Intrinsic value of Patterson-UTI Energy - PTEN

Previous Close

$16.90

  Intrinsic Value

$4.16

stock screener

  Rating & Target

str. sell

-75%

Previous close

$16.90

 
Intrinsic value

$4.16

 
Up/down potential

-75%

 
Rating

str. sell

We calculate the intrinsic value of PTEN 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 2017), $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 3.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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
   2047

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
  3,771
  5,827
  8,714
  12,643
  17,837
  24,522
  32,916
  43,221
  55,615
  70,246
  87,229
  106,646
  128,544
  152,942
  179,833
  209,189
  240,968
  275,120
  311,587
  350,316
  391,257
  434,366
  479,610
  526,970
  576,438
  628,020
  681,738
  737,629
  795,742
  856,143
Variable operating expenses, $m
  3,300
  5,061
  7,535
  10,902
  15,353
  21,081
  28,273
  37,102
  47,722
  60,259
  74,743
  91,380
  110,144
  131,049
  154,091
  179,244
  206,474
  235,737
  266,984
  300,170
  335,250
  372,188
  410,956
  451,536
  493,922
  538,121
  584,149
  632,039
  681,834
  733,589
Fixed operating expenses, $m
  585
  597
  611
  624
  638
  652
  666
  681
  696
  711
  727
  743
  759
  776
  793
  810
  828
  846
  865
  884
  903
  923
  944
  964
  986
  1,007
  1,029
  1,052
  1,075
  1,099
Total operating expenses, $m
  3,885
  5,658
  8,146
  11,526
  15,991
  21,733
  28,939
  37,783
  48,418
  60,970
  75,470
  92,123
  110,903
  131,825
  154,884
  180,054
  207,302
  236,583
  267,849
  301,054
  336,153
  373,111
  411,900
  452,500
  494,908
  539,128
  585,178
  633,091
  682,909
  734,688
Operating income, $m
  -113
  168
  568
  1,117
  1,847
  2,790
  3,977
  5,437
  7,197
  9,276
  11,760
  14,523
  17,642
  21,118
  24,950
  29,135
  33,666
  38,536
  43,738
  49,263
  55,104
  61,255
  67,711
  74,470
  81,530
  88,892
  96,560
  104,537
  112,833
  121,456
EBITDA, $m
  631
  1,280
  2,197
  3,450
  5,110
  7,250
  9,941
  13,247
  17,226
  21,925
  27,383
  33,624
  40,664
  48,510
  57,158
  66,600
  76,823
  87,810
  99,543
  112,005
  125,178
  139,050
  153,610
  168,850
  184,770
  201,370
  218,659
  236,647
  255,350
  274,791
Interest expense (income), $m
  37
  47
  104
  188
  305
  465
  676
  948
  1,289
  1,708
  2,212
  2,807
  3,498
  4,288
  5,178
  6,170
  7,264
  8,458
  9,750
  11,139
  12,622
  14,196
  15,861
  17,614
  19,454
  21,380
  23,392
  25,489
  27,674
  29,947
  32,310
Earnings before tax, $m
  -160
  64
  380
  812
  1,382
  2,114
  3,029
  4,148
  5,488
  7,063
  8,953
  11,025
  13,354
  15,939
  18,780
  21,871
  25,208
  28,786
  32,599
  36,641
  40,907
  45,394
  50,097
  55,016
  60,150
  65,500
  71,070
  76,864
  82,887
  89,146
Tax expense, $m
  0
  17
  103
  219
  373
  571
  818
  1,120
  1,482
  1,907
  2,417
  2,977
  3,606
  4,304
  5,070
  5,905
  6,806
  7,772
  8,802
  9,893
  11,045
  12,256
  13,526
  14,854
  16,240
  17,685
  19,189
  20,753
  22,379
  24,069
Net income, $m
  -160
  46
  278
  593
  1,009
  1,543
  2,211
  3,028
  4,006
  5,156
  6,535
  8,049
  9,749
  11,636
  13,709
  15,966
  18,402
  21,014
  23,798
  26,748
  29,862
  33,137
  36,571
  40,162
  43,909
  47,815
  51,881
  56,111
  60,507
  65,077

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
  9,221
  14,246
  21,304
  30,912
  43,612
  59,956
  80,479
  105,674
  135,977
  171,750
  213,274
  260,748
  314,290
  373,943
  439,690
  511,465
  589,165
  672,664
  761,827
  856,520
  956,619
  1,062,019
  1,172,642
  1,288,436
  1,409,383
  1,535,501
  1,666,841
  1,803,493
  1,945,579
  2,093,260
Adjusted assets (=assets-cash), $m
  9,221
  14,246
  21,304
  30,912
  43,612
  59,956
  80,479
  105,674
  135,977
  171,750
  213,274
  260,748
  314,290
  373,943
  439,690
  511,465
  589,165
  672,664
  761,827
  856,520
  956,619
  1,062,019
  1,172,642
  1,288,436
  1,409,383
  1,535,501
  1,666,841
  1,803,493
  1,945,579
  2,093,260
Revenue / Adjusted assets
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
Average production assets, $m
  6,754
  10,435
  15,606
  22,643
  31,947
  43,919
  58,952
  77,408
  99,606
  125,810
  156,228
  191,003
  230,223
  273,920
  322,081
  374,658
  431,574
  492,739
  558,053
  627,417
  700,741
  777,949
  858,982
  943,803
  1,032,400
  1,124,783
  1,220,993
  1,321,093
  1,425,174
  1,533,353
Working capital, $m
  -400
  -618
  -924
  -1,340
  -1,891
  -2,599
  -3,489
  -4,581
  -5,895
  -7,446
  -9,246
  -11,304
  -13,626
  -16,212
  -19,062
  -22,174
  -25,543
  -29,163
  -33,028
  -37,134
  -41,473
  -46,043
  -50,839
  -55,859
  -61,102
  -66,570
  -72,264
  -78,189
  -84,349
  -90,751
Total debt, $m
  1,930
  3,478
  5,652
  8,611
  12,522
  17,557
  23,877
  31,638
  40,971
  51,989
  64,778
  79,400
  95,891
  114,264
  134,514
  156,621
  180,553
  206,270
  233,733
  262,898
  293,728
  326,192
  360,264
  395,928
  433,180
  472,024
  512,477
  554,566
  598,328
  643,814
Total liabilities, $m
  2,840
  4,388
  6,562
  9,521
  13,432
  18,467
  24,788
  32,548
  41,881
  52,899
  65,689
  80,311
  96,801
  115,174
  135,425
  157,531
  181,463
  207,180
  234,643
  263,808
  294,639
  327,102
  361,174
  396,838
  434,090
  472,934
  513,387
  555,476
  599,238
  644,724
Total equity, $m
  6,381
  9,858
  14,743
  21,391
  30,180
  41,490
  55,692
  73,127
  94,096
  118,851
  147,586
  180,438
  217,488
  258,768
  304,265
  353,934
  407,702
  465,483
  527,184
  592,712
  661,980
  734,917
  811,468
  891,597
  975,293
  1,062,566
  1,153,454
  1,248,017
  1,346,341
  1,448,536
Total liabilities and equity, $m
  9,221
  14,246
  21,305
  30,912
  43,612
  59,957
  80,480
  105,675
  135,977
  171,750
  213,275
  260,749
  314,289
  373,942
  439,690
  511,465
  589,165
  672,663
  761,827
  856,520
  956,619
  1,062,019
  1,172,642
  1,288,435
  1,409,383
  1,535,500
  1,666,841
  1,803,493
  1,945,579
  2,093,260
Debt-to-equity ratio
  0.300
  0.350
  0.380
  0.400
  0.410
  0.420
  0.430
  0.430
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
Adjusted equity ratio
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -160
  46
  278
  593
  1,009
  1,543
  2,211
  3,028
  4,006
  5,156
  6,535
  8,049
  9,749
  11,636
  13,709
  15,966
  18,402
  21,014
  23,798
  26,748
  29,862
  33,137
  36,571
  40,162
  43,909
  47,815
  51,881
  56,111
  60,507
  65,077
Depreciation, amort., depletion, $m
  744
  1,112
  1,629
  2,333
  3,263
  4,461
  5,964
  7,810
  10,029
  12,650
  15,623
  19,100
  23,022
  27,392
  32,208
  37,466
  43,157
  49,274
  55,805
  62,742
  70,074
  77,795
  85,898
  94,380
  103,240
  112,478
  122,099
  132,109
  142,517
  153,335
Funds from operations, $m
  584
  1,159
  1,907
  2,926
  4,272
  6,004
  8,175
  10,838
  14,036
  17,806
  22,158
  27,149
  32,771
  39,028
  45,917
  53,431
  61,560
  70,288
  79,603
  89,490
  99,937
  110,932
  122,469
  134,542
  147,149
  160,294
  173,981
  188,220
  203,025
  218,412
Change in working capital, $m
  -150
  -218
  -306
  -417
  -551
  -709
  -890
  -1,092
  -1,314
  -1,551
  -1,800
  -2,058
  -2,321
  -2,586
  -2,850
  -3,112
  -3,369
  -3,620
  -3,866
  -4,105
  -4,340
  -4,570
  -4,796
  -5,020
  -5,244
  -5,468
  -5,694
  -5,924
  -6,160
  -6,403
Cash from operations, $m
  734
  1,377
  2,213
  3,342
  4,823
  6,712
  9,065
  11,930
  15,349
  19,357
  23,958
  29,207
  35,092
  41,614
  48,768
  56,543
  64,928
  73,908
  83,468
  93,595
  104,276
  115,502
  127,265
  139,562
  152,393
  165,761
  179,675
  194,144
  209,185
  224,814
Maintenance CAPEX, $m
  -422
  -675
  -1,044
  -1,561
  -2,264
  -3,195
  -4,392
  -5,895
  -7,741
  -9,961
  -12,581
  -15,623
  -19,100
  -23,022
  -27,392
  -32,208
  -37,466
  -43,157
  -49,274
  -55,805
  -62,742
  -70,074
  -77,795
  -85,898
  -94,380
  -103,240
  -112,478
  -122,099
  -132,109
  -142,517
New CAPEX, $m
  -2,534
  -3,681
  -5,171
  -7,038
  -9,303
  -11,973
  -15,033
  -18,456
  -22,197
  -26,204
  -30,417
  -34,776
  -39,220
  -43,697
  -48,161
  -52,577
  -56,917
  -61,165
  -65,314
  -69,364
  -73,324
  -77,208
  -81,033
  -84,821
  -88,596
  -92,384
  -96,209
  -100,100
  -104,081
  -108,179
Cash from investing activities, $m
  -2,956
  -4,356
  -6,215
  -8,599
  -11,567
  -15,168
  -19,425
  -24,351
  -29,938
  -36,165
  -42,998
  -50,399
  -58,320
  -66,719
  -75,553
  -84,785
  -94,383
  -104,322
  -114,588
  -125,169
  -136,066
  -147,282
  -158,828
  -170,719
  -182,976
  -195,624
  -208,687
  -222,199
  -236,190
  -250,696
Free cash flow, $m
  -2,223
  -2,980
  -4,001
  -5,256
  -6,745
  -8,455
  -10,360
  -12,421
  -14,589
  -16,808
  -19,040
  -21,191
  -23,228
  -25,105
  -26,786
  -28,241
  -29,454
  -30,414
  -31,119
  -31,574
  -31,790
  -31,780
  -31,563
  -31,157
  -30,584
  -29,862
  -29,013
  -28,055
  -27,006
  -25,882
Issuance/(repayment) of debt, $m
  1,063
  1,548
  2,174
  2,959
  3,912
  5,034
  6,321
  7,760
  9,333
  11,018
  12,790
  14,622
  16,491
  18,373
  20,250
  22,107
  23,932
  25,718
  27,462
  29,165
  30,830
  32,463
  34,072
  35,665
  37,252
  38,844
  40,453
  42,089
  43,763
  45,486
Issuance/(repurchase) of shares, $m
  2,559
  3,431
  4,607
  6,056
  7,780
  9,767
  11,991
  14,407
  16,963
  19,599
  22,200
  24,803
  27,302
  29,644
  31,788
  33,703
  35,366
  36,767
  37,903
  38,779
  39,406
  39,800
  39,980
  39,968
  39,786
  39,458
  39,006
  38,452
  37,817
  37,118
Cash from financing (excl. dividends), $m  
  3,622
  4,979
  6,781
  9,015
  11,692
  14,801
  18,312
  22,167
  26,296
  30,617
  34,990
  39,425
  43,793
  48,017
  52,038
  55,810
  59,298
  62,485
  65,365
  67,944
  70,236
  72,263
  74,052
  75,633
  77,038
  78,302
  79,459
  80,541
  81,580
  82,604
Total cash flow (excl. dividends), $m
  1,399
  1,999
  2,780
  3,759
  4,947
  6,346
  7,951
  9,746
  11,708
  13,809
  15,949
  18,234
  20,564
  22,912
  25,253
  27,568
  29,843
  32,071
  34,246
  36,370
  38,447
  40,483
  42,489
  44,475
  46,454
  48,440
  50,446
  52,486
  54,574
  56,722
Retained Cash Flow (-), $m
  -2,559
  -3,477
  -4,885
  -6,648
  -8,789
  -11,310
  -14,202
  -17,435
  -20,970
  -24,755
  -28,735
  -32,852
  -37,050
  -41,280
  -45,497
  -49,668
  -53,768
  -57,781
  -61,701
  -65,527
  -69,269
  -72,937
  -76,551
  -80,129
  -83,696
  -87,273
  -90,888
  -94,563
  -98,324
  -102,195
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
  45
  72
  111
  166
  240
  339
  466
  625
  821
  1,057
  1,335
  1,657
  2,026
  2,442
  2,906
  3,417
  3,975
  4,578
  5,227
  5,920
  6,656
  7,434
  8,253
  9,113
  10,012
  10,952
  11,932
  12,953
  14,015
  15,119
Cash available for distribution, $m
  -1,159
  -1,479
  -2,105
  -2,890
  -3,842
  -4,964
  -6,250
  -7,689
  -9,262
  -10,946
  -12,786
  -14,618
  -16,486
  -18,368
  -20,245
  -22,100
  -23,925
  -25,710
  -27,454
  -29,157
  -30,822
  -32,454
  -34,062
  -35,654
  -37,241
  -38,833
  -40,441
  -42,077
  -43,750
  -45,473
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -1,112
  -1,354
  -1,832
  -2,379
  -2,978
  -3,603
  -4,223
  -4,806
  -5,320
  -5,739
  -6,072
  -6,238
  -6,268
  -6,166
  -5,943
  -5,616
  -5,206
  -4,735
  -4,227
  -3,705
  -3,188
  -2,693
  -2,232
  -1,816
  -1,449
  -1,133
  -868
  -651
  -478
  -342
Current shareholders' claim on cash, %
  56.7
  34.6
  22.2
  14.9
  10.4
  7.5
  5.6
  4.3
  3.4
  2.7
  2.2
  1.8
  1.6
  1.3
  1.2
  1.0
  0.9
  0.8
  0.8
  0.7
  0.6
  0.6
  0.6
  0.5
  0.5
  0.5
  0.5
  0.4
  0.4
  0.4

Patterson-UTI Energy, Inc. is an oilfield services company. The Company owns and operates a fleet of land-based drilling rigs and a fleet of pressure pumping equipment in the United States. The Company's segments include Contract Drilling, Pressure Pumping and Other operations. The Contract Drilling segment markets its contract drilling services to independent and other oil and natural gas operators. As of December 31, 2016, the Company had 202 marketed land-based drilling rigs. The Pressure Pumping segment provides pressure pumping services to oil and natural gas operators primarily in Texas (Southwest Region) and the Appalachian region (Northeast Region). The Other operations segment includes the Company's pipe handling components and related technology business, the oil and natural gas working interests and the Middle East/North Africa business. In addition, the Company owns and invests in oil and natural gas assets as a non-operating working interest owner in Texas and New Mexico.

FINANCIAL RATIOS  of  Patterson-UTI Energy (PTEN)

Valuation Ratios
P/E Ratio -7.8
Price to Sales 2.7
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 8.2
Price to Free Cash Flow 13.5
Growth Rates
Sales Growth Rate -51.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -83.9%
Cap. Spend. - 3 Yr. Gr. Rate -28.9%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 26.6%
Total Debt to Equity 26.6%
Interest Coverage -12
Management Effectiveness
Return On Assets -7.1%
Ret/ On Assets - 3 Yr. Avg. -3%
Return On Total Capital -10.2%
Ret/ On T. Cap. - 3 Yr. Avg. -4.6%
Return On Equity -13.3%
Return On Equity - 3 Yr. Avg. -6.1%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 29.1%
Gross Margin - 3 Yr. Avg. 32.5%
EBITDA Margin 22.8%
EBITDA Margin - 3 Yr. Avg. 26.1%
Operating Margin -49.8%
Oper. Margin - 3 Yr. Avg. -20.8%
Pre-Tax Margin -54.1%
Pre-Tax Margin - 3 Yr. Avg. -23.2%
Net Profit Margin -34.8%
Net Profit Margin - 3 Yr. Avg. -15.1%
Effective Tax Rate 35.7%
Eff/ Tax Rate - 3 Yr. Avg. 35%
Payout Ratio -7.5%

PTEN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PTEN stock intrinsic value calculation we used $2357 million for the last fiscal year's total revenue generated by Patterson-UTI Energy. The default revenue input number comes from 2017 income statement of Patterson-UTI 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 PTEN 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 4.3%, whose default value for PTEN is calculated based on our internal credit rating of Patterson-UTI 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 Patterson-UTI 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 PTEN stock the variable cost ratio is equal to 88.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $572 million in the base year in the intrinsic value calculation for PTEN 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 Patterson-UTI Energy.

Corporate tax rate of 27% is the nominal tax rate for Patterson-UTI 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 PTEN stock is equal to 1.9%.

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 PTEN are equal to 179.1%.

Life of production assets of 10 years is the average useful life of capital assets used in Patterson-UTI 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 PTEN is equal to -10.6%. 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 - $3982 million for Patterson-UTI 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 198 million for Patterson-UTI 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 Patterson-UTI Energy at the current share price and the inputted number of shares is $3.3 billion.

RELATED COMPANIES Price Int.Val. Rating
HP Helmerich&Payn 59.40 9.32  str.sell
NBR Nabors Industr 5.91 2.44  str.sell
PES Pioneer Energy 5.10 28.43  str.buy
PDS Precision Dril 3.65 1.06  str.sell
PKD Parker Drillin 0.300 0.52  hold

COMPANY NEWS

▶ Patterson-UTI Reports Drilling Activity for June 2018   [Jul-05-18 06:00AM  PR Newswire]
▶ Shareholders vote against exec compensation plan at Houston oil field service co.   [Jun-20-18 09:35AM  American City Business Journals]
▶ Patterson-UTI Reports Drilling Activity for May 2018   [Jun-05-18 06:00AM  PR Newswire]
▶ Patterson-UTI Reports Drilling Activity for April 2018   [May-03-18 06:00AM  PR Newswire]
▶ Patterson-UTI Energy, Inc. to Host Earnings Call   [Apr-26-18 08:20AM  ACCESSWIRE]
▶ Patterson-UTI: 1Q Earnings Snapshot   [06:46AM  Associated Press]
▶ Three more Houston energy companies report CEO, median employee pay   [Apr-25-18 03:56PM  American City Business Journals]
▶ Edited Transcript of PTEN presentation 7-Mar-17 1:40pm GMT   [Apr-10-18 03:18PM  Thomson Reuters StreetEvents]
▶ Patterson-UTI Reports Drilling Activity for March 2018   [Apr-04-18 06:00AM  PR Newswire]
▶ 3rd lawsuit filed over fatal Oklahoma gas rig explosion   [Mar-15-18 10:10AM  Associated Press]
▶ Why Patterson-UTI Energy, Inc.'s Stock Is Plunging Today   [Feb-08-18 04:08PM  Motley Fool]
▶ Patterson-UTI misses 4Q profit forecasts   [06:57AM  Associated Press]
▶ Patterson-UTI Reports Drilling Activity for January 2018   [Feb-05-18 06:00AM  PR Newswire]
▶ [$$] Oklahoma Drilling Accident is Deadliest Since Start of Shale Boom   [Jan-24-18 12:06AM  The Wall Street Journal]
▶ [$$] Oklahoma Drilling Accident is Deadliest Since Start of Shale Boom   [Jan-23-18 05:34PM  The Wall Street Journal]
▶ The Latest: Fire out at drilling rig hours after explosion   [Jan-22-18 09:04PM  Associated Press]
▶ What Wall Street Expects from Weatherfords 4Q17 Earnings   [Jan-18-18 04:09PM  Market Realist]
▶ How Schlumberger Reacted to Crude Oil Prices Last Week   [Jan-16-18 10:32AM  Market Realist]
▶ How Weatherford Reacted to Crude Oil Price Changes   [Jan-09-18 10:33AM  Market Realist]
▶ What 2018 May Mean For The Oil & Gas Industry   [Dec-29-17 07:29PM  Forbes]
▶ At $22.95, Is Patterson-UTI Energy Inc (NASDAQ:PTEN) A Buy?   [Dec-28-17 02:35PM  Simply Wall St.]
▶ How Did Schlumberger React to Crude Oil Prices Last Week?   [Dec-26-17 12:55PM  Market Realist]
▶ Halliburton Reacted to Crude Oil Prices on December 8   [Dec-12-17 07:32AM  Market Realist]
▶ Patterson-UTI Energys Dividend Yield   [07:30AM  Market Realist]
▶ Patterson-UTI Energys Relative Valuation versus Its Peers   [Nov-16-17 03:20PM  Market Realist]
▶ Analyzing Patterson-UTI Energys Strategy   [12:19PM  Market Realist]
▶ Patterson-UTI Energys Net Debt after 3Q17   [09:01AM  Market Realist]
▶ Analyzing Patterson-UTI Energys Drivers in 3Q17   [Nov-15-17 03:05PM  Market Realist]
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.