Intrinsic value of Quintana Energy Services - QES

Previous Close

$6.19

  Intrinsic Value

$430.85

stock screener

  Rating & Target

str. buy

+999%

Previous close

$6.19

 
Intrinsic value

$430.85

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of QES stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.2

 

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
  701
  1,083
  1,619
  2,350
  3,315
  4,557
  6,117
  8,032
  10,336
  13,055
  16,211
  19,819
  23,889
  28,423
  33,421
  38,876
  44,782
  51,129
  57,906
  65,104
  72,713
  80,724
  89,132
  97,934
  107,127
  116,713
  126,697
  137,083
  147,883
  159,109
Variable operating expenses, $m
  280
  432
  645
  935
  1,319
  1,813
  2,433
  3,194
  4,110
  5,191
  6,444
  7,879
  9,497
  11,299
  13,286
  15,454
  17,802
  20,325
  23,019
  25,881
  28,905
  32,090
  35,433
  38,931
  42,586
  46,397
  50,365
  54,494
  58,788
  63,250
Fixed operating expenses, $m
  285
  291
  298
  304
  311
  318
  325
  332
  339
  347
  354
  362
  370
  378
  387
  395
  404
  413
  422
  431
  441
  450
  460
  470
  481
  491
  502
  513
  524
  536
Total operating expenses, $m
  565
  723
  943
  1,239
  1,630
  2,131
  2,758
  3,526
  4,449
  5,538
  6,798
  8,241
  9,867
  11,677
  13,673
  15,849
  18,206
  20,738
  23,441
  26,312
  29,346
  32,540
  35,893
  39,401
  43,067
  46,888
  50,867
  55,007
  59,312
  63,786
Operating income, $m
  136
  360
  677
  1,110
  1,685
  2,427
  3,359
  4,506
  5,886
  7,517
  9,412
  11,578
  14,022
  16,746
  19,748
  23,027
  26,576
  30,391
  34,465
  38,792
  43,367
  48,184
  53,240
  58,532
  64,061
  69,825
  75,829
  82,076
  88,571
  95,323
EBITDA, $m
  184
  433
  785
  1,267
  1,906
  2,730
  3,767
  5,041
  6,574
  8,385
  10,489
  12,894
  15,609
  18,633
  21,968
  25,608
  29,550
  33,786
  38,310
  43,115
  48,195
  53,544
  59,158
  65,035
  71,174
  77,575
  84,242
  91,178
  98,391
  105,887
Interest expense (income), $m
  0
  11
  22
  37
  59
  89
  128
  178
  241
  319
  412
  522
  650
  796
  961
  1,145
  1,347
  1,568
  1,807
  2,064
  2,339
  2,630
  2,938
  3,263
  3,603
  3,960
  4,332
  4,720
  5,125
  5,545
  5,983
Earnings before tax, $m
  125
  338
  639
  1,051
  1,596
  2,299
  3,181
  4,265
  5,568
  7,105
  8,890
  10,928
  13,226
  15,785
  18,604
  21,680
  25,008
  28,584
  32,401
  36,454
  40,736
  45,245
  49,977
  54,929
  60,101
  65,493
  71,109
  76,951
  83,026
  89,340
Tax expense, $m
  34
  91
  173
  284
  431
  621
  859
  1,152
  1,503
  1,918
  2,400
  2,951
  3,571
  4,262
  5,023
  5,854
  6,752
  7,718
  8,748
  9,842
  10,999
  12,216
  13,494
  14,831
  16,227
  17,683
  19,199
  20,777
  22,417
  24,122
Net income, $m
  91
  247
  467
  767
  1,165
  1,678
  2,322
  3,113
  4,064
  5,187
  6,490
  7,978
  9,655
  11,523
  13,581
  15,826
  18,256
  20,866
  23,653
  26,611
  29,738
  33,029
  36,483
  40,098
  43,873
  47,810
  51,909
  56,174
  60,609
  65,218

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
  441
  681
  1,019
  1,479
  2,086
  2,868
  3,850
  5,055
  6,504
  8,216
  10,202
  12,473
  15,034
  17,888
  21,033
  24,466
  28,183
  32,177
  36,442
  40,972
  45,760
  50,802
  56,093
  61,632
  67,418
  73,451
  79,734
  86,270
  93,067
  100,131
Adjusted assets (=assets-cash), $m
  441
  681
  1,019
  1,479
  2,086
  2,868
  3,850
  5,055
  6,504
  8,216
  10,202
  12,473
  15,034
  17,888
  21,033
  24,466
  28,183
  32,177
  36,442
  40,972
  45,760
  50,802
  56,093
  61,632
  67,418
  73,451
  79,734
  86,270
  93,067
  100,131
Revenue / Adjusted assets
  1.590
  1.590
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
  1.589
Average production assets, $m
  233
  359
  538
  780
  1,101
  1,513
  2,031
  2,667
  3,431
  4,334
  5,382
  6,580
  7,931
  9,437
  11,096
  12,907
  14,868
  16,975
  19,225
  21,615
  24,141
  26,800
  29,592
  32,514
  35,566
  38,749
  42,063
  45,512
  49,097
  52,824
Working capital, $m
  88
  136
  204
  296
  418
  574
  771
  1,012
  1,302
  1,645
  2,043
  2,497
  3,010
  3,581
  4,211
  4,898
  5,643
  6,442
  7,296
  8,203
  9,162
  10,171
  11,231
  12,340
  13,498
  14,706
  15,964
  17,273
  18,633
  20,048
Total debt, $m
  235
  401
  635
  953
  1,373
  1,914
  2,594
  3,428
  4,431
  5,615
  6,990
  8,561
  10,333
  12,308
  14,484
  16,860
  19,432
  22,196
  25,148
  28,282
  31,596
  35,085
  38,746
  42,579
  46,583
  50,758
  55,105
  59,629
  64,332
  69,221
Total liabilities, $m
  305
  472
  705
  1,023
  1,444
  1,985
  2,664
  3,498
  4,501
  5,685
  7,060
  8,631
  10,404
  12,378
  14,555
  16,930
  19,502
  22,266
  25,218
  28,352
  31,666
  35,155
  38,817
  42,650
  46,653
  50,828
  55,176
  59,699
  64,402
  69,291
Total equity, $m
  136
  210
  314
  455
  643
  883
  1,186
  1,557
  2,003
  2,530
  3,142
  3,842
  4,630
  5,509
  6,478
  7,536
  8,680
  9,910
  11,224
  12,619
  14,094
  15,647
  17,277
  18,983
  20,765
  22,623
  24,558
  26,571
  28,665
  30,840
Total liabilities and equity, $m
  441
  682
  1,019
  1,478
  2,087
  2,868
  3,850
  5,055
  6,504
  8,215
  10,202
  12,473
  15,034
  17,887
  21,033
  24,466
  28,182
  32,176
  36,442
  40,971
  45,760
  50,802
  56,094
  61,633
  67,418
  73,451
  79,734
  86,270
  93,067
  100,131
Debt-to-equity ratio
  1.730
  1.910
  2.020
  2.090
  2.140
  2.170
  2.190
  2.200
  2.210
  2.220
  2.220
  2.230
  2.230
  2.230
  2.240
  2.240
  2.240
  2.240
  2.240
  2.240
  2.240
  2.240
  2.240
  2.240
  2.240
  2.240
  2.240
  2.240
  2.240
  2.240
Adjusted equity ratio
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  91
  247
  467
  767
  1,165
  1,678
  2,322
  3,113
  4,064
  5,187
  6,490
  7,978
  9,655
  11,523
  13,581
  15,826
  18,256
  20,866
  23,653
  26,611
  29,738
  33,029
  36,483
  40,098
  43,873
  47,810
  51,909
  56,174
  60,609
  65,218
Depreciation, amort., depletion, $m
  48
  73
  109
  157
  221
  304
  407
  534
  687
  868
  1,076
  1,316
  1,586
  1,887
  2,219
  2,581
  2,974
  3,395
  3,845
  4,323
  4,828
  5,360
  5,918
  6,503
  7,113
  7,750
  8,413
  9,102
  9,819
  10,565
Funds from operations, $m
  139
  320
  575
  924
  1,387
  1,982
  2,730
  3,648
  4,752
  6,055
  7,566
  9,294
  11,241
  13,410
  15,800
  18,408
  21,230
  24,261
  27,498
  30,934
  34,566
  38,389
  42,401
  46,601
  50,987
  55,560
  60,322
  65,277
  70,428
  75,783
Change in working capital, $m
  33
  48
  68
  92
  122
  157
  197
  241
  290
  343
  398
  455
  513
  571
  630
  687
  744
  800
  854
  907
  959
  1,009
  1,059
  1,109
  1,158
  1,208
  1,258
  1,309
  1,361
  1,414
Cash from operations, $m
  106
  272
  508
  832
  1,265
  1,825
  2,533
  3,406
  4,462
  5,712
  7,168
  8,839
  10,729
  12,839
  15,170
  17,720
  20,485
  23,462
  26,644
  30,027
  33,607
  37,380
  41,342
  45,492
  49,828
  54,352
  59,064
  63,968
  69,068
  74,368
Maintenance CAPEX, $m
  -29
  -47
  -72
  -108
  -156
  -220
  -303
  -406
  -533
  -686
  -867
  -1,076
  -1,316
  -1,586
  -1,887
  -2,219
  -2,581
  -2,974
  -3,395
  -3,845
  -4,323
  -4,828
  -5,360
  -5,918
  -6,503
  -7,113
  -7,750
  -8,413
  -9,102
  -9,819
New CAPEX, $m
  -87
  -127
  -178
  -242
  -320
  -412
  -518
  -636
  -765
  -903
  -1,048
  -1,198
  -1,351
  -1,505
  -1,659
  -1,811
  -1,961
  -2,107
  -2,250
  -2,390
  -2,526
  -2,660
  -2,792
  -2,922
  -3,052
  -3,183
  -3,314
  -3,448
  -3,586
  -3,727
Cash from investing activities, $m
  -116
  -174
  -250
  -350
  -476
  -632
  -821
  -1,042
  -1,298
  -1,589
  -1,915
  -2,274
  -2,667
  -3,091
  -3,546
  -4,030
  -4,542
  -5,081
  -5,645
  -6,235
  -6,849
  -7,488
  -8,152
  -8,840
  -9,555
  -10,296
  -11,064
  -11,861
  -12,688
  -13,546
Free cash flow, $m
  -11
  98
  258
  482
  788
  1,193
  1,713
  2,364
  3,164
  4,123
  5,254
  6,565
  8,061
  9,747
  11,624
  13,690
  15,943
  18,381
  20,999
  23,793
  26,758
  29,892
  33,190
  36,651
  40,273
  44,056
  48,000
  52,107
  56,380
  60,822
Issuance/(repayment) of debt, $m
  115
  166
  234
  318
  420
  541
  679
  834
  1,003
  1,184
  1,375
  1,571
  1,772
  1,975
  2,176
  2,376
  2,572
  2,764
  2,951
  3,135
  3,313
  3,489
  3,662
  3,833
  4,004
  4,175
  4,348
  4,523
  4,703
  4,889
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  115
  166
  234
  318
  420
  541
  679
  834
  1,003
  1,184
  1,375
  1,571
  1,772
  1,975
  2,176
  2,376
  2,572
  2,764
  2,951
  3,135
  3,313
  3,489
  3,662
  3,833
  4,004
  4,175
  4,348
  4,523
  4,703
  4,889
Total cash flow (excl. dividends), $m
  104
  265
  491
  800
  1,209
  1,734
  2,392
  3,199
  4,167
  5,307
  6,628
  8,136
  9,834
  11,722
  13,800
  16,066
  18,515
  21,145
  23,950
  26,927
  30,072
  33,381
  36,852
  40,484
  44,277
  48,231
  52,348
  56,630
  61,083
  65,711
Retained Cash Flow (-), $m
  -51
  -74
  -104
  -142
  -187
  -241
  -302
  -371
  -446
  -527
  -612
  -699
  -789
  -879
  -969
  -1,057
  -1,145
  -1,230
  -1,314
  -1,395
  -1,475
  -1,553
  -1,630
  -1,706
  -1,782
  -1,858
  -1,935
  -2,013
  -2,093
  -2,176
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  53
  191
  387
  659
  1,022
  1,493
  2,090
  2,827
  3,720
  4,780
  6,016
  7,437
  9,045
  10,843
  12,831
  15,008
  17,371
  19,915
  22,637
  25,532
  28,597
  31,828
  35,222
  38,778
  42,495
  46,373
  50,412
  54,617
  58,990
  63,535
Discount rate, %
  10.00
  10.50
  11.03
  11.58
  12.16
  12.76
  13.40
  14.07
  14.77
  15.51
  16.29
  17.10
  17.96
  18.86
  19.80
  20.79
  21.83
  22.92
  24.07
  25.27
  26.53
  27.86
  29.25
  30.72
  32.25
  33.86
  35.56
  37.33
  39.20
  41.16
PV of cash for distribution, $m
  48
  156
  283
  425
  576
  726
  866
  986
  1,076
  1,130
  1,144
  1,118
  1,057
  966
  854
  731
  605
  485
  376
  282
  204
  143
  96
  63
  39
  24
  14
  8
  4
  2
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

FINANCIAL RATIOS  of  Quintana Energy Services (QES)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

QES stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the QES stock intrinsic value calculation we used $438.033 million for the last fiscal year's total revenue generated by Quintana Energy Services. The default revenue input number comes from 0001 income statement of Quintana Energy Services. 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 QES 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 10%, whose default value for QES is calculated based on our internal credit rating of Quintana Energy Services, 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 Quintana Energy Services.
    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 QES stock the variable cost ratio is equal to 40%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $279 million in the base year in the intrinsic value calculation for QES 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 9.3% for Quintana Energy Services.

Corporate tax rate of 27% is the nominal tax rate for Quintana Energy Services. 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 QES 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 QES are equal to 33.2%.

Life of production assets of 3.3 years is the average useful life of capital assets used in Quintana Energy Services 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 QES is equal to 12.6%. 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 - $84.968 million for Quintana Energy Services - 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 33.631 million for Quintana Energy Services 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 Quintana Energy Services at the current share price and the inputted number of shares is $0.2 billion.

COMPANY NEWS

▶ Quintana Energy Services Reports Third Quarter 2018 Results   [Nov-06-18 05:38PM  Business Wire]
▶ Quintana Energy Services Reports First Quarter 2018 Results   [May-09-18 08:22PM  Business Wire]

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