Intrinsic value of National Oilwell Varco - NOV

Previous Close

$34.96

  Intrinsic Value

$5.26

stock screener

  Rating & Target

str. sell

-85%

Previous close

$34.96

 
Intrinsic value

$5.26

 
Up/down potential

-85%

 
Rating

str. sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of NOV 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.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of National Oilwell Varco (NOV) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -50.86
  11.50
  10.85
  10.27
  9.74
  9.26
  8.84
  8.45
  8.11
  7.80
  7.52
  7.27
  7.04
  6.84
  6.65
  6.49
  6.34
  6.20
  6.08
  5.98
  5.88
  5.79
  5.71
  5.64
  5.58
  5.52
  5.47
  5.42
  5.38
  5.34
  5.31
Revenue, $m
  7,251
  8,085
  8,962
  9,882
  10,844
  11,849
  12,896
  13,987
  15,121
  16,300
  17,525
  18,799
  20,122
  21,498
  22,928
  24,415
  25,963
  27,574
  29,251
  30,999
  32,821
  34,722
  36,705
  38,775
  40,937
  43,196
  45,557
  48,027
  50,609
  53,312
  56,141
Variable operating expenses, $m
 
  5,840
  6,408
  7,004
  7,627
  8,277
  8,955
  9,661
  10,395
  11,158
  11,951
  12,169
  13,026
  13,916
  14,842
  15,805
  16,806
  17,849
  18,935
  20,067
  21,246
  22,476
  23,760
  25,100
  26,500
  27,962
  29,491
  31,089
  32,761
  34,510
  36,342
Fixed operating expenses, $m
 
  4,584
  4,698
  4,816
  4,936
  5,060
  5,186
  5,316
  5,449
  5,585
  5,725
  5,868
  6,014
  6,165
  6,319
  6,477
  6,639
  6,805
  6,975
  7,149
  7,328
  7,511
  7,699
  7,891
  8,089
  8,291
  8,498
  8,711
  8,928
  9,152
  9,380
Total operating expenses, $m
  9,662
  10,424
  11,106
  11,820
  12,563
  13,337
  14,141
  14,977
  15,844
  16,743
  17,676
  18,037
  19,040
  20,081
  21,161
  22,282
  23,445
  24,654
  25,910
  27,216
  28,574
  29,987
  31,459
  32,991
  34,589
  36,253
  37,989
  39,800
  41,689
  43,662
  45,722
Operating income, $m
  -2,411
  -2,339
  -2,144
  -1,937
  -1,718
  -1,488
  -1,245
  -990
  -723
  -443
  -151
  762
  1,082
  1,417
  1,767
  2,134
  2,518
  2,920
  3,341
  3,783
  4,247
  4,734
  5,246
  5,783
  6,349
  6,943
  7,569
  8,227
  8,920
  9,650
  10,419
EBITDA, $m
  -1,708
  -1,332
  -1,094
  -841
  -575
  -294
  1
  310
  633
  971
  1,324
  1,693
  2,079
  2,482
  2,903
  3,343
  3,803
  4,285
  4,790
  5,319
  5,873
  6,454
  7,064
  7,704
  8,376
  9,082
  9,825
  10,606
  11,427
  12,290
  13,199
Interest expense (income), $m
  101
  95
  122
  150
  180
  211
  244
  278
  313
  349
  388
  427
  468
  511
  556
  602
  650
  700
  752
  806
  863
  922
  983
  1,047
  1,114
  1,184
  1,257
  1,334
  1,414
  1,497
  1,584
Earnings before tax, $m
  -2,623
  -2,434
  -2,266
  -2,088
  -1,898
  -1,699
  -1,488
  -1,267
  -1,036
  -793
  -538
  335
  614
  906
  1,212
  1,532
  1,868
  2,220
  2,589
  2,977
  3,384
  3,812
  4,263
  4,736
  5,234
  5,759
  6,311
  6,893
  7,507
  8,153
  8,835
Tax expense, $m
  -207
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  90
  166
  245
  327
  414
  504
  599
  699
  804
  914
  1,029
  1,151
  1,279
  1,413
  1,555
  1,704
  1,861
  2,027
  2,201
  2,385
Net income, $m
  -2,412
  -2,434
  -2,266
  -2,088
  -1,898
  -1,699
  -1,488
  -1,267
  -1,036
  -793
  -538
  245
  448
  661
  884
  1,118
  1,363
  1,620
  1,890
  2,173
  2,471
  2,783
  3,112
  3,457
  3,821
  4,204
  4,607
  5,032
  5,480
  5,952
  6,449

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,440
  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
  21,140
  21,970
  24,353
  26,853
  29,468
  32,199
  35,044
  38,007
  41,089
  44,293
  47,623
  51,084
  54,680
  58,418
  62,304
  66,346
  70,551
  74,928
  79,487
  84,237
  89,188
  94,352
  99,741
  105,366
  111,242
  117,381
  123,797
  130,507
  137,526
  144,870
  152,557
Adjusted assets (=assets-cash), $m
  19,700
  21,970
  24,353
  26,853
  29,468
  32,199
  35,044
  38,007
  41,089
  44,293
  47,623
  51,084
  54,680
  58,418
  62,304
  66,346
  70,551
  74,928
  79,487
  84,237
  89,188
  94,352
  99,741
  105,366
  111,242
  117,381
  123,797
  130,507
  137,526
  144,870
  152,557
Revenue / Adjusted assets
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
Average production assets, $m
  6,827
  7,608
  8,433
  9,299
  10,205
  11,150
  12,135
  13,161
  14,229
  15,338
  16,491
  17,690
  18,935
  20,229
  21,575
  22,975
  24,431
  25,947
  27,525
  29,170
  30,885
  32,673
  34,539
  36,487
  38,522
  40,647
  42,870
  45,193
  47,623
  50,167
  52,829
Working capital, $m
  4,829
  4,042
  4,481
  4,941
  5,422
  5,925
  6,448
  6,993
  7,560
  8,150
  8,763
  9,399
  10,061
  10,749
  11,464
  12,208
  12,981
  13,787
  14,626
  15,500
  16,411
  17,361
  18,352
  19,387
  20,468
  21,598
  22,779
  24,013
  25,305
  26,656
  28,070
Total debt, $m
  3,214
  3,484
  4,294
  5,144
  6,033
  6,962
  7,929
  8,936
  9,984
  11,074
  12,206
  13,383
  14,605
  15,876
  17,197
  18,571
  20,001
  21,490
  23,039
  24,654
  26,338
  28,094
  29,926
  31,839
  33,836
  35,923
  38,105
  40,386
  42,773
  45,270
  47,883
Total liabilities, $m
  7,200
  7,470
  8,280
  9,130
  10,019
  10,948
  11,915
  12,922
  13,970
  15,060
  16,192
  17,369
  18,591
  19,862
  21,183
  22,557
  23,987
  25,476
  27,025
  28,640
  30,324
  32,080
  33,912
  35,825
  37,822
  39,909
  42,091
  44,372
  46,759
  49,256
  51,869
Total equity, $m
  13,940
  14,500
  16,073
  17,723
  19,449
  21,251
  23,129
  25,085
  27,119
  29,234
  31,431
  33,715
  36,089
  38,556
  41,121
  43,788
  46,564
  49,453
  52,461
  55,596
  58,864
  62,272
  65,829
  69,542
  73,419
  77,471
  81,706
  86,135
  90,767
  95,614
  100,687
Total liabilities and equity, $m
  21,140
  21,970
  24,353
  26,853
  29,468
  32,199
  35,044
  38,007
  41,089
  44,294
  47,623
  51,084
  54,680
  58,418
  62,304
  66,345
  70,551
  74,929
  79,486
  84,236
  89,188
  94,352
  99,741
  105,367
  111,241
  117,380
  123,797
  130,507
  137,526
  144,870
  152,556
Debt-to-equity ratio
  0.231
  0.240
  0.270
  0.290
  0.310
  0.330
  0.340
  0.360
  0.370
  0.380
  0.390
  0.400
  0.400
  0.410
  0.420
  0.420
  0.430
  0.430
  0.440
  0.440
  0.450
  0.450
  0.450
  0.460
  0.460
  0.460
  0.470
  0.470
  0.470
  0.470
  0.480
Adjusted equity ratio
  0.635
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -2,412
  -2,434
  -2,266
  -2,088
  -1,898
  -1,699
  -1,488
  -1,267
  -1,036
  -793
  -538
  245
  448
  661
  884
  1,118
  1,363
  1,620
  1,890
  2,173
  2,471
  2,783
  3,112
  3,457
  3,821
  4,204
  4,607
  5,032
  5,480
  5,952
  6,449
Depreciation, amort., depletion, $m
  703
  1,007
  1,051
  1,096
  1,144
  1,194
  1,245
  1,299
  1,356
  1,414
  1,475
  931
  997
  1,065
  1,136
  1,209
  1,286
  1,366
  1,449
  1,535
  1,626
  1,720
  1,818
  1,920
  2,027
  2,139
  2,256
  2,379
  2,506
  2,640
  2,780
Funds from operations, $m
  2,004
  -1,427
  -1,216
  -992
  -755
  -505
  -243
  32
  320
  621
  937
  1,176
  1,445
  1,726
  2,020
  2,327
  2,649
  2,986
  3,339
  3,708
  4,096
  4,503
  4,929
  5,378
  5,848
  6,343
  6,864
  7,411
  7,986
  8,592
  9,230
Change in working capital, $m
  1,044
  417
  439
  460
  481
  502
  524
  545
  567
  590
  613
  637
  662
  688
  715
  744
  774
  805
  839
  874
  911
  950
  992
  1,035
  1,081
  1,130
  1,181
  1,235
  1,291
  1,351
  1,414
Cash from operations, $m
  960
  -1,844
  -1,654
  -1,452
  -1,236
  -1,007
  -767
  -513
  -247
  32
  324
  539
  783
  1,038
  1,305
  1,584
  1,875
  2,181
  2,500
  2,834
  3,185
  3,552
  3,938
  4,343
  4,767
  5,214
  5,683
  6,176
  6,695
  7,241
  7,815
Maintenance CAPEX, $m
  0
  -359
  -400
  -444
  -489
  -537
  -587
  -639
  -693
  -749
  -807
  -868
  -931
  -997
  -1,065
  -1,136
  -1,209
  -1,286
  -1,366
  -1,449
  -1,535
  -1,626
  -1,720
  -1,818
  -1,920
  -2,027
  -2,139
  -2,256
  -2,379
  -2,506
  -2,640
New CAPEX, $m
  -284
  -781
  -825
  -866
  -906
  -945
  -985
  -1,026
  -1,067
  -1,110
  -1,153
  -1,198
  -1,245
  -1,294
  -1,346
  -1,400
  -1,456
  -1,516
  -1,579
  -1,645
  -1,715
  -1,788
  -1,866
  -1,948
  -2,035
  -2,126
  -2,222
  -2,324
  -2,430
  -2,543
  -2,662
Cash from investing activities, $m
  -488
  -1,140
  -1,225
  -1,310
  -1,395
  -1,482
  -1,572
  -1,665
  -1,760
  -1,859
  -1,960
  -2,066
  -2,176
  -2,291
  -2,411
  -2,536
  -2,665
  -2,802
  -2,945
  -3,094
  -3,250
  -3,414
  -3,586
  -3,766
  -3,955
  -4,153
  -4,361
  -4,580
  -4,809
  -5,049
  -5,302
Free cash flow, $m
  472
  -2,984
  -2,880
  -2,761
  -2,631
  -2,490
  -2,339
  -2,178
  -2,007
  -1,827
  -1,637
  -1,527
  -1,393
  -1,253
  -1,106
  -951
  -790
  -621
  -444
  -259
  -65
  139
  352
  577
  813
  1,061
  1,322
  1,596
  1,886
  2,191
  2,513
Issuance/(repayment) of debt, $m
  -900
  776
  810
  850
  889
  928
  968
  1,007
  1,048
  1,089
  1,132
  1,177
  1,223
  1,271
  1,321
  1,374
  1,430
  1,488
  1,550
  1,615
  1,683
  1,756
  1,832
  1,913
  1,998
  2,087
  2,182
  2,281
  2,386
  2,497
  2,614
Issuance/(repurchase) of shares, $m
  4
  3,928
  3,840
  3,738
  3,624
  3,501
  3,367
  3,223
  3,070
  2,907
  2,736
  2,039
  1,925
  1,806
  1,680
  1,549
  1,412
  1,269
  1,119
  962
  797
  625
  445
  256
  57
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -911
  4,704
  4,650
  4,588
  4,513
  4,429
  4,335
  4,230
  4,118
  3,996
  3,868
  3,216
  3,148
  3,077
  3,001
  2,923
  2,842
  2,757
  2,669
  2,577
  2,480
  2,381
  2,277
  2,169
  2,055
  2,087
  2,182
  2,281
  2,386
  2,497
  2,614
Total cash flow (excl. dividends), $m
  -442
  1,719
  1,770
  1,826
  1,883
  1,939
  1,995
  2,052
  2,111
  2,170
  2,232
  1,689
  1,755
  1,824
  1,896
  1,972
  2,052
  2,136
  2,224
  2,318
  2,416
  2,520
  2,629
  2,745
  2,867
  3,148
  3,503
  3,878
  4,272
  4,688
  5,127
Retained Cash Flow (-), $m
  2,443
  -3,928
  -3,840
  -3,738
  -3,624
  -3,501
  -3,367
  -3,223
  -3,070
  -2,907
  -2,736
  -2,284
  -2,373
  -2,467
  -2,565
  -2,667
  -2,775
  -2,889
  -3,009
  -3,135
  -3,268
  -3,408
  -3,557
  -3,713
  -3,878
  -4,052
  -4,235
  -4,428
  -4,632
  -4,847
  -5,073
Prev. year cash balance distribution, $m
 
  934
  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
 
  -1,275
  -2,070
  -1,911
  -1,742
  -1,562
  -1,371
  -1,170
  -959
  -737
  -504
  -595
  -619
  -643
  -669
  -695
  -724
  -753
  -784
  -817
  -852
  -889
  -927
  -968
  -1,011
  -904
  -732
  -551
  -360
  -159
  53
Discount rate, %
 
  6.50
  6.83
  7.17
  7.52
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
  19.01
  19.96
  20.96
  22.01
  23.11
  24.27
  25.48
  26.75
PV of cash for distribution, $m
 
  -1,197
  -1,814
  -1,553
  -1,303
  -1,068
  -850
  -652
  -476
  -323
  -193
  -197
  -175
  -153
  -133
  -113
  -95
  -79
  -64
  -52
  -41
  -31
  -24
  -18
  -13
  -8
  -4
  -2
  -1
  0
  0
Current shareholders' claim on cash, %
  100
  75.7
  59.0
  47.3
  38.9
  32.6
  27.9
  24.3
  21.5
  19.3
  17.5
  16.4
  15.5
  14.7
  14.0
  13.5
  13.0
  12.7
  12.4
  12.1
  12.0
  11.8
  11.7
  11.7
  11.7
  11.7
  11.7
  11.7
  11.7
  11.7
  11.7

National Oilwell Varco, Inc. is an oilfield equipment manufacturer and technology provider. The Company operates through four segments: Rig Systems, Rig Aftermarket, Wellbore Technologies and Completion & Production Solutions. The Rig Systems segment makes and supports the capital equipment and integrated systems needed to drill oil and gas wells on land and offshore. The Rig Systems segment designs, manufactures and sells land rigs, offshore drilling equipment packages, and drilling rig components. The Rig Aftermarket segment provides aftermarket products and services to support a large installed base of land and offshore rigs, and drilling rig components manufactured by the Company's Rig Systems segment. The Wellbore Technologies segment designs, manufactures, rents and sells a range of equipment and technologies used to perform drilling operations. The Completion & Production Solutions segment integrates technologies for well completions and oil and gas production.

FINANCIAL RATIOS  of  National Oilwell Varco (NOV)

Valuation Ratios
P/E Ratio -5.5
Price to Sales 1.8
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 13.8
Price to Free Cash Flow 19.6
Growth Rates
Sales Growth Rate -50.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -37.3%
Cap. Spend. - 3 Yr. Gr. Rate -14.3%
Financial Strength
Quick Ratio 3
Current Ratio 0.2
LT Debt to Equity 19.4%
Total Debt to Equity 23.1%
Interest Coverage -25
Management Effectiveness
Return On Assets -9.8%
Ret/ On Assets - 3 Yr. Avg. -1.5%
Return On Total Capital -12.9%
Ret/ On T. Cap. - 3 Yr. Avg. -2.1%
Return On Equity -15.9%
Return On Equity - 3 Yr. Avg. -2.8%
Asset Turnover 0.3
Profitability Ratios
Gross Margin -1.4%
Gross Margin - 3 Yr. Avg. 15.5%
EBITDA Margin -25.1%
EBITDA Margin - 3 Yr. Avg. -1%
Operating Margin -33.3%
Oper. Margin - 3 Yr. Avg. -6.3%
Pre-Tax Margin -36.2%
Pre-Tax Margin - 3 Yr. Avg. -8%
Net Profit Margin -33.3%
Net Profit Margin - 3 Yr. Avg. -8.9%
Effective Tax Rate 7.9%
Eff/ Tax Rate - 3 Yr. Avg. 2.5%
Payout Ratio -9.5%

NOV stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NOV stock intrinsic value calculation we used $7251 million for the last fiscal year's total revenue generated by National Oilwell Varco. The default revenue input number comes from 2016 income statement of National Oilwell Varco. 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 NOV stock valuation model: a) initial revenue growth rate of 11.5% 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 6.5%, whose default value for NOV is calculated based on our internal credit rating of National Oilwell Varco, 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 National Oilwell Varco.
    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 NOV stock the variable cost ratio is equal to 73.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $4472 million in the base year in the intrinsic value calculation for NOV 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 3.5% for National Oilwell Varco.

Corporate tax rate of 27% is the nominal tax rate for National Oilwell Varco. 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 NOV 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 NOV are equal to 94.1%.

Life of production assets of 19 years is the average useful life of capital assets used in National Oilwell Varco 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 NOV is equal to 50%. 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 - $13940 million for National Oilwell Varco - 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 374.514 million for National Oilwell Varco 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 National Oilwell Varco at the current share price and the inputted number of shares is $13.1 billion.

RELATED COMPANIES Price Int.Val. Rating
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OIS Oil States Int 26.50 4.62  str.sell
GE General Electr 14.49 46.28  str.buy

COMPANY NEWS

▶ Drilling products company anticipates Houston job cuts due to NOV acquisition   [Feb-21-18 09:10AM  American City Business Journals]
▶ Stock Market News For Feb 6, 2018   [Feb-06-18 10:15AM  Zacks]
▶ National Oilwell Varco reports 4Q loss   [05:03AM  Associated Press]
▶ Deja Vu: Oil Investors Could Relive 2014's Swings   [10:51AM  The Wall Street Journal]
▶ Wall Streets Forecasts for NOV ahead of 4Q17 Earnings   [Jan-26-18 07:30AM  Market Realist]
▶ National Oilwell Varcos Reaction to Crude Oil Changes   [Jan-25-18 10:31AM  Market Realist]
▶ Will US Rig Counts Impact National Oilwell Varco in 4Q17?   [Jan-24-18 10:32AM  Market Realist]
▶ How National Oilwell Varco Performed in 3Q17   [09:03AM  Market Realist]
▶ National Oilwell Varcos Outlook for 4Q17   [07:36AM  Market Realist]
▶ What Wall Street Analysts Expect from NOVs 4Q17 Earnings   [Jan-23-18 04:42PM  Market Realist]
▶ Schlumbergers Next 7-Day Stock Price Forecast   [Jan-22-18 11:30AM  Market Realist]
▶ Weatherfords Stock Price Forecast   [Jan-19-18 10:35AM  Market Realist]
▶ Analyzing SLB, HAL, BHGE, and NOVs Net Debt   [Jan-18-18 10:31AM  Market Realist]
▶ Schlumbergers Earnings Made Progress in 9M17   [Jan-17-18 03:30PM  Market Realist]
▶ Short Interest in Baker Hughes on January 8   [Jan-11-18 01:05PM  Market Realist]
▶ Analyzing Halliburtons Revenue and Earnings in 3Q17   [Jan-10-18 02:00PM  Market Realist]
▶ Whats Schlumbergers Next 7-Day Stock Price Forecast?   [Jan-03-18 04:20PM  Market Realist]
▶ Weatherford Internationals Valuation Compared to Its Peers   [Jan-02-18 04:35PM  Market Realist]
▶ The Third-Highest Oilfield Services Free Cash Earner in 3Q17   [Dec-27-17 04:05PM  Market Realist]
▶ Schlumbergers Stock Price Forecast for the Next 7 Days   [Dec-26-17 11:25AM  Market Realist]
▶ Could Weatherford International Stock Change Course?   [Dec-20-17 08:03AM  Market Realist]
▶ What Wall Street Forecasts for National Oilwell Varco   [Dec-19-17 07:31AM  Market Realist]
▶ Whats Schlumbergers Next 7-Day Stock Price Forecast?   [Dec-18-17 02:25PM  Market Realist]
▶ Whats National Oilwell Varcos Dividend Yield after 3Q17?   [Dec-14-17 12:47PM  Market Realist]
▶ How National Oilwell Varcos Stock Is Performing   [Dec-13-17 01:21PM  Market Realist]
▶ What Schlumbergers Next-7-Day Stock Price Forecast Tells Us   [Dec-11-17 03:22PM  Market Realist]
▶ OPEC's latest deal with Russia could fall apart and tank crude oil   [Nov-28-17 11:03AM  Yahoo Finance Video]
▶ Exxon Mobil's new strategy: lean and mean   [12:05PM  Yahoo Finance Video]
▶ Whats Schlumbergers Next 7-Day Stock Price Forecast?   [Nov-20-17 02:00PM  Market Realist]
▶ NOV spinoff Now Inc. announces new CFO and related C-suite changes   [09:25AM  American City Business Journals]
▶ At $31.94, Is National Oilwell Varco Inc (NOV) A Buy?   [Nov-16-17 05:17PM  Simply Wall St.]
Financial statements of NOV
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