17,298
  -18,659
  -20,074
  -21,545
  -23,073
  -24,661
  -26,312
  -28,029
  -29,816
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
  -771
  -1,014
  -1,306
  -1,650
  -2,049
  -2,506
  -3,020
  -3,593
  -4,224
  -4,913
  -5,659
  -6,460
  -7,315
  -8,223
  -9,182
  -10,193
  -11,253
  -12,362
  -13,522
  -14,730
  -15,989
  -17,298
  -18,659
  -20,074
  -21,545
  -23,073
  -24,661
  -26,312
  -28,029
  -29,816

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
  709
  930
  1,195
  1,507
  1,869
  2,283
  2,749
  3,268
  3,839
  4,462
  5,136
  5,861
  6,634
  7,454
  8,322
  9,234
  10,192
  11,195
  12,242
  13,334
  14,470
  15,653
  16,883
  18,161
  19,489
  20,869
  22,304
  23,795
  25,346
  26,960
Adjusted assets (=assets-cash), $m
  709
  930
  1,195
  1,507
  1,869
  2,283
  2,749
  3,268
  3,839
  4,462
  5,136
  5,861
  6,634
  7,454
  8,322
  9,234
  10,192
  11,195
  12,242
  13,334
  14,470
  15,653
  16,883
  18,161
  19,489
  20,869
  22,304
  23,795
  25,346
  26,960
Revenue / Adjusted assets
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
Average production assets, $m
  811
  1,064
  1,367
  1,724
  2,138
  2,611
  3,144
  3,737
  4,390
  5,103
  5,874
  6,703
  7,587
  8,526
  9,517
  10,562
  11,657
  12,804
  14,001
  15,250
  16,550
  17,903
  19,309
  20,771
  22,290
  23,868
  25,509
  27,215
  28,989
  30,834
Working capital, $m
  11
  15
  19
  24
  29
  36
  43
  51
  60
  70
  80
  92
  104
  117
  130
  145
  160
  175
  192
  209
  227
  245
  264
  284
  305
  327
  349
  373
  397
  422
Total debt, $m
  382
  549
  750
  986
  1,260
  1,573
  1,926
  2,319
  2,751
  3,223
  3,733
  4,282
  4,867
  5,488
  6,145
  6,836
  7,561
  8,320
  9,112
  9,939
  10,799
  11,695
  12,626
  13,593
  14,598
  15,643
  16,729
  17,858
  19,032
  20,254
Total liabilities, $m
  537
  704
  904
  1,141
  1,415
  1,728
  2,081
  2,474
  2,906
  3,378
  3,888
  4,436
  5,022
  5,643
  6,299
  6,990
  7,716
  8,475
  9,267
  10,094
  10,954
  11,849
  12,780
  13,748
  14,753
  15,798
  16,884
  18,013
  19,187
  20,408
Total equity, $m
  172
  226
  290
  366
  454
  555
  668
  794
  933
  1,084
  1,248
  1,424
  1,612
  1,811
  2,022
  2,244
  2,477
  2,720
  2,975
  3,240
  3,516
  3,804
  4,103
  4,413
  4,736
  5,071
  5,420
  5,782
  6,159
  6,551
Total liabilities and equity, $m
  709
  930
  1,194
  1,507
  1,869
  2,283
  2,749
  3,268
  3,839
  4,462
  5,136
  5,860
  6,634
  7,454
  8,321
  9,234
  10,193
  11,195
  12,242
  13,334
  14,470
  15,653
  16,883
  18,161
  19,489
  20,869
  22,304
  23,795
  25,346
  26,959
Debt-to-equity ratio
  2.220
  2.430
  2.580
  2.690
  2.770
  2.840
  2.880
  2.920
  2.950
  2.970
  2.990
  3.010
  3.020
  3.030
  3.040
  3.050
  3.050
  3.060
  3.060
  3.070
  3.070
  3.070
  3.080
  3.080
  3.080
  3.080
  3.090
  3.090
  3.090
  3.090
Adjusted equity ratio
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -771
  -1,014
  -1,306
  -1,650
  -2,049
  -2,506
  -3,020
  -3,593
  -4,224
  -4,913
  -5,659
  -6,460
  -7,315
  -8,223
  -9,182
  -10,193
  -11,253
  -12,362
  -13,522
  -14,730
  -15,989
  -17,298
  -18,659
  -20,074
  -21,545
  -23,073
  -24,661
  -26,312
  -28,029
  -29,816
Depreciation, amort., depletion, $m
  113
  148
  190
  239
  297
  363
  437
  519
  610
  709
  816
  931
  1,054
  1,184
  1,322
  1,467
  1,619
  1,778
  1,945
  2,118
  2,299
  2,486
  2,682
  2,885
  3,096
  3,315
  3,543
  3,780
  4,026
  4,282
Funds from operations, $m
  -658
  -866
  -1,116
  -1,410
  -1,752
  -2,143
  -2,584
  -3,074
  -3,615
  -4,204
  -4,843
  -5,529
  -6,261
  -7,038
  -7,860
  -8,726
  -9,634
  -10,584
  -11,577
  -12,612
  -13,690
  -14,811
  -15,978
  -17,190
  -18,449
  -19,758
  -21,118
  -22,532
  -24,003
  -25,533
Change in working capital, $m
  3
  3
  4
  5
  6
  6
  7
  8
  9
  10
  11
  11
  12
  13
  14
  14
  15
  16
  16
  17
  18
  19
  19
  20
  21
  22
  22
  23
  24
  25
Cash from operations, $m
  -661
  -869
  -1,120
  -1,415
  -1,758
  -2,150
  -2,591
  -3,082
  -3,623
  -4,214
  -4,853
  -5,540
  -6,273
  -7,051
  -7,874
  -8,740
  -9,649
  -10,600
  -11,593
  -12,629
  -13,708
  -14,830
  -15,997
  -17,210
  -18,470
  -19,779
  -21,141
  -22,556
  -24,027
  -25,558
Maintenance CAPEX, $m
  -84
  -113
  -148
  -190
  -239
  -297
  -363
  -437
  -519
  -610
  -709
  -816
  -931
  -1,054
  -1,184
  -1,322
  -1,467
  -1,619
  -1,778
  -1,945
  -2,118
  -2,299
  -2,486
  -2,682
  -2,885
  -3,096
  -3,315
  -3,543
  -3,780
  -4,026
New CAPEX, $m
  -206
  -252
  -303
  -357
  -414
  -473
  -533
  -593
  -653
  -713
  -771
  -828
  -884
  -939
  -992
  -1,044
  -1,096
  -1,147
  -1,198
  -1,249
  -1,300
  -1,353
  -1,406
  -1,462
  -1,519
  -1,579
  -1,641
  -1,706
  -1,774
  -1,845
Cash from investing activities, $m
  -290
  -365
  -451
  -547
  -653
  -770
  -896
  -1,030
  -1,172
  -1,323
  -1,480
  -1,644
  -1,815
  -1,993
  -2,176
  -2,366
  -2,563
  -2,766
  -2,976
  -3,194
  -3,418
  -3,652
  -3,892
  -4,144
  -4,404
  -4,675
  -4,956
  -5,249
  -5,554
  -5,871
Free cash flow, $m
  -951
  -1,234
  -1,571
  -1,962
  -2,412
  -2,919
  -3,486
  -4,112
  -4,796
  -5,537
  -6,333
  -7,184
  -8,088
  -9,044
  -10,050
  -11,106
  -12,211
  -13,366
  -14,569
  -15,822
  -17,126
  -18,481
  -19,890
  -21,353
  -22,874
  -24,454
  -26,096
  -27,804
  -29,581
  -31,430
Issuance/(repayment) of debt, $m
  137
  167
  201
  236
  274
  313
  353
  393
  432
  472
  510
  548
  585
  621
  657
  691
  725
  759
  793
  826
  861
  895
  931
  968
  1,005
  1,045
  1,086
  1,129
  1,174
  1,221
Issuance/(repurchase) of shares, $m
  814
  1,067
  1,370
  1,726
  2,137
  2,606
  3,133
  3,719
  4,363
  5,065
  5,823
  6,636
  7,503
  8,422
  9,393
  10,414
  11,486
  12,606
  13,776
  14,995
  16,265
  17,585
  18,958
  20,385
  21,868
  23,408
  25,010
  26,675
  28,406
  30,208
Cash from financing (excl. dividends), $m  
  951
  1,234
  1,571
  1,962
  2,411
  2,919
  3,486
  4,112
  4,795
  5,537
  6,333
  7,184
  8,088
  9,043
  10,050
  11,105
  12,211
  13,365
  14,569
  15,821
  17,126
  18,480
  19,889
  21,353
  22,873
  24,453
  26,096
  27,804
  29,580
  31,429
Total cash flow (excl. dividends), $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
Retained Cash Flow (-), $m
  -814
  -1,067
  -1,370
  -1,726
  -2,137
  -2,606
  -3,133
  -3,719
  -4,363
  -5,065
  -5,823
  -6,636
  -7,503
  -8,422
  -9,393
  -10,414
  -11,486
  -12,606
  -13,776
  -14,995
  -16,265
  -17,585
  -18,958
  -20,385
  -21,868
  -23,408
  -25,010
  -26,675
  -28,406
  -30,208
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
  -814
  -1,067
  -1,370
  -1,726
  -2,137
  -2,606
  -3,133
  -3,719
  -4,363
  -5,065
  -5,823
  -6,636
  -7,503
  -8,422
  -9,393
  -10,414
  -11,486
  -12,606
  -13,776
  -14,995
  -16,265
  -17,585
  -18,958
  -20,385
  -21,868
  -23,408
  -25,010
  -26,675
  -28,406
  -30,208
Discount rate, %
  9.00
  9.45
  9.92
  10.42
  10.94
  11.49
  12.06
  12.66
  13.30
  13.96
  14.66
  15.39
  16.16
  16.97
  17.82
  18.71
  19.65
  20.63
  21.66
  22.74
  23.88
  25.07
  26.33
  27.64
  29.03
  30.48
  32.00
  33.60
  35.28
  37.05
PV of cash for distribution, $m
  -747
  -891
  -1,031
  -1,161
  -1,272
  -1,357
  -1,412
  -1,433
  -1,419
  -1,371
  -1,293
  -1,190
  -1,070
  -938
  -803
  -670
  -544
  -431
  -332
  -249
  -181
  -128
  -88
  -58
  -37
  -23
  -14
  -8
  -4
  -2
Current shareholders' claim on cash, %
  16.9
  2.9
  0.5
  0.1
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Key Energy Services, Inc. operates as an onshore rig-based well servicing contractor. The company operates through U.S. Rig Services, Fluid Management Services, Coiled Tubing Services, Fishing and Rental Services, and International segments. It engages in the completion of newly drilled wells; workover and recompletion of existing oil and natural gas wells; well maintenance; and the plugging and abandonment of wells at the end of their lives, as well as specialty drilling services to oil and natural gas producers. The company also offers transportation and well-site storage services for various fluids utilized in drilling, completions, workover, and maintenance activities; and disposal services for fluids produced subsequent to well completion. In addition, it operates a fleet of hot oilers used to clear soluble restrictions in a wellbore; offers coiled tubing services for wellbore clean-outs, nitrogen jet lifts, through-tubing fishing, and formation stimulations; and mills temporary isolation plugs that separate frac zones. Further, the company provides fishing services, such as recovering lost or stuck equipment in the wellbore utilizing fishing tools, as well as well testing services; and rents drill pipe, tubulars, handling tools, pressure-control equipment, pumps, power swivels, reversing units, foam air units, and frac stack equipment used to support hydraulic fracturing operations and the associated flowback of frac fluids, proppants, oil, and natural gas. Additionally, it offers drilling, wireline and project management, consulting, and reservoir engineering services; and develops hardware and software related to oilfield service equipment controls, data acquisition, and digital information flow. The company was formerly known as Key Energy Group, Inc. and changed its name to Key Energy Services, Inc. in December 1998. Key Energy Services, Inc. was founded in 1977 and is headquartered in Houston, Texas.

FINANCIAL RATIOS  of  Key Energy Services (KEG)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

KEG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the KEG stock intrinsic value calculation we used $436.165 million for the last fiscal year's total revenue generated by Key Energy Services. The default revenue input number comes from 0001 income statement of Key Energy Services. 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 KEG stock valuation model: a) initial revenue growth rate of 34% 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 9%, whose default value for KEG is calculated based on our internal credit rating of Key Energy Services, 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 Key Energy Services.
    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 KEG stock the variable cost ratio is equal to 229.6%.

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 KEG 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 Key Energy Services.

Corporate tax rate of 27% is the nominal tax rate for Key Energy Services. 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 KEG 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 KEG are equal to 138.8%.

Life of production assets of 7.2 years is the average useful life of capital assets used in Key Energy Services 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 KEG is equal to 1.9%. 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 - $128.683 million for Key Energy Services - 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 20.245 million for Key Energy Services 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 Key Energy Services at the current share price and the inputted number of shares is $0.2 billion.

COMPANY NEWS

▶ Key Energy Services Reports Third Quarter 2018 Earnings   [Nov-06-18 04:15PM  GlobeNewswire]
▶ Stocks to Play in a Stringent Iran Sanctions Scenario   [Sep-26-18 05:17PM  TheStreet.com]
▶ Houston energy co.'s unsolicited acquisition offer rejected   [Sep-25-18 08:25AM  American City Business Journals]
▶ COO departs Houston oil field service company   [Sep-17-18 03:48PM  American City Business Journals]
▶ Houston energy co. hires former Atwood Oceanics CEO as new chief executive   [Aug-20-18 08:57AM  American City Business Journals]
▶ Update: CEO of Houston-based well-servicing contractor leaves for fracking co.   [May-14-18 09:31AM  American City Business Journals]
▶ Key Energy Services Reports First Quarter 2018 Earnings   [May-09-18 06:20PM  GlobeNewswire]
▶ Transocean (RIG) Catches Eye: Stock Jumps 6.4%   [Apr-12-18 08:41AM  Zacks]
▶ Key Energy Services, Inc. to Host Earnings Call   [Feb-27-18 09:15AM  ACCESSWIRE]
▶ NYSE Stocks Insiders Are Buying   [Feb-07-18 08:02AM  Simply Wall St.]
▶ Gauging Short Interest in National Oilwell Varco   [Jan-25-18 09:01AM  Market Realist]
▶ Short Interest in Halliburton on January 4   [Jan-11-18 09:02AM  Market Realist]
▶ Analysts Are Optimistic about Halliburtons 4Q17 Earnings   [Jan-10-18 12:29PM  Market Realist]
▶ Short Interest in Schlumberger on January 2   [Jan-09-18 09:03AM  Market Realist]
▶ Wall Street Targets for the Worst-Performing Oilfield Stocks   [Nov-27-17 10:32AM  Market Realist]
▶ The Worst-Performing Oilfield Stock Year-to-Date   [Nov-24-17 05:50PM  Market Realist]
▶ Key Energy Services, Inc. to Host Earnings Call   [Nov-09-17 09:00AM  ACCESSWIRE]
▶ Key Energy Services Reports Third Quarter 2017 Earnings   [Nov-08-17 06:21PM  GlobeNewswire]
▶ Wall Streets Forecasts for Halliburton after 3Q17 Earnings   [Oct-24-17 02:23PM  Market Realist]
▶ Short Interest in Halliburton on October 5   [Oct-10-17 10:39AM  Market Realist]
▶ Short Interest in Schlumberger on October 2   [07:38AM  Market Realist]
▶ Oilfield Services Gainers: FTK, KEG, BAS, DWSN, and AROC   [Oct-04-17 01:36PM  Market Realist]
▶ Rising Oilfield Service Stocks: BAS, EXH, TESO, WFT, and KEG   [Sep-28-17 05:41PM  Market Realist]
▶ Whats Short Interest in Halliburton on September 15?   [Sep-19-17 09:10AM  Market Realist]
▶ Key Energy Services Reports Second Quarter 2017 Earnings   [Aug-08-17 05:57PM  PR Newswire]
▶ Short Interest in Schlumberger on July 14, 2017   [Jul-17-17 02:35PM  Market Realist]
▶ Energy co. sells business unit to another Houston co. after recent bankruptcies   [Jul-06-17 10:29AM  American City Business Journals]
▶ AFGlobal Acquires Advanced Measurement Inc.   [09:00AM  GlobeNewswire]
▶ These 5 Oil Services Stocks Suffered a Brutal May   [Jun-07-17 01:52PM  Motley Fool]
▶ George Soros' Worst Performing Stocks of 2017 So Far   [May-23-17 04:03PM  Motley Fool]
▶ Are Analysts Changing Their Recommendations for BAS?   [May-12-17 07:36AM  Market Realist]

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