Intrinsic value of Lonestar Resources US Inc. - LONE

Previous Close

$2.10

  Intrinsic Value

$52.77

stock screener

  Rating & Target

str. buy

+999%

Previous close

$2.10

 
Intrinsic value

$52.77

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of LONE 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 0.1

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  322
  497
  743
  1,078
  1,521
  2,091
  2,807
  3,686
  4,743
  5,990
  7,439
  9,095
  10,962
  13,043
  15,336
  17,839
  20,549
  23,462
  26,571
  29,874
  33,366
  37,042
  40,900
  44,939
  49,157
  53,556
  58,137
  62,903
  67,859
  73,010
Variable operating expenses, $m
  88
  136
  204
  295
  417
  573
  769
  1,010
  1,299
  1,641
  2,038
  2,492
  3,004
  3,574
  4,202
  4,888
  5,631
  6,428
  7,281
  8,186
  9,142
  10,149
  11,207
  12,313
  13,469
  14,674
  15,930
  17,236
  18,593
  20,005
Fixed operating expenses, $m
  108
  111
  113
  116
  118
  121
  123
  126
  129
  132
  135
  138
  141
  144
  147
  150
  153
  157
  160
  164
  167
  171
  175
  179
  183
  187
  191
  195
  199
  204
Total operating expenses, $m
  196
  247
  317
  411
  535
  694
  892
  1,136
  1,428
  1,773
  2,173
  2,630
  3,145
  3,718
  4,349
  5,038
  5,784
  6,585
  7,441
  8,350
  9,309
  10,320
  11,382
  12,492
  13,652
  14,861
  16,121
  17,431
  18,792
  20,209
Operating income, $m
  125
  250
  426
  667
  986
  1,397
  1,914
  2,550
  3,314
  4,217
  5,266
  6,465
  7,818
  9,325
  10,987
  12,801
  14,765
  16,876
  19,131
  21,525
  24,056
  26,721
  29,519
  32,447
  35,506
  38,695
  42,017
  45,473
  49,067
  52,802
EBITDA, $m
  260
  458
  737
  1,118
  1,622
  2,272
  3,089
  4,091
  5,298
  6,723
  8,377
  10,269
  12,403
  14,780
  17,401
  20,263
  23,360
  26,690
  30,245
  34,020
  38,012
  42,215
  46,626
  51,243
  56,067
  61,096
  66,334
  71,783
  77,450
  83,339
Interest expense (income), $m
  0
  46
  80
  128
  196
  288
  410
  567
  764
  1,005
  1,296
  1,640
  2,038
  2,494
  3,008
  3,580
  4,212
  4,901
  5,646
  6,448
  7,304
  8,213
  9,173
  10,185
  11,247
  12,359
  13,520
  14,730
  15,991
  17,303
  18,666
Earnings before tax, $m
  79
  170
  299
  472
  698
  988
  1,348
  1,786
  2,309
  2,921
  3,626
  4,427
  5,324
  6,317
  7,406
  8,590
  9,865
  11,230
  12,683
  14,221
  15,843
  17,548
  19,333
  21,200
  23,147
  25,176
  27,287
  29,482
  31,764
  34,135
Tax expense, $m
  21
  46
  81
  127
  189
  267
  364
  482
  623
  789
  979
  1,195
  1,437
  1,706
  2,000
  2,319
  2,664
  3,032
  3,424
  3,840
  4,278
  4,738
  5,220
  5,724
  6,250
  6,797
  7,367
  7,960
  8,576
  9,217
Net income, $m
  58
  124
  218
  344
  510
  721
  984
  1,304
  1,685
  2,132
  2,647
  3,232
  3,886
  4,612
  5,407
  6,270
  7,201
  8,198
  9,258
  10,381
  11,566
  12,810
  14,113
  15,476
  16,897
  18,378
  19,919
  21,522
  23,188
  24,919

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
  1,191
  1,840
  2,752
  3,993
  5,634
  7,745
  10,396
  13,651
  17,566
  22,187
  27,551
  33,684
  40,600
  48,306
  56,799
  66,071
  76,108
  86,895
  98,413
  110,645
  123,576
  137,192
  151,482
  166,440
  182,064
  198,356
  215,323
  232,976
  251,330
  270,408
Adjusted assets (=assets-cash), $m
  1,191
  1,840
  2,752
  3,993
  5,634
  7,745
  10,396
  13,651
  17,566
  22,187
  27,551
  33,684
  40,600
  48,306
  56,799
  66,071
  76,108
  86,895
  98,413
  110,645
  123,576
  137,192
  151,482
  166,440
  182,064
  198,356
  215,323
  232,976
  251,330
  270,408
Revenue / Adjusted assets
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
  0.270
Average production assets, $m
  1,009
  1,559
  2,331
  3,382
  4,772
  6,560
  8,806
  11,562
  14,878
  18,792
  23,335
  28,530
  34,388
  40,915
  48,108
  55,962
  64,463
  73,599
  83,355
  93,716
  104,668
  116,200
  128,304
  140,973
  154,207
  168,006
  182,376
  197,328
  212,874
  229,033
Working capital, $m
  -36
  -55
  -82
  -120
  -169
  -232
  -312
  -409
  -526
  -665
  -826
  -1,009
  -1,217
  -1,448
  -1,702
  -1,980
  -2,281
  -2,604
  -2,949
  -3,316
  -3,704
  -4,112
  -4,540
  -4,988
  -5,456
  -5,945
  -6,453
  -6,982
  -7,532
  -8,104
Total debt, $m
  750
  1,205
  1,845
  2,715
  3,865
  5,345
  7,203
  9,485
  12,229
  15,468
  19,228
  23,527
  28,376
  33,778
  39,732
  46,231
  53,267
  60,829
  68,903
  77,478
  86,542
  96,087
  106,104
  116,590
  127,542
  138,963
  150,857
  163,231
  176,098
  189,471
Total liabilities, $m
  835
  1,290
  1,929
  2,799
  3,949
  5,429
  7,288
  9,569
  12,313
  15,553
  19,313
  23,612
  28,461
  33,862
  39,816
  46,316
  53,352
  60,913
  68,987
  77,562
  86,627
  96,172
  106,189
  116,675
  127,627
  139,048
  150,941
  163,316
  176,183
  189,556
Total equity, $m
  356
  550
  823
  1,194
  1,685
  2,316
  3,108
  4,082
  5,252
  6,634
  8,238
  10,071
  12,139
  14,443
  16,983
  19,755
  22,756
  25,982
  29,425
  33,083
  36,949
  41,020
  45,293
  49,766
  54,437
  59,309
  64,382
  69,660
  75,148
  80,852
Total liabilities and equity, $m
  1,191
  1,840
  2,752
  3,993
  5,634
  7,745
  10,396
  13,651
  17,565
  22,187
  27,551
  33,683
  40,600
  48,305
  56,799
  66,071
  76,108
  86,895
  98,412
  110,645
  123,576
  137,192
  151,482
  166,441
  182,064
  198,357
  215,323
  232,976
  251,331
  270,408
Debt-to-equity ratio
  2.110
  2.190
  2.240
  2.270
  2.290
  2.310
  2.320
  2.320
  2.330
  2.330
  2.330
  2.340
  2.340
  2.340
  2.340
  2.340
  2.340
  2.340
  2.340
  2.340
  2.340
  2.340
  2.340
  2.340
  2.340
  2.340
  2.340
  2.340
  2.340
  2.340
Adjusted equity ratio
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299
  0.299

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  58
  124
  218
  344
  510
  721
  984
  1,304
  1,685
  2,132
  2,647
  3,232
  3,886
  4,612
  5,407
  6,270
  7,201
  8,198
  9,258
  10,381
  11,566
  12,810
  14,113
  15,476
  16,897
  18,378
  19,919
  21,522
  23,188
  24,919
Depreciation, amort., depletion, $m
  135
  208
  311
  451
  636
  875
  1,174
  1,542
  1,984
  2,506
  3,111
  3,804
  4,585
  5,455
  6,414
  7,462
  8,595
  9,813
  11,114
  12,495
  13,956
  15,493
  17,107
  18,796
  20,561
  22,401
  24,317
  26,310
  28,383
  30,538
Funds from operations, $m
  192
  332
  529
  795
  1,146
  1,596
  2,158
  2,846
  3,669
  4,638
  5,759
  7,036
  8,471
  10,067
  11,821
  13,732
  15,796
  18,011
  20,372
  22,877
  25,521
  28,303
  31,221
  34,272
  37,458
  40,779
  44,236
  47,832
  51,571
  55,456
Change in working capital, $m
  -13
  -19
  -27
  -37
  -49
  -63
  -79
  -98
  -117
  -138
  -161
  -184
  -207
  -231
  -255
  -278
  -301
  -323
  -345
  -367
  -388
  -408
  -428
  -448
  -468
  -488
  -508
  -529
  -550
  -572
Cash from operations, $m
  205
  352
  556
  832
  1,195
  1,659
  2,238
  2,943
  3,787
  4,776
  5,919
  7,219
  8,679
  10,298
  12,076
  14,010
  16,097
  18,334
  20,718
  23,243
  25,909
  28,711
  31,649
  34,721
  37,927
  41,267
  44,745
  48,361
  52,121
  56,028
Maintenance CAPEX, $m
  -84
  -135
  -208
  -311
  -451
  -636
  -875
  -1,174
  -1,542
  -1,984
  -2,506
  -3,111
  -3,804
  -4,585
  -5,455
  -6,414
  -7,462
  -8,595
  -9,813
  -11,114
  -12,495
  -13,956
  -15,493
  -17,107
  -18,796
  -20,561
  -22,401
  -24,317
  -26,310
  -28,383
New CAPEX, $m
  -378
  -550
  -772
  -1,051
  -1,390
  -1,788
  -2,245
  -2,757
  -3,316
  -3,914
  -4,543
  -5,194
  -5,858
  -6,527
  -7,194
  -7,853
  -8,501
  -9,136
  -9,756
  -10,361
  -10,952
  -11,532
  -12,104
  -12,670
  -13,233
  -13,799
  -14,371
  -14,952
  -15,546
  -16,158
Cash from investing activities, $m
  -462
  -685
  -980
  -1,362
  -1,841
  -2,424
  -3,120
  -3,931
  -4,858
  -5,898
  -7,049
  -8,305
  -9,662
  -11,112
  -12,649
  -14,267
  -15,963
  -17,731
  -19,569
  -21,475
  -23,447
  -25,488
  -27,597
  -29,777
  -32,029
  -34,360
  -36,772
  -39,269
  -41,856
  -44,541
Free cash flow, $m
  -257
  -333
  -424
  -530
  -645
  -766
  -883
  -988
  -1,071
  -1,121
  -1,130
  -1,086
  -983
  -814
  -573
  -258
  134
  603
  1,149
  1,769
  2,461
  3,223
  4,052
  4,944
  5,897
  6,907
  7,973
  9,093
  10,264
  11,487
Issuance/(repayment) of debt, $m
  313
  455
  639
  870
  1,150
  1,480
  1,858
  2,282
  2,744
  3,239
  3,760
  4,299
  4,848
  5,402
  5,954
  6,500
  7,036
  7,561
  8,074
  8,575
  9,064
  9,545
  10,017
  10,486
  10,952
  11,421
  11,894
  12,375
  12,867
  13,373
Issuance/(repurchase) of shares, $m
  76
  70
  55
  27
  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  
  389
  525
  694
  897
  1,150
  1,480
  1,858
  2,282
  2,744
  3,239
  3,760
  4,299
  4,848
  5,402
  5,954
  6,500
  7,036
  7,561
  8,074
  8,575
  9,064
  9,545
  10,017
  10,486
  10,952
  11,421
  11,894
  12,375
  12,867
  13,373
Total cash flow (excl. dividends), $m
  132
  192
  270
  367
  505
  715
  976
  1,294
  1,673
  2,118
  2,631
  3,213
  3,865
  4,588
  5,380
  6,242
  7,170
  8,165
  9,223
  10,344
  11,526
  12,768
  14,069
  15,430
  16,849
  18,328
  19,867
  21,467
  23,131
  24,860
Retained Cash Flow (-), $m
  -134
  -194
  -273
  -371
  -491
  -631
  -793
  -973
  -1,170
  -1,382
  -1,604
  -1,834
  -2,068
  -2,304
  -2,539
  -2,772
  -3,001
  -3,225
  -3,444
  -3,657
  -3,866
  -4,071
  -4,273
  -4,473
  -4,672
  -4,871
  -5,073
  -5,278
  -5,488
  -5,704
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
  -1
  -2
  -3
  -4
  14
  83
  183
  321
  503
  736
  1,027
  1,379
  1,797
  2,284
  2,841
  3,469
  4,169
  4,939
  5,779
  6,686
  7,659
  8,697
  9,797
  10,957
  12,178
  13,457
  14,794
  16,189
  17,643
  19,156
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
  -1
  -2
  -2
  -3
  8
  43
  83
  124
  164
  199
  228
  247
  256
  254
  243
  223
  198
  169
  139
  111
  85
  63
  45
  31
  21
  13
  8
  5
  3
  2
Current shareholders' claim on cash, %
  67.2
  52.5
  46.0
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9
  43.9

Lonestar Resources US Inc., an independent oil and gas company, engages in the acquisition, development, and production of unconventional resources in the United States. The company primarily focuses on Eagle Ford Shale properties that cover an area of 35,000 net acres in Texas counties. It also holds interests in an early-stage project in the Bakken Petroleum System that covers an area of 34,163 net acres in the Bakken, Three Forks, and Lower Lodgepole formations located in the Roosevelt County, Montana. The company is based in Fort Worth, Texas.

FINANCIAL RATIOS  of  Lonestar Resources US Inc. (LONE)

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%

LONE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LONE stock intrinsic value calculation we used $201 million for the last fiscal year's total revenue generated by Lonestar Resources US Inc.. The default revenue input number comes from 0001 income statement of Lonestar Resources US 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 LONE stock valuation model: a) initial revenue growth rate of 60% 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 LONE is calculated based on our internal credit rating of Lonestar Resources US 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 Lonestar Resources US 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 LONE stock the variable cost ratio is equal to 27.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $106 million in the base year in the intrinsic value calculation for LONE 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 10.6% for Lonestar Resources US Inc..

Corporate tax rate of 27% is the nominal tax rate for Lonestar Resources US 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 LONE 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 LONE are equal to 313.7%.

Life of production assets of 7.5 years is the average useful life of capital assets used in Lonestar Resources US 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 LONE is equal to -11.1%. 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 - $222.547 million for Lonestar Resources US 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 24.647 million for Lonestar Resources US 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 Lonestar Resources US Inc. at the current share price and the inputted number of shares is $0.1 billion.

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