Intrinsic value of Parsley Energy Cl A - PE

Previous Close

$17.45

  Intrinsic Value

$4.21

stock screener

  Rating & Target

str. sell

-76%

Previous close

$17.45

 
Intrinsic value

$4.21

 
Up/down potential

-76%

 
Rating

str. sell

We calculate the intrinsic value of PE 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 4.9

 

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
  1,547
  2,391
  3,575
  5,187
  7,318
  10,061
  13,505
  17,733
  22,818
  28,821
  35,789
  43,755
  52,740
  62,750
  73,783
  85,827
  98,866
  112,878
  127,840
  143,730
  160,527
  178,214
  196,777
  216,208
  236,504
  257,668
  279,708
  302,639
  326,482
  351,264
Variable operating expenses, $m
  832
  1,286
  1,923
  2,791
  3,937
  5,413
  7,266
  9,540
  12,276
  15,506
  19,254
  23,540
  28,374
  33,760
  39,695
  46,175
  53,190
  60,728
  68,778
  77,327
  86,364
  95,879
  105,866
  116,320
  127,239
  138,625
  150,483
  162,820
  175,647
  188,980
Fixed operating expenses, $m
  189
  193
  197
  202
  206
  211
  215
  220
  225
  230
  235
  240
  245
  251
  256
  262
  268
  274
  280
  286
  292
  299
  305
  312
  319
  326
  333
  340
  348
  355
Total operating expenses, $m
  1,021
  1,479
  2,120
  2,993
  4,143
  5,624
  7,481
  9,760
  12,501
  15,736
  19,489
  23,780
  28,619
  34,011
  39,951
  46,437
  53,458
  61,002
  69,058
  77,613
  86,656
  96,178
  106,171
  116,632
  127,558
  138,951
  150,816
  163,160
  175,995
  189,335
Operating income, $m
  526
  911
  1,454
  2,195
  3,175
  4,437
  6,024
  7,972
  10,317
  13,085
  16,299
  19,975
  24,120
  28,740
  33,831
  39,390
  45,408
  51,876
  58,782
  66,117
  73,871
  82,036
  90,606
  99,576
  108,946
  118,717
  128,892
  139,479
  150,487
  161,928
EBITDA, $m
  1,088
  1,780
  2,753
  4,079
  5,833
  8,092
  10,930
  14,414
  18,605
  23,554
  29,300
  35,869
  43,278
  51,534
  60,633
  70,567
  81,321
  92,879
  105,220
  118,327
  132,183
  146,773
  162,086
  178,114
  194,857
  212,315
  230,496
  249,413
  269,082
  289,525
Interest expense (income), $m
  66
  127
  269
  476
  766
  1,161
  1,683
  2,356
  3,200
  4,236
  5,482
  6,953
  8,661
  10,613
  12,815
  15,268
  17,971
  20,923
  24,118
  27,552
  31,219
  35,113
  39,229
  43,564
  48,113
  52,875
  57,848
  63,035
  68,436
  74,056
  79,899
Earnings before tax, $m
  399
  642
  978
  1,429
  2,014
  2,754
  3,668
  4,773
  6,081
  7,603
  9,347
  11,314
  13,508
  15,925
  18,564
  21,419
  24,485
  27,757
  31,230
  34,899
  38,759
  42,807
  47,042
  51,464
  56,072
  60,868
  65,857
  71,043
  76,431
  82,030
Tax expense, $m
  108
  173
  264
  386
  544
  744
  990
  1,289
  1,642
  2,053
  2,524
  3,055
  3,647
  4,300
  5,012
  5,783
  6,611
  7,494
  8,432
  9,423
  10,465
  11,558
  12,701
  13,895
  15,139
  16,434
  17,781
  19,182
  20,636
  22,148
Net income, $m
  291
  469
  714
  1,043
  1,470
  2,010
  2,678
  3,484
  4,439
  5,551
  6,823
  8,259
  9,861
  11,625
  13,551
  15,636
  17,874
  20,263
  22,798
  25,476
  28,294
  31,249
  34,341
  37,568
  40,932
  44,434
  48,076
  51,861
  55,795
  59,882

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
  13,939
  21,536
  32,208
  46,732
  65,932
  90,641
  121,666
  159,755
  205,566
  259,647
  322,423
  394,193
  475,135
  565,317
  664,712
  773,220
  890,684
  1,016,916
  1,151,710
  1,294,864
  1,446,191
  1,605,533
  1,772,770
  1,947,824
  2,130,669
  2,321,331
  2,519,888
  2,726,474
  2,941,277
  3,164,537
Adjusted assets (=assets-cash), $m
  13,939
  21,536
  32,208
  46,732
  65,932
  90,641
  121,666
  159,755
  205,566
  259,647
  322,423
  394,193
  475,135
  565,317
  664,712
  773,220
  890,684
  1,016,916
  1,151,710
  1,294,864
  1,446,191
  1,605,533
  1,772,770
  1,947,824
  2,130,669
  2,321,331
  2,519,888
  2,726,474
  2,941,277
  3,164,537
Revenue / Adjusted assets
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
  0.111
Average production assets, $m
  9,161
  14,154
  21,168
  30,713
  43,332
  59,572
  79,963
  104,996
  135,105
  170,648
  211,906
  259,076
  312,273
  371,544
  436,869
  508,184
  585,385
  668,349
  756,940
  851,025
  950,482
  1,055,206
  1,165,119
  1,280,170
  1,400,342
  1,525,650
  1,656,148
  1,791,923
  1,933,098
  2,079,832
Working capital, $m
  -630
  -973
  -1,455
  -2,111
  -2,979
  -4,095
  -5,497
  -7,217
  -9,287
  -11,730
  -14,566
  -17,808
  -21,465
  -25,539
  -30,030
  -34,932
  -40,238
  -45,941
  -52,031
  -58,498
  -65,335
  -72,533
  -80,088
  -87,997
  -96,257
  -104,871
  -113,841
  -123,174
  -132,878
  -142,964
Total debt, $m
  4,641
  8,204
  13,209
  20,020
  29,025
  40,614
  55,165
  73,029
  94,514
  119,878
  149,320
  182,980
  220,942
  263,237
  309,853
  360,743
  415,834
  475,037
  538,255
  605,395
  676,367
  751,098
  829,532
  911,633
  997,387
  1,086,807
  1,179,931
  1,276,820
  1,377,562
  1,482,271
Total liabilities, $m
  6,538
  10,101
  15,105
  21,917
  30,922
  42,510
  57,061
  74,925
  96,411
  121,775
  151,216
  184,876
  222,838
  265,134
  311,750
  362,640
  417,731
  476,934
  540,152
  607,291
  678,264
  752,995
  831,429
  913,529
  999,284
  1,088,704
  1,181,827
  1,278,716
  1,379,459
  1,484,168
Total equity, $m
  7,402
  11,436
  17,102
  24,814
  35,010
  48,130
  64,605
  84,830
  109,156
  137,873
  171,207
  209,316
  252,297
  300,183
  352,962
  410,580
  472,953
  539,982
  611,558
  687,573
  767,928
  852,538
  941,341
  1,034,294
  1,131,385
  1,232,627
  1,338,060
  1,447,758
  1,561,818
  1,680,369
Total liabilities and equity, $m
  13,940
  21,537
  32,207
  46,731
  65,932
  90,640
  121,666
  159,755
  205,567
  259,648
  322,423
  394,192
  475,135
  565,317
  664,712
  773,220
  890,684
  1,016,916
  1,151,710
  1,294,864
  1,446,192
  1,605,533
  1,772,770
  1,947,823
  2,130,669
  2,321,331
  2,519,887
  2,726,474
  2,941,277
  3,164,537
Debt-to-equity ratio
  0.630
  0.720
  0.770
  0.810
  0.830
  0.840
  0.850
  0.860
  0.870
  0.870
  0.870
  0.870
  0.880
  0.880
  0.880
  0.880
  0.880
  0.880
  0.880
  0.880
  0.880
  0.880
  0.880
  0.880
  0.880
  0.880
  0.880
  0.880
  0.880
  0.880
Adjusted equity ratio
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531
  0.531

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  291
  469
  714
  1,043
  1,470
  2,010
  2,678
  3,484
  4,439
  5,551
  6,823
  8,259
  9,861
  11,625
  13,551
  15,636
  17,874
  20,263
  22,798
  25,476
  28,294
  31,249
  34,341
  37,568
  40,932
  44,434
  48,076
  51,861
  55,795
  59,882
Depreciation, amort., depletion, $m
  562
  868
  1,299
  1,884
  2,658
  3,655
  4,906
  6,441
  8,289
  10,469
  13,000
  15,894
  19,158
  22,794
  26,802
  31,177
  35,913
  41,003
  46,438
  52,210
  58,312
  64,737
  71,480
  78,538
  85,911
  93,598
  101,604
  109,934
  118,595
  127,597
Funds from operations, $m
  853
  1,337
  2,013
  2,927
  4,128
  5,665
  7,584
  9,926
  12,728
  16,020
  19,823
  24,154
  29,018
  34,419
  40,353
  46,813
  53,787
  61,266
  69,236
  77,686
  86,605
  95,986
  105,821
  116,106
  126,843
  138,032
  149,680
  161,795
  174,390
  187,479
Change in working capital, $m
  -236
  -343
  -482
  -656
  -867
  -1,116
  -1,402
  -1,721
  -2,070
  -2,443
  -2,836
  -3,242
  -3,657
  -4,074
  -4,490
  -4,902
  -5,307
  -5,703
  -6,090
  -6,467
  -6,837
  -7,199
  -7,555
  -7,908
  -8,260
  -8,614
  -8,970
  -9,333
  -9,704
  -10,086
Cash from operations, $m
  1,090
  1,680
  2,495
  3,583
  4,996
  6,781
  8,985
  11,646
  14,797
  18,463
  22,659
  27,396
  32,675
  38,494
  44,844
  51,715
  59,094
  66,969
  75,326
  84,153
  93,442
  103,184
  113,376
  124,015
  135,103
  146,646
  158,650
  171,128
  184,094
  197,565
Maintenance CAPEX, $m
  -351
  -562
  -868
  -1,299
  -1,884
  -2,658
  -3,655
  -4,906
  -6,441
  -8,289
  -10,469
  -13,000
  -15,894
  -19,158
  -22,794
  -26,802
  -31,177
  -35,913
  -41,003
  -46,438
  -52,210
  -58,312
  -64,737
  -71,480
  -78,538
  -85,911
  -93,598
  -101,604
  -109,934
  -118,595
New CAPEX, $m
  -3,435
  -4,993
  -7,013
  -9,546
  -12,619
  -16,240
  -20,391
  -25,033
  -30,108
  -35,544
  -41,258
  -47,169
  -53,198
  -59,270
  -65,326
  -71,315
  -77,201
  -82,963
  -88,591
  -94,085
  -99,457
  -104,725
  -109,913
  -115,051
  -120,172
  -125,309
  -130,498
  -135,775
  -141,175
  -146,733
Cash from investing activities, $m
  -3,786
  -5,555
  -7,881
  -10,845
  -14,503
  -18,898
  -24,046
  -29,939
  -36,549
  -43,833
  -51,727
  -60,169
  -69,092
  -78,428
  -88,120
  -98,117
  -108,378
  -118,876
  -129,594
  -140,523
  -151,667
  -163,037
  -174,650
  -186,531
  -198,710
  -211,220
  -224,096
  -237,379
  -251,109
  -265,328
Free cash flow, $m
  -2,697
  -3,875
  -5,387
  -7,261
  -9,507
  -12,117
  -15,061
  -18,293
  -21,752
  -25,369
  -29,068
  -32,774
  -36,417
  -39,935
  -43,276
  -46,402
  -49,284
  -51,908
  -54,268
  -56,370
  -58,225
  -59,852
  -61,274
  -62,516
  -63,606
  -64,574
  -65,446
  -66,251
  -67,015
  -67,763
Issuance/(repayment) of debt, $m
  2,459
  3,563
  5,005
  6,812
  9,005
  11,589
  14,551
  17,864
  21,485
  25,364
  29,442
  33,660
  37,962
  42,295
  46,616
  50,890
  55,091
  59,203
  63,219
  67,139
  70,972
  74,731
  78,434
  82,100
  85,754
  89,420
  93,123
  96,889
  100,743
  104,709
Issuance/(repurchase) of shares, $m
  2,489
  3,565
  4,952
  6,669
  8,725
  11,110
  13,797
  16,741
  19,886
  23,166
  26,511
  29,850
  33,120
  36,261
  39,227
  41,982
  44,500
  46,766
  48,778
  50,539
  52,061
  53,361
  54,462
  55,385
  56,159
  56,807
  57,358
  57,836
  58,265
  58,669
Cash from financing (excl. dividends), $m  
  4,948
  7,128
  9,957
  13,481
  17,730
  22,699
  28,348
  34,605
  41,371
  48,530
  55,953
  63,510
  71,082
  78,556
  85,843
  92,872
  99,591
  105,969
  111,997
  117,678
  123,033
  128,092
  132,896
  137,485
  141,913
  146,227
  150,481
  154,725
  159,008
  163,378
Total cash flow (excl. dividends), $m
  2,252
  3,254
  4,570
  6,220
  8,223
  10,582
  13,287
  16,312
  19,619
  23,161
  26,885
  30,737
  34,665
  38,622
  42,568
  46,470
  50,306
  54,061
  57,728
  61,308
  64,808
  68,241
  71,622
  74,970
  78,307
  81,654
  85,035
  88,474
  91,993
  95,615
Retained Cash Flow (-), $m
  -2,781
  -4,034
  -5,666
  -7,712
  -10,195
  -13,121
  -16,475
  -20,225
  -24,326
  -28,717
  -33,334
  -38,110
  -42,980
  -47,887
  -52,779
  -57,618
  -62,374
  -67,029
  -71,576
  -76,015
  -80,355
  -84,611
  -88,802
  -92,954
  -97,091
  -101,241
  -105,434
  -109,697
  -114,060
  -118,551
Prev. year cash balance distribution, $m
  91
  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
  -438
  -780
  -1,096
  -1,492
  -1,972
  -2,538
  -3,187
  -3,913
  -4,706
  -5,556
  -6,449
  -7,373
  -8,315
  -9,265
  -10,211
  -11,147
  -12,067
  -12,968
  -13,848
  -14,707
  -15,546
  -16,370
  -17,181
  -17,984
  -18,784
  -19,587
  -20,398
  -21,223
  -22,067
  -22,936
Discount rate, %
  4.40
  4.62
  4.85
  5.09
  5.35
  5.62
  5.90
  6.19
  6.50
  6.83
  7.17
  7.53
  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
PV of cash for distribution, $m
  -420
  -713
  -951
  -1,223
  -1,520
  -1,829
  -2,134
  -2,420
  -2,670
  -2,871
  -3,012
  -3,087
  -3,094
  -3,035
  -2,917
  -2,748
  -2,538
  -2,300
  -2,046
  -1,786
  -1,530
  -1,286
  -1,061
  -858
  -681
  -529
  -403
  -300
  -219
  -156
Current shareholders' claim on cash, %
  65.8
  44.9
  31.7
  23.0
  17.2
  13.1
  10.3
  8.2
  6.7
  5.6
  4.7
  4.0
  3.5
  3.1
  2.7
  2.4
  2.2
  2.0
  1.9
  1.7
  1.6
  1.5
  1.4
  1.3
  1.3
  1.2
  1.2
  1.1
  1.1
  1.0

Parsley Energy, Inc. is a holding company. The Company is an independent oil and natural gas company. The Company focuses on the acquisition, development and exploitation of unconventional oil and natural gas reserves in the Permian Basin. The Permian Basin is located in West Texas and Southeastern New Mexico and includes three primary sub-areas: the Midland Basin, the Central Basin Platform and the Delaware Basin. The Company's properties are primarily located in the Midland and Delaware Basins, where it focuses on horizontal development drilling and target various stacked pay intervals in the Spraberry, Wolfcamp, Upper Pennsylvanian (Cline) and Atoka shales. As of December 31, 2016, it had an average working interest of 87% in 166 gross (146.7 net) horizontal wells, of which 151 gross (132.4 net) are in the Midland Basin. As of December 31, 2016, the Company operated seven horizontal rigs and three vertical drilling rigs.

FINANCIAL RATIOS  of  Parsley Energy Cl A (PE)

Valuation Ratios
P/E Ratio -49
Price to Sales 7.9
Price to Book 1.7
Price to Tangible Book
Price to Cash Flow 15.9
Price to Free Cash Flow -3.1
Growth Rates
Sales Growth Rate 72.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 1368.1%
Cap. Spend. - 3 Yr. Gr. Rate 44.8%
Financial Strength
Quick Ratio 2
Current Ratio 0.3
LT Debt to Equity 49.9%
Total Debt to Equity 53.1%
Interest Coverage -1
Management Effectiveness
Return On Assets -0.6%
Ret/ On Assets - 3 Yr. Avg. 0.5%
Return On Total Capital -3%
Ret/ On T. Cap. - 3 Yr. Avg. -1.2%
Return On Equity -4.4%
Return On Equity - 3 Yr. Avg. -1.3%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 81%
Gross Margin - 3 Yr. Avg. 77.4%
EBITDA Margin 42.4%
EBITDA Margin - 3 Yr. Avg. 53.3%
Operating Margin -1.1%
Oper. Margin - 3 Yr. Avg. -4.1%
Pre-Tax Margin -23.1%
Pre-Tax Margin - 3 Yr. Avg. -9.6%
Net Profit Margin -16.2%
Net Profit Margin - 3 Yr. Avg. -9.1%
Effective Tax Rate 16%
Eff/ Tax Rate - 3 Yr. Avg. 26.5%
Payout Ratio 0%

PE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PE stock intrinsic value calculation we used $967.044 million for the last fiscal year's total revenue generated by Parsley Energy Cl A. The default revenue input number comes from 0001 income statement of Parsley Energy Cl A. 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 PE 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 4.4%, whose default value for PE is calculated based on our internal credit rating of Parsley Energy Cl A, 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 Parsley Energy Cl A.
    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 PE stock the variable cost ratio is equal to 53.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $185 million in the base year in the intrinsic value calculation for PE 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 5.8% for Parsley Energy Cl A.

Corporate tax rate of 27% is the nominal tax rate for Parsley Energy Cl A. 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 PE 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 PE are equal to 592.1%.

Life of production assets of 16.3 years is the average useful life of capital assets used in Parsley Energy Cl A 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 PE is equal to -40.7%. 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 - $4712.295 million for Parsley Energy Cl A - 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 279.7 million for Parsley Energy Cl A 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 Parsley Energy Cl A at the current share price and the inputted number of shares is $4.9 billion.

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COMPANY NEWS

▶ Is Parsley Energy Inc (PE) Going to Burn These Hedge Funds?   [Dec-08-18 10:58AM  Insider Monkey]
▶ Weekly Top Insider Buys Highlight for the Week of Nov. 30   [Dec-01-18 05:50PM  GuruFocus.com]
▶ Parsley Energy: 3Q Earnings Snapshot   [05:07PM  Associated Press]
▶ Is Parsley Energy Inc (NYSE:PE) A Financially Strong Company?   [Oct-15-18 11:50AM  Simply Wall St.]
▶ Why Fundamental Investors Love Parsley Energy Inc (NYSE:PE)   [Aug-31-18 11:33AM  Simply Wall St.]
▶ Oil Prices Take A Breather As Supply Jumps   [Aug-10-18 03:00PM  Oilprice.com]
▶ Parsley Energy, Inc. Class A to Host Earnings Call   [Aug-08-18 07:00AM  ACCESSWIRE]
▶ Parsley Energy (PE) Q2 Earnings Lag Estimates   [Aug-07-18 05:20PM  Zacks]
▶ Parsley Energy: 2Q Earnings Snapshot   [04:14PM  Associated Press]
▶ These Top Shale Stocks Are Near Buy Points Ahead Of Earnings   [04:02PM  Investor's Business Daily]
▶ IBD Stock Of The Day Nears Buy Point With Earnings Set To Spike Again   [Jul-30-18 01:11PM  Investor's Business Daily]
▶ 5 Hated Growth Stocks That You Shouldnt Ignore   [Jul-20-18 02:04PM  InvestorPlace]
▶ 3 High-Octane Growth Stocks to Put on Your Watchlist   [Jul-18-18 05:10PM  Motley Fool]
▶ Energy Stocks Decline as Production Concerns Deepen   [Jul-02-18 06:01PM  TheStreet.com]
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▶ [$$] Oil Is Above $70, but Frackers Still Struggle to Make Money   [May-18-18 12:09AM  The Wall Street Journal]
▶ [$$] Oil's Above $70, but Frackers Still Struggle to Make Money   [May-17-18 05:55AM  The Wall Street Journal]
▶ Parsley Energy: 1Q Earnings Snapshot   [May-03-18 04:15PM  Associated Press]
▶ 9 'High Beta' Energy Stocks That Can Soar   [06:00AM  Investopedia]
▶ 3 Mispriced Stocks in Unloved Sectors   [Apr-05-18 01:21PM  Investopedia]
▶ 3 Stock Picks in Unloved Sectors   [Apr-04-18 03:30PM  Barrons.com]
▶ How Confident Are Insiders About Parsley Energy Inc (NYSE:PE)?   [Mar-21-18 07:18PM  Simply Wall St.]
▶ ConocoPhillips: We 'Didn't Drill Our Brains Out' Like Shale Rivals Did   [Mar-06-18 04:21PM  Investor's Business Daily]
▶ 'Apple Of Oil' Joins Other Shale Firms With Measured Tone On Drilling   [Feb-28-18 04:59PM  Investor's Business Daily]
▶ Why Carrizo Oil & Gas Inc.'s Stock Is Tumbling Today   [Feb-27-18 11:39AM  Motley Fool]
▶ Parsley Energy shares soar as Austin oil driller beats Wall Street estimates   [Feb-26-18 03:50PM  American City Business Journals]
▶ Parsley Energy To Participate In Upcoming Conferences   [Feb-23-18 04:05PM  PR Newswire]
▶ U.S. Crude Stockpiles Seen Rising For Fourth Straight Week   [Feb-22-18 08:32AM  Investor's Business Daily]
▶ Continental Resources, Parsley Energy, Matador Beat, See Output Growth   [Feb-21-18 04:46PM  Investor's Business Daily]
▶ Parsley Energy tops Street 4Q forecasts   [04:37PM  Associated Press]
▶ Parsley Energy Q4 Earnings Outlook   [11:35AM  Benzinga]
▶ Roku Earnings, Federal Reserve Minutes Headline Investing Action Plan   [Feb-20-18 04:16PM  Investor's Business Daily]
▶ Clean Oil That Only Costs $20   [Feb-13-18 07:00PM  Oilprice.com]
▶ Fort Worth oil and gas firm Double Eagle III raises $1 billion from Apollo   [Feb-05-18 01:55PM  American City Business Journals]
▶ Here's Why Parsley Energy Inc's Stock Is Plunging Today   [Jan-30-18 12:38PM  Motley Fool]
▶ What 2018 May Mean For The Oil & Gas Industry   [Dec-29-17 07:29PM  Forbes]

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