Intrinsic value of Sundance Energy Australia Limited - SNDE

Previous Close

$3.01

  Intrinsic Value

$6.46

stock screener

  Rating & Target

str. buy

+114%

Previous close

$3.01

 
Intrinsic value

$6.46

 
Up/down potential

+114%

 
Rating

str. buy

We calculate the intrinsic value of SNDE 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 0.0

 

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, %
  56.70
  51.53
  46.88
  42.69
  38.92
  35.53
  32.48
  29.73
  27.26
  25.03
  23.03
  21.22
  19.60
  18.14
  16.83
  15.64
  14.58
  13.62
  12.76
  11.98
  11.29
  10.66
  10.09
  9.58
  9.12
  8.71
  8.34
  8.01
  7.71
  7.44
Revenue, $m
  163
  247
  363
  518
  719
  974
  1,291
  1,675
  2,131
  2,664
  3,278
  3,974
  4,753
  5,615
  6,560
  7,586
  8,692
  9,876
  11,136
  12,470
  13,878
  15,357
  16,906
  18,526
  20,217
  21,978
  23,811
  25,717
  27,699
  29,758
Variable operating expenses, $m
  110
  166
  244
  348
  484
  656
  869
  1,127
  1,434
  1,793
  2,206
  2,674
  3,198
  3,779
  4,415
  5,105
  5,850
  6,646
  7,494
  8,393
  9,340
  10,335
  11,378
  12,468
  13,606
  14,791
  16,025
  17,308
  18,641
  20,027
Fixed operating expenses, $m
  45
  46
  47
  48
  49
  50
  51
  52
  54
  55
  56
  57
  58
  60
  61
  62
  64
  65
  67
  68
  69
  71
  73
  74
  76
  77
  79
  81
  83
  85
Total operating expenses, $m
  155
  212
  291
  396
  533
  706
  920
  1,179
  1,488
  1,848
  2,262
  2,731
  3,256
  3,839
  4,476
  5,167
  5,914
  6,711
  7,561
  8,461
  9,409
  10,406
  11,451
  12,542
  13,682
  14,868
  16,104
  17,389
  18,724
  20,112
Operating income, $m
  8
  35
  72
  121
  186
  268
  371
  495
  643
  817
  1,016
  1,242
  1,496
  1,776
  2,084
  2,418
  2,778
  3,164
  3,575
  4,010
  4,469
  4,951
  5,456
  5,984
  6,535
  7,109
  7,707
  8,329
  8,975
  9,646
EBITDA, $m
  115
  196
  309
  460
  656
  906
  1,215
  1,590
  2,037
  2,559
  3,159
  3,840
  4,603
  5,447
  6,373
  7,378
  8,461
  9,621
  10,856
  12,163
  13,542
  14,991
  16,509
  18,096
  19,753
  21,478
  23,274
  25,143
  27,084
  29,102
Interest expense (income), $m
  0
  13
  25
  40
  62
  92
  130
  178
  238
  310
  397
  498
  614
  745
  893
  1,056
  1,234
  1,428
  1,638
  1,862
  2,100
  2,352
  2,618
  2,898
  3,191
  3,498
  3,817
  4,150
  4,497
  4,858
  5,232
Earnings before tax, $m
  -5
  10
  31
  59
  94
  139
  193
  257
  333
  420
  518
  629
  750
  884
  1,028
  1,184
  1,350
  1,527
  1,713
  1,910
  2,116
  2,332
  2,558
  2,793
  3,037
  3,292
  3,557
  3,832
  4,117
  4,414
Tax expense, $m
  0
  3
  8
  16
  25
  37
  52
  69
  90
  113
  140
  170
  203
  239
  278
  320
  365
  412
  463
  516
  571
  630
  691
  754
  820
  889
  960
  1,035
  1,112
  1,192
Net income, $m
  -5
  7
  23
  43
  69
  101
  141
  188
  243
  306
  378
  459
  548
  645
  751
  864
  986
  1,114
  1,251
  1,394
  1,545
  1,703
  1,867
  2,039
  2,217
  2,403
  2,596
  2,797
  3,006
  3,222

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
  712
  1,078
  1,584
  2,260
  3,140
  4,255
  5,637
  7,313
  9,306
  11,635
  14,314
  17,352
  20,753
  24,518
  28,644
  33,125
  37,955
  43,125
  48,628
  54,456
  60,601
  67,060
  73,827
  80,901
  88,282
  95,973
  103,977
  112,302
  120,956
  129,949
Adjusted assets (=assets-cash), $m
  712
  1,078
  1,584
  2,260
  3,140
  4,255
  5,637
  7,313
  9,306
  11,635
  14,314
  17,352
  20,753
  24,518
  28,644
  33,125
  37,955
  43,125
  48,628
  54,456
  60,601
  67,060
  73,827
  80,901
  88,282
  95,973
  103,977
  112,302
  120,956
  129,949
Revenue / Adjusted assets
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
  0.229
Average production assets, $m
  533
  807
  1,186
  1,692
  2,350
  3,185
  4,220
  5,474
  6,966
  8,710
  10,716
  12,990
  15,536
  18,354
  21,443
  24,798
  28,413
  32,284
  36,403
  40,766
  45,366
  50,201
  55,267
  60,562
  66,088
  71,845
  77,838
  84,070
  90,548
  97,280
Working capital, $m
  -8
  -12
  -18
  -26
  -36
  -49
  -65
  -84
  -107
  -133
  -164
  -199
  -238
  -281
  -328
  -379
  -435
  -494
  -557
  -624
  -694
  -768
  -845
  -926
  -1,011
  -1,099
  -1,191
  -1,286
  -1,385
  -1,488
Total debt, $m
  346
  570
  878
  1,291
  1,827
  2,508
  3,351
  4,373
  5,589
  7,009
  8,644
  10,497
  12,572
  14,868
  17,385
  20,119
  23,065
  26,219
  29,575
  33,130
  36,879
  40,818
  44,946
  49,262
  53,764
  58,456
  63,338
  68,416
  73,695
  79,181
Total liabilities, $m
  434
  658
  966
  1,379
  1,915
  2,596
  3,439
  4,461
  5,677
  7,097
  8,732
  10,585
  12,660
  14,956
  17,473
  20,206
  23,153
  26,306
  29,663
  33,218
  36,967
  40,906
  45,034
  49,350
  53,852
  58,544
  63,426
  68,504
  73,783
  79,269
Total equity, $m
  278
  421
  618
  881
  1,224
  1,659
  2,198
  2,852
  3,629
  4,538
  5,582
  6,767
  8,094
  9,562
  11,171
  12,919
  14,802
  16,819
  18,965
  21,238
  23,635
  26,153
  28,792
  31,551
  34,430
  37,429
  40,551
  43,798
  47,173
  50,680
Total liabilities and equity, $m
  712
  1,079
  1,584
  2,260
  3,139
  4,255
  5,637
  7,313
  9,306
  11,635
  14,314
  17,352
  20,754
  24,518
  28,644
  33,125
  37,955
  43,125
  48,628
  54,456
  60,602
  67,059
  73,826
  80,901
  88,282
  95,973
  103,977
  112,302
  120,956
  129,949
Debt-to-equity ratio
  1.250
  1.350
  1.420
  1.460
  1.490
  1.510
  1.520
  1.530
  1.540
  1.540
  1.550
  1.550
  1.550
  1.550
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
  1.560
Adjusted equity ratio
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -5
  7
  23
  43
  69
  101
  141
  188
  243
  306
  378
  459
  548
  645
  751
  864
  986
  1,114
  1,251
  1,394
  1,545
  1,703
  1,867
  2,039
  2,217
  2,403
  2,596
  2,797
  3,006
  3,222
Depreciation, amort., depletion, $m
  107
  161
  237
  338
  470
  637
  844
  1,095
  1,393
  1,742
  2,143
  2,598
  3,107
  3,671
  4,289
  4,960
  5,683
  6,457
  7,281
  8,153
  9,073
  10,040
  11,053
  12,112
  13,218
  14,369
  15,568
  16,814
  18,110
  19,456
Funds from operations, $m
  101
  169
  260
  381
  539
  738
  985
  1,283
  1,636
  2,048
  2,521
  3,057
  3,655
  4,316
  5,039
  5,824
  6,668
  7,571
  8,531
  9,547
  10,618
  11,743
  12,920
  14,151
  15,435
  16,772
  18,164
  19,611
  21,115
  22,678
Change in working capital, $m
  -3
  -4
  -6
  -8
  -10
  -13
  -16
  -19
  -23
  -27
  -31
  -35
  -39
  -43
  -47
  -51
  -55
  -59
  -63
  -67
  -70
  -74
  -77
  -81
  -85
  -88
  -92
  -95
  -99
  -103
Cash from operations, $m
  104
  173
  266
  389
  549
  751
  1,001
  1,302
  1,659
  2,075
  2,552
  3,092
  3,694
  4,359
  5,087
  5,875
  6,724
  7,630
  8,594
  9,614
  10,688
  11,817
  12,998
  14,232
  15,519
  16,860
  18,256
  19,706
  21,214
  22,781
Maintenance CAPEX, $m
  -68
  -107
  -161
  -237
  -338
  -470
  -637
  -844
  -1,095
  -1,393
  -1,742
  -2,143
  -2,598
  -3,107
  -3,671
  -4,289
  -4,960
  -5,683
  -6,457
  -7,281
  -8,153
  -9,073
  -10,040
  -11,053
  -12,112
  -13,218
  -14,369
  -15,568
  -16,814
  -18,110
New CAPEX, $m
  -193
  -275
  -378
  -506
  -658
  -835
  -1,034
  -1,254
  -1,492
  -1,744
  -2,006
  -2,274
  -2,546
  -2,818
  -3,089
  -3,355
  -3,616
  -3,870
  -4,119
  -4,363
  -4,601
  -4,835
  -5,066
  -5,296
  -5,526
  -5,757
  -5,992
  -6,232
  -6,478
  -6,732
Cash from investing activities, $m
  -261
  -382
  -539
  -743
  -996
  -1,305
  -1,671
  -2,098
  -2,587
  -3,137
  -3,748
  -4,417
  -5,144
  -5,925
  -6,760
  -7,644
  -8,576
  -9,553
  -10,576
  -11,644
  -12,754
  -13,908
  -15,106
  -16,349
  -17,638
  -18,975
  -20,361
  -21,800
  -23,292
  -24,842
Free cash flow, $m
  -156
  -208
  -274
  -354
  -448
  -554
  -671
  -797
  -928
  -1,062
  -1,195
  -1,326
  -1,450
  -1,567
  -1,673
  -1,768
  -1,852
  -1,923
  -1,982
  -2,029
  -2,065
  -2,091
  -2,108
  -2,117
  -2,119
  -2,115
  -2,106
  -2,093
  -2,078
  -2,061
Issuance/(repayment) of debt, $m
  157
  224
  308
  412
  537
  680
  843
  1,022
  1,216
  1,421
  1,634
  1,853
  2,075
  2,297
  2,517
  2,734
  2,946
  3,154
  3,357
  3,555
  3,749
  3,940
  4,128
  4,315
  4,503
  4,691
  4,883
  5,078
  5,279
  5,486
Issuance/(repurchase) of shares, $m
  105
  136
  174
  221
  274
  334
  398
  466
  534
  602
  666
  726
  779
  823
  858
  883
  898
  902
  895
  878
  852
  816
  772
  720
  661
  596
  525
  450
  369
  285
Cash from financing (excl. dividends), $m  
  262
  360
  482
  633
  811
  1,014
  1,241
  1,488
  1,750
  2,023
  2,300
  2,579
  2,854
  3,120
  3,375
  3,617
  3,844
  4,056
  4,252
  4,433
  4,601
  4,756
  4,900
  5,035
  5,164
  5,287
  5,408
  5,528
  5,648
  5,771
Total cash flow (excl. dividends), $m
  106
  151
  209
  279
  363
  460
  570
  691
  822
  961
  1,105
  1,253
  1,403
  1,553
  1,702
  1,849
  1,993
  2,133
  2,270
  2,404
  2,535
  2,664
  2,792
  2,919
  3,045
  3,173
  3,302
  3,435
  3,570
  3,710
Retained Cash Flow (-), $m
  -105
  -143
  -197
  -264
  -343
  -435
  -539
  -654
  -777
  -908
  -1,045
  -1,185
  -1,327
  -1,468
  -1,609
  -1,748
  -1,884
  -2,016
  -2,146
  -2,273
  -2,397
  -2,519
  -2,639
  -2,759
  -2,879
  -2,999
  -3,122
  -3,247
  -3,375
  -3,507
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
  0
  8
  11
  15
  20
  25
  31
  38
  45
  53
  60
  69
  77
  85
  93
  101
  109
  117
  124
  132
  139
  146
  153
  160
  167
  174
  181
  188
  195
  203
Discount rate, %
  6.20
  6.51
  6.84
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.04
  20.00
  21.00
  22.05
  23.15
  24.30
  25.52
PV of cash for distribution, $m
  0
  7
  9
  12
  14
  16
  18
  19
  20
  21
  21
  20
  19
  18
  16
  15
  13
  11
  9
  7
  6
  4
  3
  2
  2
  1
  1
  1
  0
  0
Current shareholders' claim on cash, %
  54.1
  31.9
  20.0
  13.2
  9.2
  6.6
  4.9
  3.8
  3.0
  2.4
  2.0
  1.7
  1.4
  1.3
  1.1
  1.0
  0.9
  0.8
  0.8
  0.7
  0.7
  0.7
  0.6
  0.6
  0.6
  0.6
  0.6
  0.6
  0.6
  0.5

Sundance Energy Australia Limited engages in the exploration, development, and production of oil and natural gas in North America and Australia. The company’s exploration and development activities are focused in the Eagle Ford project in the South-Texas-Gulf Coast Basin; and the Mississippian/Woodford Formations in Oklahoma. Sundance Energy Australia Limited was incorporated in 2004 and is based in Wayville, Australia.

FINANCIAL RATIOS  of  Sundance Energy Australia Limited (SNDE)

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%

SNDE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SNDE stock intrinsic value calculation we used $104 million for the last fiscal year's total revenue generated by Sundance Energy Australia Limited. The default revenue input number comes from 0001 income statement of Sundance Energy Australia Limited. 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 SNDE stock valuation model: a) initial revenue growth rate of 56.7% 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 6.2%, whose default value for SNDE is calculated based on our internal credit rating of Sundance Energy Australia Limited, 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 Sundance Energy Australia Limited.
    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 SNDE stock the variable cost ratio is equal to 67.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $44 million in the base year in the intrinsic value calculation for SNDE 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 7.1% for Sundance Energy Australia Limited.

Corporate tax rate of 27% is the nominal tax rate for Sundance Energy Australia Limited. 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 SNDE 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 SNDE are equal to 326.9%.

Life of production assets of 0 years is the average useful life of capital assets used in Sundance Energy Australia Limited 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 SNDE is equal to -5%. 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 - $177.351 million for Sundance Energy Australia Limited - 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 6.869 million for Sundance Energy Australia Limited 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 Sundance Energy Australia Limited at the current share price and the inputted number of shares is $0.0 billion.

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