Intrinsic value of Centrus Energy - LEU

Previous Close

$2.36

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$2.36

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of LEU 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 0.0

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  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
Revenue, $m
  223
  228
  234
  240
  248
  256
  264
  274
  284
  295
  306
  319
  332
  346
  361
  377
  394
  411
  430
  450
  471
  493
  516
  540
  566
  593
  622
  652
  683
  716
Variable operating expenses, $m
  266
  272
  279
  287
  295
  305
  315
  326
  337
  350
  355
  370
  385
  401
  419
  437
  456
  477
  499
  521
  546
  571
  598
  626
  656
  688
  721
  755
  792
  830
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
  266
  272
  279
  287
  295
  305
  315
  326
  337
  350
  355
  370
  385
  401
  419
  437
  456
  477
  499
  521
  546
  571
  598
  626
  656
  688
  721
  755
  792
  830
Operating income, $m
  -44
  -45
  -45
  -47
  -48
  -49
  -50
  -52
  -53
  -55
  -49
  -51
  -53
  -55
  -57
  -60
  -63
  -65
  -68
  -72
  -75
  -78
  -82
  -86
  -90
  -94
  -99
  -104
  -109
  -114
EBITDA, $m
  -29
  -30
  -30
  -31
  -32
  -33
  -34
  -36
  -37
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -61
  -64
  -67
  -70
  -74
  -77
  -81
  -85
  -89
  -93
Interest expense (income), $m
  0
  9
  -6
  -5
  -5
  -4
  -3
  -1
  0
  1
  3
  5
  6
  8
  10
  12
  15
  17
  19
  22
  25
  28
  31
  34
  38
  42
  45
  49
  54
  58
  63
Earnings before tax, $m
  -52
  -38
  -40
  -42
  -44
  -46
  -49
  -52
  -55
  -58
  -53
  -57
  -61
  -65
  -70
  -75
  -80
  -85
  -91
  -97
  -103
  -109
  -116
  -124
  -132
  -140
  -148
  -157
  -167
  -177
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
  -52
  -38
  -40
  -42
  -44
  -46
  -49
  -52
  -55
  -58
  -53
  -57
  -61
  -65
  -70
  -75
  -80
  -85
  -91
  -97
  -103
  -109
  -116
  -124
  -132
  -140
  -148
  -157
  -167
  -177

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
  690
  706
  724
  744
  767
  791
  818
  847
  879
  913
  949
  987
  1,028
  1,072
  1,118
  1,167
  1,219
  1,274
  1,332
  1,393
  1,457
  1,526
  1,597
  1,673
  1,753
  1,836
  1,925
  2,018
  2,115
  2,218
Adjusted assets (=assets-cash), $m
  690
  706
  724
  744
  767
  791
  818
  847
  879
  913
  949
  987
  1,028
  1,072
  1,118
  1,167
  1,219
  1,274
  1,332
  1,393
  1,457
  1,526
  1,597
  1,673
  1,753
  1,836
  1,925
  2,018
  2,115
  2,218
Revenue / Adjusted assets
  0.323
  0.323
  0.323
  0.323
  0.323
  0.324
  0.323
  0.323
  0.323
  0.323
  0.322
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
Average production assets, $m
  51
  52
  53
  55
  56
  58
  60
  62
  64
  67
  70
  72
  75
  79
  82
  86
  89
  93
  98
  102
  107
  112
  117
  123
  128
  135
  141
  148
  155
  163
Working capital, $m
  -46
  -47
  -49
  -50
  -52
  -53
  -55
  -57
  -59
  -61
  -64
  -66
  -69
  -72
  -75
  -78
  -82
  -86
  -89
  -94
  -98
  -102
  -107
  -112
  -118
  -123
  -129
  -136
  -142
  -149
Total debt, $m
  -116
  -102
  -85
  -67
  -47
  -24
  0
  26
  54
  85
  117
  152
  189
  228
  270
  314
  360
  410
  462
  517
  575
  636
  701
  769
  841
  916
  995
  1,079
  1,167
  1,259
Total liabilities, $m
  621
  635
  651
  670
  690
  712
  736
  763
  791
  821
  854
  888
  925
  965
  1,006
  1,050
  1,097
  1,146
  1,199
  1,254
  1,312
  1,373
  1,438
  1,506
  1,577
  1,653
  1,732
  1,816
  1,904
  1,996
Total equity, $m
  69
  71
  72
  74
  77
  79
  82
  85
  88
  91
  95
  99
  103
  107
  112
  117
  122
  127
  133
  139
  146
  153
  160
  167
  175
  184
  192
  202
  212
  222
Total liabilities and equity, $m
  690
  706
  723
  744
  767
  791
  818
  848
  879
  912
  949
  987
  1,028
  1,072
  1,118
  1,167
  1,219
  1,273
  1,332
  1,393
  1,458
  1,526
  1,598
  1,673
  1,752
  1,837
  1,924
  2,018
  2,116
  2,218
Debt-to-equity ratio
  -1.680
  -1.440
  -1.180
  -0.900
  -0.610
  -0.310
  0.000
  0.310
  0.620
  0.930
  1.230
  1.540
  1.840
  2.130
  2.410
  2.690
  2.960
  3.220
  3.470
  3.710
  3.950
  4.170
  4.390
  4.600
  4.800
  4.990
  5.170
  5.350
  5.520
  5.680
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -52
  -38
  -40
  -42
  -44
  -46
  -49
  -52
  -55
  -58
  -53
  -57
  -61
  -65
  -70
  -75
  -80
  -85
  -91
  -97
  -103
  -109
  -116
  -124
  -132
  -140
  -148
  -157
  -167
  -177
Depreciation, amort., depletion, $m
  15
  15
  15
  15
  15
  16
  16
  16
  17
  17
  9
  9
  10
  10
  11
  11
  11
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
  21
Funds from operations, $m
  -37
  -23
  -25
  -27
  -29
  -31
  -33
  -36
  -38
  -41
  -44
  -48
  -51
  -55
  -59
  -64
  -68
  -73
  -78
  -83
  -89
  -95
  -101
  -108
  -115
  -123
  -130
  -138
  -147
  -156
Change in working capital, $m
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
Cash from operations, $m
  -37
  -22
  -24
  -25
  -27
  -29
  -31
  -34
  -36
  -39
  -42
  -45
  -49
  -52
  -56
  -60
  -65
  -69
  -74
  -79
  -85
  -91
  -97
  -103
  -110
  -117
  -124
  -132
  -141
  -149
Maintenance CAPEX, $m
  -6
  -6
  -7
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
New CAPEX, $m
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -8
Cash from investing activities, $m
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -10
  -12
  -12
  -12
  -13
  -13
  -15
  -15
  -15
  -16
  -17
  -18
  -19
  -19
  -21
  -22
  -22
  -23
  -25
  -26
  -28
Free cash flow, $m
  -44
  -30
  -32
  -34
  -36
  -38
  -41
  -43
  -46
  -50
  -53
  -57
  -61
  -65
  -70
  -74
  -79
  -85
  -90
  -96
  -103
  -109
  -116
  -124
  -131
  -140
  -148
  -157
  -167
  -177
Issuance/(repayment) of debt, $m
  -273
  14
  16
  18
  20
  22
  24
  26
  28
  30
  32
  35
  37
  39
  42
  44
  47
  49
  52
  55
  58
  61
  65
  68
  72
  75
  79
  84
  88
  92
Issuance/(repurchase) of shares, $m
  340
  40
  42
  44
  46
  49
  52
  55
  58
  61
  57
  61
  65
  70
  74
  79
  85
  90
  96
  103
  109
  116
  124
  131
  140
  148
  157
  167
  177
  187
Cash from financing (excl. dividends), $m  
  67
  54
  58
  62
  66
  71
  76
  81
  86
  91
  89
  96
  102
  109
  116
  123
  132
  139
  148
  158
  167
  177
  189
  199
  212
  223
  236
  251
  265
  279
Total cash flow (excl. dividends), $m
  23
  24
  26
  29
  31
  33
  35
  38
  40
  42
  36
  39
  41
  44
  46
  49
  52
  55
  58
  61
  65
  68
  72
  76
  80
  84
  89
  93
  98
  103
Retained Cash Flow (-), $m
  -340
  -40
  -42
  -44
  -46
  -49
  -52
  -55
  -58
  -61
  -57
  -61
  -65
  -70
  -74
  -79
  -85
  -90
  -96
  -103
  -109
  -116
  -124
  -131
  -140
  -148
  -157
  -167
  -177
  -187
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
  -318
  -16
  -15
  -15
  -15
  -16
  -16
  -17
  -18
  -19
  -21
  -22
  -24
  -26
  -28
  -30
  -33
  -35
  -38
  -41
  -45
  -48
  -52
  -56
  -60
  -64
  -69
  -74
  -79
  -84
Discount rate, %
  4.80
  5.04
  5.29
  5.56
  5.83
  6.13
  6.43
  6.75
  7.09
  7.45
  7.82
  8.21
  8.62
  9.05
  9.50
  9.98
  10.48
  11.00
  11.55
  12.13
  12.74
  13.37
  14.04
  14.74
  15.48
  16.25
  17.07
  17.92
  18.82
  19.76
PV of cash for distribution, $m
  -303
  -14
  -13
  -12
  -12
  -11
  -11
  -10
  -10
  -9
  -9
  -9
  -8
  -8
  -7
  -7
  -6
  -5
  -5
  -4
  -4
  -3
  -3
  -2
  -2
  -1
  -1
  -1
  -1
  0
Current shareholders' claim on cash, %
  50.0
  31.7
  19.9
  12.4
  7.6
  4.7
  2.8
  1.7
  1.0
  0.6
  0.4
  0.2
  0.1
  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

Centrus Energy Corp. supplies low enriched uranium (LEU) for commercial nuclear power plants in the United States, Japan, Belgium, and internationally. The company operates in two segments, LEU and Contract Services. Its LEU is a component in the production of nuclear fuel for reactors to produce electricity. The company sells separative work units (SWU) component of LEU; SWU and uranium components of LEU; and uranium for utilities that operate nuclear power plants. It also focuses on deploying the American Centrifuge technology, a uranium enrichment gas centrifuge technology for commercial purposes, and to support U.S. energy and national security. The company was formerly known as USEC Inc. and changed its name to Centrus Energy Corp. in September 2014. Centrus Energy Corp. was founded in 1951 and is headquartered in Bethesda, Maryland.

FINANCIAL RATIOS  of  Centrus Energy (LEU)

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%

LEU stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LEU stock intrinsic value calculation we used $218.4 million for the last fiscal year's total revenue generated by Centrus Energy. The default revenue input number comes from 0001 income statement of Centrus Energy. 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 LEU stock valuation model: a) initial revenue growth rate of 2% 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 4.8%, whose default value for LEU is calculated based on our internal credit rating of Centrus Energy, 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 Centrus Energy.
    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 LEU stock the variable cost ratio is equal to 119.7%.

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 LEU 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 Centrus Energy.

Corporate tax rate of 27% is the nominal tax rate for Centrus Energy. 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 LEU 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 LEU are equal to 22.7%.

Life of production assets of 7.8 years is the average useful life of capital assets used in Centrus Energy 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 LEU is equal to -20.8%. 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 - $-218.9 million for Centrus Energy - 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 7.633 million for Centrus Energy 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 Centrus Energy at the current share price and the inputted number of shares is $0.0 billion.

COMPANY NEWS

▶ Centrus Reports Third Quarter 2018 Results   [Nov-07-18 04:44PM  Business Wire]
▶ Centrus Reports Second Quarter 2018 Results   [Aug-08-18 05:18PM  Business Wire]
▶ Centrus Reports First Quarter 2018 Results   [May-08-18 05:35PM  Business Wire]
▶ Centrus Signs Long-Term Supply Agreement with Orano   [May-03-18 06:45AM  Business Wire]
▶ Centrus to Webcast Conference Call on May 9 at 8:30 a.m. ET   [May-02-18 04:05PM  Business Wire]
▶ Centrus Reports Third Quarter 2017 Results   [Nov-09-17 05:00PM  Business Wire]
▶ How Should You Think About Centrus Energy Corps (LEU) Risks?   [Sep-21-17 05:33PM  Simply Wall St.]
▶ Centrus Reports Second Quarter 2017 Results   [Aug-02-17 05:23PM  Business Wire]
▶ ETFs with exposure to Centrus Energy Corp. : July 7, 2017   [Jul-07-17 03:07PM  Capital Cube]
▶ ETFs with exposure to Centrus Energy Corp. : June 8, 2017   [Jun-08-17 01:44PM  Capital Cube]
▶ ETFs with exposure to Centrus Energy Corp. : May 25, 2017   [May-25-17 12:42PM  Capital Cube]
▶ Centrus Reports First Quarter 2017 Results   [May-09-17 05:45PM  Business Wire]
▶ Centrus Reports Third Quarter 2016 Results   [05:00PM  Business Wire]
▶ Heres Why These Five Stocks Are Trading Higher Today   [Sep-22-16 01:35PM  at Insider Monkey]
▶ Centrus Reports Second Quarter 2016 Results   [04:30PM  Business Wire]
▶ Centrus Reports First Quarter 2016 Results   [05:19PM  Business Wire]

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