Intrinsic value of Sanchez Energy - SN

Previous Close

$2.45

  Intrinsic Value

$61.32

stock screener

  Rating & Target

str. buy

+999%

Previous close

$2.45

 
Intrinsic value

$61.32

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of SN 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, %
  47.60
  43.34
  39.51
  36.06
  32.95
  30.15
  27.64
  25.38
  23.34
  21.50
  19.85
  18.37
  17.03
  15.83
  14.75
  13.77
  12.89
  12.10
  11.39
  10.75
  10.18
  9.66
  9.20
  8.78
  8.40
  8.06
  7.75
  7.48
  7.23
  7.01
Revenue, $m
  1,093
  1,566
  2,185
  2,973
  3,953
  5,144
  6,566
  8,233
  10,154
  12,337
  14,787
  17,503
  20,484
  23,726
  27,225
  30,974
  34,967
  39,200
  43,667
  48,363
  53,286
  58,434
  63,807
  69,406
  75,235
  81,297
  87,600
  94,150
  100,957
  108,030
Variable operating expenses, $m
  592
  849
  1,184
  1,611
  2,142
  2,788
  3,559
  4,462
  5,503
  6,687
  8,014
  9,487
  11,102
  12,860
  14,756
  16,788
  18,952
  21,246
  23,667
  26,213
  28,881
  31,671
  34,583
  37,618
  40,777
  44,063
  47,479
  51,029
  54,718
  58,552
Fixed operating expenses, $m
  258
  263
  269
  275
  281
  287
  293
  300
  307
  313
  320
  327
  334
  342
  349
  357
  365
  373
  381
  389
  398
  407
  416
  425
  434
  444
  453
  463
  474
  484
Total operating expenses, $m
  850
  1,112
  1,453
  1,886
  2,423
  3,075
  3,852
  4,762
  5,810
  7,000
  8,334
  9,814
  11,436
  13,202
  15,105
  17,145
  19,317
  21,619
  24,048
  26,602
  29,279
  32,078
  34,999
  38,043
  41,211
  44,507
  47,932
  51,492
  55,192
  59,036
Operating income, $m
  243
  454
  732
  1,087
  1,529
  2,069
  2,714
  3,471
  4,344
  5,337
  6,452
  7,689
  9,047
  10,525
  12,120
  13,829
  15,650
  17,581
  19,618
  21,761
  24,007
  26,356
  28,808
  31,363
  34,023
  36,791
  39,667
  42,657
  45,764
  48,994
EBITDA, $m
  505
  830
  1,256
  1,799
  2,477
  3,302
  4,288
  5,444
  6,778
  8,295
  9,997
  11,885
  13,958
  16,213
  18,646
  21,255
  24,033
  26,979
  30,087
  33,355
  36,782
  40,365
  44,105
  48,003
  52,060
  56,281
  60,669
  65,229
  69,968
  74,893
Interest expense (income), $m
  119
  150
  175
  280
  418
  593
  810
  1,075
  1,390
  1,760
  2,187
  2,671
  3,215
  3,818
  4,480
  5,200
  5,976
  6,809
  7,695
  8,635
  9,627
  10,669
  11,762
  12,905
  14,098
  15,341
  16,635
  17,981
  19,380
  20,834
  22,345
Earnings before tax, $m
  93
  279
  452
  669
  937
  1,259
  1,639
  2,080
  2,584
  3,151
  3,781
  4,474
  5,229
  6,045
  6,920
  7,853
  8,842
  9,885
  10,983
  12,134
  13,338
  14,594
  15,903
  17,266
  18,683
  20,156
  21,687
  23,277
  24,931
  26,649
Tax expense, $m
  25
  75
  122
  181
  253
  340
  443
  562
  698
  851
  1,021
  1,208
  1,412
  1,632
  1,868
  2,120
  2,387
  2,669
  2,965
  3,276
  3,601
  3,940
  4,294
  4,662
  5,044
  5,442
  5,855
  6,285
  6,731
  7,195
Net income, $m
  68
  204
  330
  488
  684
  919
  1,197
  1,519
  1,886
  2,300
  2,760
  3,266
  3,817
  4,413
  5,051
  5,732
  6,454
  7,216
  8,018
  8,858
  9,737
  10,654
  11,609
  12,604
  13,638
  14,714
  15,831
  16,993
  18,199
  19,454

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
  3,642
  5,221
  7,284
  9,910
  13,175
  17,148
  21,888
  27,442
  33,846
  41,124
  49,289
  58,343
  68,279
  79,087
  90,749
  103,246
  116,558
  130,667
  145,555
  161,209
  177,619
  194,779
  212,689
  231,354
  250,783
  270,992
  292,000
  313,833
  336,522
  360,100
Adjusted assets (=assets-cash), $m
  3,642
  5,221
  7,284
  9,910
  13,175
  17,148
  21,888
  27,442
  33,846
  41,124
  49,289
  58,343
  68,279
  79,087
  90,749
  103,246
  116,558
  130,667
  145,555
  161,209
  177,619
  194,779
  212,689
  231,354
  250,783
  270,992
  292,000
  313,833
  336,522
  360,100
Revenue / Adjusted assets
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
Average production assets, $m
  2,017
  2,891
  4,034
  5,488
  7,296
  9,497
  12,121
  15,197
  18,744
  22,775
  27,296
  32,310
  37,813
  43,798
  50,257
  57,177
  64,550
  72,363
  80,608
  89,277
  98,365
  107,869
  117,787
  128,124
  138,884
  150,075
  161,710
  173,801
  186,366
  199,424
Working capital, $m
  -343
  -492
  -686
  -934
  -1,241
  -1,615
  -2,062
  -2,585
  -3,188
  -3,874
  -4,643
  -5,496
  -6,432
  -7,450
  -8,549
  -9,726
  -10,980
  -12,309
  -13,711
  -15,186
  -16,732
  -18,348
  -20,035
  -21,794
  -23,624
  -25,527
  -27,506
  -29,563
  -31,700
  -33,921
Total debt, $m
  2,367
  3,788
  5,644
  8,007
  10,946
  14,522
  18,787
  23,786
  29,550
  36,101
  43,449
  51,597
  60,540
  70,267
  80,762
  92,010
  103,991
  116,689
  130,088
  144,177
  158,945
  174,389
  190,509
  207,307
  224,793
  242,981
  261,889
  281,539
  301,958
  323,179
Total liabilities, $m
  3,278
  4,699
  6,555
  8,919
  11,858
  15,433
  19,699
  24,698
  30,462
  37,012
  44,360
  52,509
  61,451
  71,178
  81,674
  92,921
  104,902
  117,600
  131,000
  145,088
  159,857
  175,301
  191,420
  208,218
  225,705
  243,892
  262,800
  282,450
  302,870
  324,090
Total equity, $m
  364
  522
  728
  991
  1,318
  1,715
  2,189
  2,744
  3,385
  4,112
  4,929
  5,834
  6,828
  7,909
  9,075
  10,325
  11,656
  13,067
  14,556
  16,121
  17,762
  19,478
  21,269
  23,135
  25,078
  27,099
  29,200
  31,383
  33,652
  36,010
Total liabilities and equity, $m
  3,642
  5,221
  7,283
  9,910
  13,176
  17,148
  21,888
  27,442
  33,847
  41,124
  49,289
  58,343
  68,279
  79,087
  90,749
  103,246
  116,558
  130,667
  145,556
  161,209
  177,619
  194,779
  212,689
  231,353
  250,783
  270,991
  292,000
  313,833
  336,522
  360,100
Debt-to-equity ratio
  6.500
  7.250
  7.750
  8.080
  8.310
  8.470
  8.580
  8.670
  8.730
  8.780
  8.820
  8.840
  8.870
  8.880
  8.900
  8.910
  8.920
  8.930
  8.940
  8.940
  8.950
  8.950
  8.960
  8.960
  8.960
  8.970
  8.970
  8.970
  8.970
  8.970
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  68
  204
  330
  488
  684
  919
  1,197
  1,519
  1,886
  2,300
  2,760
  3,266
  3,817
  4,413
  5,051
  5,732
  6,454
  7,216
  8,018
  8,858
  9,737
  10,654
  11,609
  12,604
  13,638
  14,714
  15,831
  16,993
  18,199
  19,454
Depreciation, amort., depletion, $m
  262
  376
  524
  713
  948
  1,233
  1,574
  1,974
  2,434
  2,958
  3,545
  4,196
  4,911
  5,688
  6,527
  7,426
  8,383
  9,398
  10,469
  11,594
  12,775
  14,009
  15,297
  16,639
  18,037
  19,490
  21,001
  22,572
  24,203
  25,899
Funds from operations, $m
  330
  579
  853
  1,201
  1,631
  2,152
  2,771
  3,492
  4,320
  5,258
  6,305
  7,462
  8,728
  10,101
  11,578
  13,158
  14,837
  16,614
  18,486
  20,452
  22,511
  24,662
  26,906
  29,243
  31,675
  34,204
  36,833
  39,564
  42,403
  45,353
Change in working capital, $m
  -111
  -149
  -194
  -247
  -308
  -374
  -446
  -523
  -603
  -686
  -769
  -853
  -936
  -1,018
  -1,099
  -1,177
  -1,254
  -1,329
  -1,402
  -1,475
  -1,546
  -1,616
  -1,687
  -1,758
  -1,830
  -1,904
  -1,979
  -2,057
  -2,137
  -2,221
Cash from operations, $m
  440
  728
  1,048
  1,449
  1,939
  2,527
  3,217
  4,015
  4,924
  5,943
  7,074
  8,315
  9,664
  11,119
  12,677
  14,335
  16,091
  17,943
  19,889
  21,927
  24,057
  26,279
  28,593
  31,001
  33,505
  36,108
  38,812
  41,621
  44,540
  47,574
Maintenance CAPEX, $m
  -177
  -262
  -376
  -524
  -713
  -948
  -1,233
  -1,574
  -1,974
  -2,434
  -2,958
  -3,545
  -4,196
  -4,911
  -5,688
  -6,527
  -7,426
  -8,383
  -9,398
  -10,469
  -11,594
  -12,775
  -14,009
  -15,297
  -16,639
  -18,037
  -19,490
  -21,001
  -22,572
  -24,203
New CAPEX, $m
  -651
  -874
  -1,142
  -1,454
  -1,808
  -2,200
  -2,625
  -3,076
  -3,547
  -4,031
  -4,522
  -5,014
  -5,503
  -5,985
  -6,458
  -6,921
  -7,372
  -7,813
  -8,245
  -8,669
  -9,088
  -9,503
  -9,919
  -10,337
  -10,760
  -11,192
  -11,634
  -12,091
  -12,565
  -13,058
Cash from investing activities, $m
  -828
  -1,136
  -1,518
  -1,978
  -2,521
  -3,148
  -3,858
  -4,650
  -5,521
  -6,465
  -7,480
  -8,559
  -9,699
  -10,896
  -12,146
  -13,448
  -14,798
  -16,196
  -17,643
  -19,138
  -20,682
  -22,278
  -23,928
  -25,634
  -27,399
  -29,229
  -31,124
  -33,092
  -35,137
  -37,261
Free cash flow, $m
  -388
  -408
  -470
  -530
  -582
  -621
  -641
  -635
  -597
  -522
  -405
  -244
  -35
  223
  530
  888
  1,293
  1,747
  2,246
  2,789
  3,375
  4,001
  4,666
  5,368
  6,106
  6,879
  7,687
  8,528
  9,404
  10,313
Issuance/(repayment) of debt, $m
  338
  1,421
  1,856
  2,364
  2,939
  3,576
  4,266
  4,999
  5,764
  6,550
  7,348
  8,148
  8,943
  9,727
  10,496
  11,247
  11,981
  12,698
  13,399
  14,089
  14,769
  15,444
  16,119
  16,798
  17,486
  18,188
  18,908
  19,650
  20,420
  21,221
Issuance/(repurchase) of shares, $m
  766
  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  
  1,104
  1,421
  1,856
  2,364
  2,939
  3,576
  4,266
  4,999
  5,764
  6,550
  7,348
  8,148
  8,943
  9,727
  10,496
  11,247
  11,981
  12,698
  13,399
  14,089
  14,769
  15,444
  16,119
  16,798
  17,486
  18,188
  18,908
  19,650
  20,420
  21,221
Total cash flow (excl. dividends), $m
  716
  1,012
  1,386
  1,834
  2,357
  2,954
  3,625
  4,364
  5,167
  6,029
  6,943
  7,904
  8,908
  9,950
  11,026
  12,135
  13,275
  14,445
  15,645
  16,878
  18,144
  19,445
  20,785
  22,166
  23,592
  25,067
  26,594
  28,178
  29,823
  31,533
Retained Cash Flow (-), $m
  -833
  -158
  -206
  -263
  -327
  -397
  -474
  -555
  -640
  -728
  -816
  -905
  -994
  -1,081
  -1,166
  -1,250
  -1,331
  -1,411
  -1,489
  -1,565
  -1,641
  -1,716
  -1,791
  -1,866
  -1,943
  -2,021
  -2,101
  -2,183
  -2,269
  -2,358
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
  -118
  855
  1,180
  1,571
  2,030
  2,557
  3,151
  3,809
  4,527
  5,301
  6,126
  6,999
  7,914
  8,869
  9,860
  10,885
  11,943
  13,034
  14,157
  15,312
  16,503
  17,729
  18,994
  20,300
  21,649
  23,046
  24,494
  25,995
  27,554
  29,176
Discount rate, %
  13.50
  14.18
  14.88
  15.63
  16.41
  17.23
  18.09
  19.00
  19.95
  20.94
  21.99
  23.09
  24.24
  25.46
  26.73
  28.07
  29.47
  30.94
  32.49
  34.11
  35.82
  37.61
  39.49
  41.47
  43.54
  45.72
  48.00
  50.40
  52.92
  55.57
PV of cash for distribution, $m
  -104
  656
  778
  879
  950
  985
  984
  947
  881
  792
  688
  579
  471
  371
  282
  208
  148
  102
  68
  43
  27
  16
  9
  5
  3
  1
  1
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Sanchez Energy Corporation is an independent exploration and production company. The Company is focused on the acquisition and development of the United States onshore unconventional oil and natural gas resources. The Company primarily focuses on the Eagle Ford Shale in South Texas. The Company also holds an undeveloped acreage position in the Tuscaloosa Marine Shale (TMS) in Mississippi and Louisiana. As of December 31, 2016, it had assembled approximately 278,000 net leasehold acres in the Eagle Ford Shale. As of December 31, 2016, it had 473 net wells in the Eagle Ford Shale area. In its Catarina area, the Company had approximately 106,000 net acres in Dimmit, LaSalle and Webb Counties, Texas, at December 31, 2016. In its Maverick area, it had approximately 100,000 net acres in Dimmit, Frio, LaSalle, Zavala and McMullen Counties, Texas, at December 31, 2016. In its Javelina area, it had approximately 39,500 net acres in LaSalle and Webb Counties, Texas, at December 31, 2016.

FINANCIAL RATIOS  of  Sanchez Energy (SN)

Valuation Ratios
P/E Ratio -0.6
Price to Sales 0.4
Price to Book -0.2
Price to Tangible Book
Price to Cash Flow 0.9
Price to Free Cash Flow -1.2
Growth Rates
Sales Growth Rate -9.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -52%
Cap. Spend. - 3 Yr. Gr. Rate -7.9%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity -246.1%
Total Debt to Equity -246.1%
Interest Coverage -1
Management Effectiveness
Return On Assets -9.8%
Ret/ On Assets - 3 Yr. Avg. -22.7%
Return On Total Capital -22.7%
Ret/ On T. Cap. - 3 Yr. Avg. -32.2%
Return On Equity 44.6%
Return On Equity - 3 Yr. Avg. -164.2%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 57.3%
Gross Margin - 3 Yr. Avg. 66.3%
EBITDA Margin 5.6%
EBITDA Margin - 3 Yr. Avg. -49.1%
Operating Margin -44.5%
Oper. Margin - 3 Yr. Avg. -123.3%
Pre-Tax Margin -59.2%
Pre-Tax Margin - 3 Yr. Avg. -122.7%
Net Profit Margin -59.6%
Net Profit Margin - 3 Yr. Avg. -122.9%
Effective Tax Rate -0.8%
Eff/ Tax Rate - 3 Yr. Avg. 10.7%
Payout Ratio -1.6%

SN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SN stock intrinsic value calculation we used $740.331 million for the last fiscal year's total revenue generated by Sanchez Energy. The default revenue input number comes from 0001 income statement of Sanchez 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 SN stock valuation model: a) initial revenue growth rate of 47.6% 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 13.5%, whose default value for SN is calculated based on our internal credit rating of Sanchez 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 Sanchez 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 SN stock the variable cost ratio is equal to 54.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $252 million in the base year in the intrinsic value calculation for SN 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 7.4% for Sanchez Energy.

Corporate tax rate of 27% is the nominal tax rate for Sanchez 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 SN 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 SN are equal to 184.6%.

Life of production assets of 7.7 years is the average useful life of capital assets used in Sanchez 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 SN is equal to -31.4%. 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 - $-469.14 million for Sanchez 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 87.798 million for Sanchez 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 Sanchez Energy at the current share price and the inputted number of shares is $0.2 billion.

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COMPANY NEWS

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▶ Sanchez Energy Announces Management Change   [Jul-10-18 06:30PM  GlobeNewswire]
▶ Does Sanchez Energy Corporations (NYSE:SN) CEO Pay Matter?   [May-27-18 08:01AM  Simply Wall St.]
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