Intrinsic value of Patterson-UTI Energy - PTEN

Previous Close

$18.87

  Intrinsic Value

$2.57

stock screener

  Rating & Target

str. sell

-86%

Previous close

$18.87

 
Intrinsic value

$2.57

 
Up/down potential

-86%

 
Rating

str. sell

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

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.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Patterson-UTI Energy (PTEN) 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, %
  -51.56
  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
  916
  1,466
  2,264
  3,386
  4,913
  6,932
  9,530
  12,792
  16,797
  21,613
  27,300
  33,900
  41,446
  49,956
  59,438
  69,889
  81,297
  93,647
  106,920
  121,092
  136,143
  152,054
  168,807
  186,391
  204,796
  224,021
  244,067
  264,944
  286,664
  309,249
  332,723
Variable operating expenses, $m
 
  1,392
  2,151
  3,217
  4,668
  6,586
  9,054
  12,153
  15,957
  20,533
  25,935
  32,205
  39,374
  47,458
  56,466
  66,394
  77,232
  88,965
  101,574
  115,037
  129,336
  144,451
  160,367
  177,071
  194,556
  212,820
  231,864
  251,696
  272,331
  293,786
  316,087
Fixed operating expenses, $m
 
  528
  541
  555
  568
  583
  597
  612
  627
  643
  659
  676
  693
  710
  728
  746
  765
  784
  803
  823
  844
  865
  887
  909
  931
  955
  979
  1,003
  1,028
  1,054
  1,080
Total operating expenses, $m
  1,372
  1,920
  2,692
  3,772
  5,236
  7,169
  9,651
  12,765
  16,584
  21,176
  26,594
  32,881
  40,067
  48,168
  57,194
  67,140
  77,997
  89,749
  102,377
  115,860
  130,180
  145,316
  161,254
  177,980
  195,487
  213,775
  232,843
  252,699
  273,359
  294,840
  317,167
Operating income, $m
  -456
  -455
  -428
  -385
  -323
  -236
  -121
  27
  212
  438
  706
  1,019
  1,380
  1,788
  2,244
  2,749
  3,300
  3,899
  4,543
  5,231
  5,963
  6,738
  7,554
  8,411
  9,308
  10,246
  11,225
  12,244
  13,305
  14,409
  15,556
EBITDA, $m
  212
  606
  1,211
  2,066
  3,233
  4,781
  6,777
  9,286
  12,369
  16,080
  20,464
  25,554
  31,376
  37,944
  45,262
  53,330
  62,139
  71,676
  81,926
  92,872
  104,497
  116,787
  129,728
  143,311
  157,530
  172,381
  187,868
  203,997
  220,778
  238,227
  256,364
Interest expense (income), $m
  37
  30
  77
  145
  240
  370
  542
  762
  1,039
  1,379
  1,788
  2,271
  2,832
  3,473
  4,196
  5,001
  5,888
  6,857
  7,906
  9,034
  10,237
  11,516
  12,867
  14,290
  15,783
  17,346
  18,979
  20,682
  22,455
  24,299
  26,218
Earnings before tax, $m
  -496
  -485
  -505
  -530
  -563
  -606
  -662
  -735
  -827
  -942
  -1,083
  -1,252
  -1,452
  -1,685
  -1,951
  -2,252
  -2,588
  -2,959
  -3,364
  -3,802
  -4,274
  -4,778
  -5,313
  -5,879
  -6,475
  -7,100
  -7,754
  -8,438
  -9,150
  -9,891
  -10,662
Tax expense, $m
  -177
  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
Net income, $m
  -319
  -485
  -505
  -530
  -563
  -606
  -662
  -735
  -827
  -942
  -1,083
  -1,252
  -1,452
  -1,685
  -1,951
  -2,252
  -2,588
  -2,959
  -3,364
  -3,802
  -4,274
  -4,778
  -5,313
  -5,879
  -6,475
  -7,100
  -7,754
  -8,438
  -9,150
  -9,891
  -10,662

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  35
  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
  3,772
  5,982
  9,242
  13,822
  20,055
  28,294
  38,898
  52,213
  68,559
  88,218
  111,427
  138,367
  169,167
  203,903
  242,604
  285,259
  331,825
  382,235
  436,407
  494,253
  555,687
  620,629
  689,010
  760,779
  835,903
  914,370
  996,192
  1,081,402
  1,170,058
  1,262,240
  1,358,052
Adjusted assets (=assets-cash), $m
  3,737
  5,982
  9,242
  13,822
  20,055
  28,294
  38,898
  52,213
  68,559
  88,218
  111,427
  138,367
  169,167
  203,903
  242,604
  285,259
  331,825
  382,235
  436,407
  494,253
  555,687
  620,629
  689,010
  760,779
  835,903
  914,370
  996,192
  1,081,402
  1,170,058
  1,262,240
  1,358,052
Revenue / Adjusted assets
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
Average production assets, $m
  3,713
  5,940
  9,177
  13,725
  19,914
  28,096
  38,625
  51,846
  68,078
  87,599
  110,645
  137,396
  167,980
  202,472
  240,902
  283,258
  329,497
  379,553
  433,345
  490,786
  551,789
  616,275
  684,177
  755,442
  830,039
  907,956
  989,204
  1,073,816
  1,161,850
  1,253,386
  1,348,525
Working capital, $m
  -18
  -85
  -131
  -196
  -285
  -402
  -553
  -742
  -974
  -1,254
  -1,583
  -1,966
  -2,404
  -2,897
  -3,447
  -4,054
  -4,715
  -5,432
  -6,201
  -7,023
  -7,896
  -8,819
  -9,791
  -10,811
  -11,878
  -12,993
  -14,156
  -15,367
  -16,627
  -17,936
  -19,298
Total debt, $m
  598
  1,516
  2,846
  4,714
  7,257
  10,619
  14,945
  20,378
  27,047
  35,068
  44,537
  55,529
  68,095
  82,267
  98,057
  115,461
  134,460
  155,027
  177,129
  200,730
  225,795
  252,292
  280,191
  309,473
  340,123
  372,138
  405,521
  440,287
  476,459
  514,069
  553,160
Total liabilities, $m
  1,524
  2,441
  3,771
  5,639
  8,182
  11,544
  15,870
  21,303
  27,972
  35,993
  45,462
  56,454
  69,020
  83,192
  98,982
  116,386
  135,385
  155,952
  178,054
  201,655
  226,720
  253,217
  281,116
  310,398
  341,048
  373,063
  406,446
  441,212
  477,384
  514,994
  554,085
Total equity, $m
  2,249
  3,541
  5,471
  8,182
  11,872
  16,750
  23,028
  30,910
  40,587
  52,225
  65,965
  81,913
  100,147
  120,710
  143,622
  168,873
  196,440
  226,283
  258,353
  292,598
  328,967
  367,412
  407,894
  450,381
  494,854
  541,307
  589,746
  640,190
  692,675
  747,246
  803,967
Total liabilities and equity, $m
  3,773
  5,982
  9,242
  13,821
  20,054
  28,294
  38,898
  52,213
  68,559
  88,218
  111,427
  138,367
  169,167
  203,902
  242,604
  285,259
  331,825
  382,235
  436,407
  494,253
  555,687
  620,629
  689,010
  760,779
  835,902
  914,370
  996,192
  1,081,402
  1,170,059
  1,262,240
  1,358,052
Debt-to-equity ratio
  0.266
  0.430
  0.520
  0.580
  0.610
  0.630
  0.650
  0.660
  0.670
  0.670
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
Adjusted equity ratio
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -319
  -485
  -505
  -530
  -563
  -606
  -662
  -735
  -827
  -942
  -1,083
  -1,252
  -1,452
  -1,685
  -1,951
  -2,252
  -2,588
  -2,959
  -3,364
  -3,802
  -4,274
  -4,778
  -5,313
  -5,879
  -6,475
  -7,100
  -7,754
  -8,438
  -9,150
  -9,891
  -10,662
Depreciation, amort., depletion, $m
  668
  1,061
  1,639
  2,451
  3,556
  5,017
  6,897
  9,258
  12,157
  15,643
  19,758
  24,535
  29,996
  36,156
  43,018
  50,582
  58,839
  67,777
  77,383
  87,640
  98,534
  110,049
  122,174
  134,900
  148,221
  162,135
  176,644
  191,753
  207,473
  223,819
  240,808
Funds from operations, $m
  401
  576
  1,134
  1,920
  2,993
  4,411
  6,235
  8,524
  11,330
  14,701
  18,675
  23,283
  28,544
  34,471
  41,067
  48,329
  56,251
  64,819
  74,019
  83,838
  94,260
  105,271
  116,861
  129,021
  141,746
  155,035
  168,889
  183,315
  198,324
  213,928
  230,146
Change in working capital, $m
  96
  -32
  -46
  -65
  -89
  -117
  -151
  -189
  -232
  -279
  -330
  -383
  -438
  -494
  -550
  -606
  -662
  -716
  -770
  -822
  -873
  -923
  -972
  -1,020
  -1,068
  -1,115
  -1,163
  -1,211
  -1,260
  -1,310
  -1,361
Cash from operations, $m
  305
  608
  1,180
  1,986
  3,081
  4,528
  6,386
  8,713
  11,562
  14,980
  19,005
  23,666
  28,982
  34,964
  41,617
  48,936
  56,912
  65,535
  74,789
  84,660
  95,133
  106,194
  117,833
  130,041
  142,814
  156,150
  170,052
  184,526
  199,583
  215,238
  231,508
Maintenance CAPEX, $m
  0
  -663
  -1,061
  -1,639
  -2,451
  -3,556
  -5,017
  -6,897
  -9,258
  -12,157
  -15,643
  -19,758
  -24,535
  -29,996
  -36,156
  -43,018
  -50,582
  -58,839
  -67,777
  -77,383
  -87,640
  -98,534
  -110,049
  -122,174
  -134,900
  -148,221
  -162,135
  -176,644
  -191,753
  -207,473
  -223,819
New CAPEX, $m
  -120
  -2,228
  -3,237
  -4,547
  -6,189
  -8,182
  -10,529
  -13,221
  -16,231
  -19,522
  -23,046
  -26,751
  -30,584
  -34,492
  -38,430
  -42,356
  -46,239
  -50,056
  -53,792
  -57,441
  -61,003
  -64,486
  -67,901
  -71,265
  -74,597
  -77,917
  -81,248
  -84,612
  -88,034
  -91,535
  -95,139
Cash from investing activities, $m
  -98
  -2,891
  -4,298
  -6,186
  -8,640
  -11,738
  -15,546
  -20,118
  -25,489
  -31,679
  -38,689
  -46,509
  -55,119
  -64,488
  -74,586
  -85,374
  -96,821
  -108,895
  -121,569
  -134,824
  -148,643
  -163,020
  -177,950
  -193,439
  -209,497
  -226,138
  -243,383
  -261,256
  -279,787
  -299,008
  -318,958
Free cash flow, $m
  207
  -2,283
  -3,118
  -4,201
  -5,559
  -7,210
  -9,161
  -11,406
  -13,927
  -16,698
  -19,683
  -22,843
  -26,137
  -29,524
  -32,969
  -36,439
  -39,909
  -43,360
  -46,780
  -50,164
  -53,511
  -56,826
  -60,118
  -63,399
  -66,683
  -69,988
  -73,331
  -76,730
  -80,203
  -83,771
  -87,450
Issuance/(repayment) of debt, $m
  -255
  918
  1,330
  1,868
  2,543
  3,362
  4,326
  5,432
  6,669
  8,021
  9,469
  10,992
  12,566
  14,172
  15,790
  17,403
  18,999
  20,567
  22,102
  23,601
  25,065
  26,496
  27,900
  29,282
  30,651
  32,015
  33,383
  34,766
  36,172
  37,610
  39,091
Issuance/(repurchase) of shares, $m
  -3
  1,812
  2,435
  3,242
  4,253
  5,484
  6,940
  8,617
  10,504
  12,580
  14,822
  17,201
  19,686
  22,249
  24,863
  27,504
  30,155
  32,801
  35,433
  38,047
  40,643
  43,223
  45,795
  48,366
  50,948
  53,553
  56,193
  58,882
  61,634
  64,463
  67,382
Cash from financing (excl. dividends), $m  
  -261
  2,730
  3,765
  5,110
  6,796
  8,846
  11,266
  14,049
  17,173
  20,601
  24,291
  28,193
  32,252
  36,421
  40,653
  44,907
  49,154
  53,368
  57,535
  61,648
  65,708
  69,719
  73,695
  77,648
  81,599
  85,568
  89,576
  93,648
  97,806
  102,073
  106,473
Total cash flow (excl. dividends), $m
  -54
  447
  647
  909
  1,238
  1,636
  2,105
  2,644
  3,245
  3,903
  4,608
  5,349
  6,115
  6,897
  7,684
  8,469
  9,245
  10,009
  10,756
  11,485
  12,197
  12,894
  13,577
  14,249
  14,915
  15,579
  16,245
  16,918
  17,602
  18,302
  19,023
Retained Cash Flow (-), $m
  312
  -1,812
  -2,435
  -3,242
  -4,253
  -5,484
  -6,940
  -8,617
  -10,504
  -12,580
  -14,822
  -17,201
  -19,686
  -22,249
  -24,863
  -27,504
  -30,155
  -32,801
  -35,433
  -38,047
  -40,643
  -43,223
  -45,795
  -48,366
  -50,948
  -53,553
  -56,193
  -58,882
  -61,634
  -64,463
  -67,382
Prev. year cash balance distribution, $m
 
  35
  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
 
  -1,330
  -1,788
  -2,332
  -3,016
  -3,848
  -4,834
  -5,973
  -7,258
  -8,677
  -10,214
  -11,852
  -13,571
  -15,352
  -17,179
  -19,035
  -20,910
  -22,793
  -24,678
  -26,562
  -28,446
  -30,330
  -32,218
  -34,117
  -36,033
  -37,974
  -39,948
  -41,964
  -44,032
  -46,160
  -48,359
Discount rate, %
 
  5.00
  5.25
  5.51
  5.79
  6.08
  6.38
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.13
  16.93
  17.78
  18.67
  19.60
  20.58
PV of cash for distribution, $m
 
  -1,267
  -1,614
  -1,985
  -2,408
  -2,865
  -3,335
  -3,794
  -4,213
  -4,569
  -4,839
  -5,009
  -5,069
  -5,020
  -4,866
  -4,620
  -4,297
  -3,917
  -3,501
  -3,067
  -2,634
  -2,217
  -1,828
  -1,477
  -1,168
  -904
  -684
  -506
  -365
  -257
  -176
Current shareholders' claim on cash, %
  100
  69.2
  50.3
  38.1
  29.7
  23.7
  19.4
  16.1
  13.6
  11.6
  10.1
  8.8
  7.8
  6.9
  6.2
  5.7
  5.2
  4.7
  4.4
  4.0
  3.8
  3.5
  3.3
  3.1
  2.9
  2.7
  2.6
  2.5
  2.3
  2.2
  2.1

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 -8.8
Price to Sales 3.1
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 9.2
Price to Free Cash Flow 15.1
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 $916 million for the last fiscal year's total revenue generated by Patterson-UTI Energy. The default revenue input number comes from 2016 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 5%, 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 95%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $515 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 5.1% 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 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 PTEN are equal to 405.3%.

Life of production assets of 5.6 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 -5.8%. 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 - $2249 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 219.035 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 $4.1 billion.

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COMPANY NEWS

▶ 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]
▶ Patterson-UTI Energys Stock Price Is Bearish   [12:01PM  Market Realist]
▶ Why Superior Energy Services 3Q17 Earnings Missed Estimates   [Nov-06-17 10:32AM  Market Realist]
▶ Patterson-UTI Reports Drilling Activity for October 2017   [Nov-03-17 06:00AM  PR Newswire]
▶ Patterson UTI-Energy: Analysts Forecasts after 3Q17   [Oct-27-17 04:28PM  Market Realist]
▶ Patterson-UTI reports 3Q loss   [06:36AM  Associated Press]
▶ How Did Weatherford React to Crude Oil Price Changes?   [Oct-23-17 01:06PM  Market Realist]
▶ What Do Analysts Expect from Weatherfords 3Q17 Earnings?   [Oct-12-17 12:05PM  Market Realist]
▶ Patterson-UTI Energys Reaction to Crude Oil Changes   [Oct-11-17 10:39AM  Market Realist]
▶ Patterson-UTI Energys Earnings Drivers in 2Q17   [Oct-10-17 05:36PM  Market Realist]
Financial statements of PTEN
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