Intrinsic value of Cheniere Energy - LNG

Previous Close

$60.76

  Intrinsic Value

$4.44

stock screener

  Rating & Target

str. sell

-93%

Previous close

$60.76

 
Intrinsic value

$4.44

 
Up/down potential

-93%

 
Rating

str. sell

We calculate the intrinsic value of LNG 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 15.1

 

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, %
  24.30
  22.37
  20.63
  19.07
  17.66
  16.40
  15.26
  14.23
  13.31
  12.48
  11.73
  11.06
  10.45
  9.91
  9.42
  8.97
  8.58
  8.22
  7.90
  7.61
  7.35
  7.11
  6.90
  6.71
  6.54
  6.39
  6.25
  6.12
  6.01
  5.91
Revenue, $m
  6,962
  8,519
  10,277
  12,237
  14,399
  16,759
  19,316
  22,065
  25,002
  28,121
  31,420
  34,894
  38,540
  42,358
  46,346
  50,505
  54,837
  59,343
  64,030
  68,901
  73,962
  79,222
  84,689
  90,372
  96,282
  102,430
  108,829
  115,492
  122,433
  129,668
Variable operating expenses, $m
  4,677
  5,721
  6,900
  8,214
  9,664
  11,247
  12,962
  14,805
  16,774
  18,866
  21,071
  23,401
  25,846
  28,406
  31,081
  33,870
  36,775
  39,797
  42,940
  46,206
  49,601
  53,128
  56,795
  60,606
  64,569
  68,692
  72,983
  77,452
  82,107
  86,958
Fixed operating expenses, $m
  471
  482
  492
  503
  514
  525
  537
  549
  561
  573
  586
  599
  612
  625
  639
  653
  667
  682
  697
  712
  728
  744
  760
  777
  794
  812
  830
  848
  867
  886
Total operating expenses, $m
  5,148
  6,203
  7,392
  8,717
  10,178
  11,772
  13,499
  15,354
  17,335
  19,439
  21,657
  24,000
  26,458
  29,031
  31,720
  34,523
  37,442
  40,479
  43,637
  46,918
  50,329
  53,872
  57,555
  61,383
  65,363
  69,504
  73,813
  78,300
  82,974
  87,844
Operating income, $m
  1,814
  2,317
  2,885
  3,520
  4,221
  4,987
  5,818
  6,711
  7,666
  8,682
  9,763
  10,895
  12,082
  13,326
  14,626
  15,982
  17,394
  18,864
  20,393
  21,982
  23,633
  25,350
  27,134
  28,989
  30,919
  32,926
  35,016
  37,192
  39,460
  41,824
EBITDA, $m
  2,748
  3,457
  4,260
  5,155
  6,143
  7,223
  8,394
  9,653
  10,999
  12,429
  13,941
  15,534
  17,207
  18,959
  20,789
  22,698
  24,686
  26,755
  28,907
  31,143
  33,468
  35,884
  38,395
  41,006
  43,721
  46,546
  49,487
  52,549
  55,739
  59,065
Interest expense (income), $m
  66
  1,368
  1,370
  1,728
  2,133
  2,585
  3,082
  3,626
  4,215
  4,848
  5,525
  6,243
  7,003
  7,803
  8,643
  9,522
  10,441
  11,399
  12,397
  13,435
  14,514
  15,636
  16,802
  18,013
  19,273
  20,582
  21,943
  23,359
  24,833
  26,367
  27,966
Earnings before tax, $m
  446
  947
  1,157
  1,387
  1,636
  1,905
  2,192
  2,496
  2,818
  3,157
  3,520
  3,892
  4,279
  4,683
  5,104
  5,541
  5,996
  6,468
  6,958
  7,468
  7,997
  8,548
  9,121
  9,717
  10,337
  10,983
  11,657
  12,359
  13,092
  13,857
Tax expense, $m
  120
  256
  312
  374
  442
  514
  592
  674
  761
  852
  950
  1,051
  1,155
  1,265
  1,378
  1,496
  1,619
  1,746
  1,879
  2,016
  2,159
  2,308
  2,463
  2,623
  2,791
  2,966
  3,147
  3,337
  3,535
  3,742
Net income, $m
  326
  692
  845
  1,012
  1,194
  1,390
  1,600
  1,822
  2,057
  2,305
  2,570
  2,841
  3,124
  3,419
  3,726
  4,045
  4,377
  4,721
  5,079
  5,451
  5,838
  6,240
  6,658
  7,093
  7,546
  8,018
  8,510
  9,022
  9,557
  10,116

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
  32,995
  40,377
  48,707
  57,996
  68,239
  79,428
  91,547
  104,575
  118,491
  133,276
  148,908
  165,373
  182,655
  200,749
  219,650
  239,361
  259,889
  281,249
  303,458
  326,543
  350,532
  375,461
  401,370
  428,304
  456,313
  485,451
  515,777
  547,355
  580,251
  614,538
Adjusted assets (=assets-cash), $m
  32,995
  40,377
  48,707
  57,996
  68,239
  79,428
  91,547
  104,575
  118,491
  133,276
  148,908
  165,373
  182,655
  200,749
  219,650
  239,361
  259,889
  281,249
  303,458
  326,543
  350,532
  375,461
  401,370
  428,304
  456,313
  485,451
  515,777
  547,355
  580,251
  614,538
Revenue / Adjusted assets
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
Average production assets, $m
  27,772
  33,984
  40,996
  48,814
  57,436
  66,853
  77,053
  88,018
  99,732
  112,176
  125,333
  139,191
  153,737
  168,966
  184,875
  201,465
  218,743
  236,721
  255,414
  274,844
  295,035
  316,018
  337,825
  360,495
  384,069
  408,594
  434,119
  460,697
  488,385
  517,244
Working capital, $m
  -675
  -826
  -997
  -1,187
  -1,397
  -1,626
  -1,874
  -2,140
  -2,425
  -2,728
  -3,048
  -3,385
  -3,738
  -4,109
  -4,496
  -4,899
  -5,319
  -5,756
  -6,211
  -6,683
  -7,174
  -7,685
  -8,215
  -8,766
  -9,339
  -9,936
  -10,556
  -11,203
  -11,876
  -12,578
Total debt, $m
  25,362
  32,005
  39,503
  47,862
  57,082
  67,151
  78,058
  89,783
  102,308
  115,614
  129,684
  144,501
  160,056
  176,340
  193,351
  211,091
  229,566
  248,790
  268,778
  289,554
  311,145
  333,581
  356,899
  381,140
  406,348
  432,572
  459,866
  488,285
  517,892
  548,751
Total liabilities, $m
  29,696
  36,339
  43,837
  52,196
  61,416
  71,485
  82,392
  94,117
  106,642
  119,948
  134,018
  148,835
  164,390
  180,674
  197,685
  215,425
  233,900
  253,124
  273,112
  293,888
  315,479
  337,915
  361,233
  385,474
  410,682
  436,906
  464,200
  492,619
  522,226
  553,085
Total equity, $m
  3,300
  4,038
  4,871
  5,800
  6,824
  7,943
  9,155
  10,457
  11,849
  13,328
  14,891
  16,537
  18,266
  20,075
  21,965
  23,936
  25,989
  28,125
  30,346
  32,654
  35,053
  37,546
  40,137
  42,830
  45,631
  48,545
  51,578
  54,735
  58,025
  61,454
Total liabilities and equity, $m
  32,996
  40,377
  48,708
  57,996
  68,240
  79,428
  91,547
  104,574
  118,491
  133,276
  148,909
  165,372
  182,656
  200,749
  219,650
  239,361
  259,889
  281,249
  303,458
  326,542
  350,532
  375,461
  401,370
  428,304
  456,313
  485,451
  515,778
  547,354
  580,251
  614,539
Debt-to-equity ratio
  7.690
  7.930
  8.110
  8.250
  8.360
  8.450
  8.530
  8.590
  8.630
  8.670
  8.710
  8.740
  8.760
  8.780
  8.800
  8.820
  8.830
  8.850
  8.860
  8.870
  8.880
  8.880
  8.890
  8.900
  8.910
  8.910
  8.920
  8.920
  8.930
  8.930
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
  326
  692
  845
  1,012
  1,194
  1,390
  1,600
  1,822
  2,057
  2,305
  2,570
  2,841
  3,124
  3,419
  3,726
  4,045
  4,377
  4,721
  5,079
  5,451
  5,838
  6,240
  6,658
  7,093
  7,546
  8,018
  8,510
  9,022
  9,557
  10,116
Depreciation, amort., depletion, $m
  933
  1,141
  1,374
  1,635
  1,922
  2,236
  2,576
  2,942
  3,332
  3,747
  4,178
  4,640
  5,125
  5,632
  6,162
  6,715
  7,291
  7,891
  8,514
  9,161
  9,835
  10,534
  11,261
  12,016
  12,802
  13,620
  14,471
  15,357
  16,280
  17,241
Funds from operations, $m
  1,259
  1,832
  2,219
  2,647
  3,117
  3,627
  4,176
  4,764
  5,389
  6,051
  6,747
  7,481
  8,249
  9,051
  9,888
  10,761
  11,668
  12,612
  13,593
  14,613
  15,673
  16,774
  17,919
  19,110
  20,348
  21,638
  22,980
  24,379
  25,837
  27,357
Change in working capital, $m
  -132
  -151
  -171
  -190
  -210
  -229
  -248
  -267
  -285
  -303
  -320
  -337
  -354
  -370
  -387
  -403
  -420
  -437
  -455
  -472
  -491
  -510
  -530
  -551
  -573
  -596
  -621
  -646
  -673
  -702
Cash from operations, $m
  1,391
  1,983
  2,389
  2,837
  3,326
  3,856
  4,424
  5,031
  5,674
  6,354
  7,067
  7,818
  8,602
  9,421
  10,275
  11,164
  12,088
  13,049
  14,048
  15,085
  16,164
  17,284
  18,449
  19,661
  20,922
  22,234
  23,601
  25,025
  26,510
  28,059
Maintenance CAPEX, $m
  -745
  -926
  -1,133
  -1,367
  -1,627
  -1,915
  -2,228
  -2,568
  -2,934
  -3,324
  -3,739
  -4,178
  -4,640
  -5,125
  -5,632
  -6,162
  -6,715
  -7,291
  -7,891
  -8,514
  -9,161
  -9,835
  -10,534
  -11,261
  -12,016
  -12,802
  -13,620
  -14,471
  -15,357
  -16,280
New CAPEX, $m
  -5,427
  -6,213
  -7,012
  -7,818
  -8,622
  -9,417
  -10,200
  -10,965
  -11,713
  -12,444
  -13,158
  -13,858
  -14,547
  -15,229
  -15,909
  -16,590
  -17,278
  -17,978
  -18,693
  -19,430
  -20,191
  -20,982
  -21,807
  -22,670
  -23,575
  -24,525
  -25,525
  -26,578
  -27,688
  -28,859
Cash from investing activities, $m
  -6,172
  -7,139
  -8,145
  -9,185
  -10,249
  -11,332
  -12,428
  -13,533
  -14,647
  -15,768
  -16,897
  -18,036
  -19,187
  -20,354
  -21,541
  -22,752
  -23,993
  -25,269
  -26,584
  -27,944
  -29,352
  -30,817
  -32,341
  -33,931
  -35,591
  -37,327
  -39,145
  -41,049
  -43,045
  -45,139
Free cash flow, $m
  -4,780
  -5,155
  -5,755
  -6,347
  -6,923
  -7,476
  -8,004
  -8,503
  -8,973
  -9,414
  -9,829
  -10,218
  -10,584
  -10,932
  -11,266
  -11,589
  -11,905
  -12,220
  -12,536
  -12,858
  -13,189
  -13,533
  -13,892
  -14,270
  -14,669
  -15,093
  -15,544
  -16,023
  -16,534
  -17,079
Issuance/(repayment) of debt, $m
  26
  6,643
  7,498
  8,360
  9,219
  10,070
  10,906
  11,725
  12,525
  13,306
  14,069
  14,818
  15,555
  16,284
  17,011
  17,740
  18,476
  19,224
  19,989
  20,776
  21,590
  22,436
  23,318
  24,241
  25,208
  26,224
  27,293
  28,420
  29,607
  30,859
Issuance/(repurchase) of shares, $m
  6,146
  47
  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  
  6,172
  6,690
  7,498
  8,360
  9,219
  10,070
  10,906
  11,725
  12,525
  13,306
  14,069
  14,818
  15,555
  16,284
  17,011
  17,740
  18,476
  19,224
  19,989
  20,776
  21,590
  22,436
  23,318
  24,241
  25,208
  26,224
  27,293
  28,420
  29,607
  30,859
Total cash flow (excl. dividends), $m
  1,391
  1,534
  1,742
  2,012
  2,297
  2,594
  2,902
  3,222
  3,552
  3,892
  4,240
  4,600
  4,971
  5,352
  5,745
  6,151
  6,570
  7,003
  7,452
  7,918
  8,401
  8,904
  9,426
  9,971
  10,539
  11,131
  11,750
  12,396
  13,072
  13,779
Retained Cash Flow (-), $m
  -6,472
  -738
  -833
  -929
  -1,024
  -1,119
  -1,212
  -1,303
  -1,392
  -1,478
  -1,563
  -1,646
  -1,728
  -1,809
  -1,890
  -1,971
  -2,053
  -2,136
  -2,221
  -2,308
  -2,399
  -2,493
  -2,591
  -2,693
  -2,801
  -2,914
  -3,033
  -3,158
  -3,290
  -3,429
Prev. year cash balance distribution, $m
  1,408
  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
  -3,672
  796
  909
  1,084
  1,272
  1,475
  1,690
  1,919
  2,160
  2,413
  2,677
  2,954
  3,242
  3,543
  3,855
  4,180
  4,517
  4,868
  5,231
  5,609
  6,002
  6,411
  6,835
  7,277
  7,738
  8,217
  8,717
  9,239
  9,783
  10,351
Discount rate, %
  14.50
  15.23
  15.99
  16.79
  17.62
  18.51
  19.43
  20.40
  21.42
  22.49
  23.62
  24.80
  26.04
  27.34
  28.71
  30.14
  31.65
  33.23
  34.90
  36.64
  38.47
  40.40
  42.42
  44.54
  46.76
  49.10
  51.56
  54.14
  56.84
  59.68
PV of cash for distribution, $m
  -3,207
  600
  583
  583
  565
  532
  488
  435
  377
  317
  260
  207
  160
  120
  87
  62
  42
  28
  18
  11
  6
  4
  2
  1
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3
  49.3

Cheniere Energy, Inc. (Cheniere) is an energy company primarily engaged in liquefied natural gas (LNG)-related businesses. The Company operates through two segments: LNG terminal business, and LNG and natural gas marketing business. Its LNG terminal segment consists of the Sabine Pass and Corpus Christi LNG terminals. Its LNG and natural gas marketing segment consists of LNG and natural gas marketing activities by Cheniere Marketing. Cheniere Marketing is developing a portfolio of long- and medium-term SPAs with professional staff based in the United States, the United Kingdom, Singapore and Chile. The Company conducts its business through its subsidiaries, including the development, construction and operation of its LNG terminal business and the development and operation of its LNG and natural gas marketing business. The Company owns and operates the Sabine Pass LNG terminal in Louisiana through its ownership interest in and management agreements with Cheniere Partners.

FINANCIAL RATIOS  of  Cheniere Energy (LNG)

Valuation Ratios
P/E Ratio -23.7
Price to Sales 11.3
Price to Book -10.4
Price to Tangible Book
Price to Cash Flow -35.8
Price to Free Cash Flow -3
Growth Rates
Sales Growth Rate 373.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -36.4%
Cap. Spend. - 3 Yr. Gr. Rate 6.9%
Financial Strength
Quick Ratio 4
Current Ratio 0.9
LT Debt to Equity -1553.6%
Total Debt to Equity -1571.3%
Interest Coverage -9
Management Effectiveness
Return On Assets -2.6%
Ret/ On Assets - 3 Yr. Avg. -4.3%
Return On Total Capital -3.5%
Ret/ On T. Cap. - 3 Yr. Avg. -6.2%
Return On Equity 53.1%
Return On Equity - 3 Yr. Avg. -2204.7%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 34.5%
Gross Margin - 3 Yr. Avg. 57.9%
EBITDA Margin -33%
EBITDA Margin - 3 Yr. Avg. -198.2%
Operating Margin -12.9%
Oper. Margin - 3 Yr. Avg. -122.8%
Pre-Tax Margin -51.7%
Pre-Tax Margin - 3 Yr. Avg. -237.7%
Net Profit Margin -47.5%
Net Profit Margin - 3 Yr. Avg. -203.9%
Effective Tax Rate -0.3%
Eff/ Tax Rate - 3 Yr. Avg. -0.3%
Payout Ratio 0%

LNG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LNG stock intrinsic value calculation we used $5601 million for the last fiscal year's total revenue generated by Cheniere Energy. The default revenue input number comes from 0001 income statement of Cheniere 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 LNG stock valuation model: a) initial revenue growth rate of 24.3% 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 14.5%, whose default value for LNG is calculated based on our internal credit rating of Cheniere 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 Cheniere 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 LNG stock the variable cost ratio is equal to 67.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $461 million in the base year in the intrinsic value calculation for LNG 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 Cheniere Energy.

Corporate tax rate of 27% is the nominal tax rate for Cheniere 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 LNG 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 LNG are equal to 398.9%.

Life of production assets of 62.9 years is the average useful life of capital assets used in Cheniere 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 LNG is equal to -9.7%. 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 - $-1764 million for Cheniere 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 248.186 million for Cheniere 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 Cheniere Energy at the current share price and the inputted number of shares is $15.1 billion.

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COMPANY NEWS

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▶ Expect Downward Pressure on Tellurian as Trade Wars Unfold   [Sep-21-18 02:12PM  TheStreet.com]
▶ China Empire Strikes Back at U.S. LNG   [01:00PM  TheStreet.com]
▶ The Millennials Making Millions In Texas Oil   [Sep-15-18 07:00PM  Oilprice.com]
▶ Two Houston energy cos. make moves on billions of dollars in debt   [Sep-14-18 03:27PM  American City Business Journals]
▶ U.S. Sen. Ted Cruz: 'I think tariffs are a bad idea'   [Sep-12-18 09:23AM  American City Business Journals]
▶ Rick Perry Flying to Moscow to Crusade for U.S. LNG   [Sep-11-18 12:40PM  TheStreet.com]
▶ 10 Incredible Facts About American LNG Exports   [Sep-09-18 09:32AM  Motley Fool]
▶ Tellurian Inc. Stock Has Millionaire-Maker Potential   [Aug-24-18 10:20AM  Motley Fool]
▶ Oil Prices Fall Despite Supply Fears   [Aug-14-18 03:00PM  Oilprice.com]
▶ Cheniere Energy: 2Q Earnings Snapshot   [08:55AM  Associated Press]
▶ How Cheniere and Tellurian Are Losing the Trade War   [Aug-06-18 01:16PM  TheStreet.com]

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