Intrinsic value of Superior Energy Services - SPN

Previous Close

$11.07

  Intrinsic Value

$0.81

stock screener

  Rating & Target

str. sell

-93%

Previous close

$11.07

 
Intrinsic value

$0.81

 
Up/down potential

-93%

 
Rating

str. sell

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

We calculate the intrinsic value of SPN 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

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, %
  -47.75
  55.20
  50.18
  45.66
  41.60
  37.94
  34.64
  31.68
  29.01
  26.61
  24.45
  22.50
  20.75
  19.18
  17.76
  16.48
  15.34
  14.30
  13.37
  12.53
  11.78
  11.10
  10.49
  9.94
  9.45
  9.00
  8.60
  8.24
  7.92
  7.63
  7.36
Revenue, $m
  1,450
  2,250
  3,380
  4,923
  6,971
  9,615
  12,946
  17,047
  21,992
  27,844
  34,652
  42,450
  51,259
  61,090
  71,939
  83,798
  96,649
  110,472
  125,244
  140,943
  157,548
  175,041
  193,408
  212,639
  232,732
  253,688
  275,515
  298,227
  321,844
  346,391
  371,901
Variable operating expenses, $m
 
  3,775
  5,628
  8,162
  11,523
  15,864
  21,332
  28,064
  36,182
  45,788
  56,963
  69,683
  84,145
  100,282
  118,092
  137,559
  158,654
  181,345
  205,595
  231,366
  258,623
  287,339
  317,489
  349,058
  382,042
  416,442
  452,272
  489,555
  528,323
  568,619
  610,495
Fixed operating expenses, $m
 
  22
  22
  23
  23
  24
  24
  25
  26
  26
  27
  28
  28
  29
  30
  30
  31
  32
  33
  34
  34
  35
  36
  37
  38
  39
  40
  41
  42
  43
  44
Total operating expenses, $m
  2,480
  3,797
  5,650
  8,185
  11,546
  15,888
  21,356
  28,089
  36,208
  45,814
  56,990
  69,711
  84,173
  100,311
  118,122
  137,589
  158,685
  181,377
  205,628
  231,400
  258,657
  287,374
  317,525
  349,095
  382,080
  416,481
  452,312
  489,596
  528,365
  568,662
  610,539
Operating income, $m
  -1,030
  -1,546
  -2,271
  -3,261
  -4,576
  -6,273
  -8,410
  -11,042
  -14,215
  -17,970
  -22,338
  -27,261
  -32,914
  -39,221
  -46,183
  -53,791
  -62,037
  -70,905
  -80,383
  -90,456
  -101,110
  -112,333
  -124,117
  -136,456
  -149,348
  -162,793
  -176,797
  -191,369
  -206,521
  -222,271
  -238,638
EBITDA, $m
  -520
  -931
  -1,387
  -2,011
  -2,839
  -3,907
  -5,253
  -6,911
  -8,909
  -11,273
  -14,024
  -17,174
  -20,733
  -24,705
  -29,088
  -33,878
  -39,070
  -44,654
  -50,622
  -56,964
  -63,672
  -70,739
  -78,158
  -85,927
  -94,044
  -102,510
  -111,327
  -120,502
  -130,043
  -139,959
  -150,264
Interest expense (income), $m
  93
  82
  159
  267
  414
  610
  862
  1,181
  1,573
  2,045
  2,605
  3,255
  4,000
  4,842
  5,782
  6,819
  7,952
  9,180
  10,501
  11,913
  13,413
  15,000
  16,672
  18,427
  20,265
  22,185
  24,187
  26,273
  28,444
  30,701
  33,047
Earnings before tax, $m
  -1,100
  -1,628
  -2,429
  -3,528
  -4,990
  -6,882
  -9,273
  -12,223
  -15,788
  -20,015
  -24,943
  -30,516
  -36,914
  -44,063
  -51,964
  -60,610
  -69,988
  -80,085
  -90,884
  -102,369
  -114,523
  -127,333
  -140,789
  -154,883
  -169,612
  -184,978
  -200,984
  -217,642
  -234,965
  -252,972
  -271,685
Tax expense, $m
  -267
  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
  -887
  -1,628
  -2,429
  -3,528
  -4,990
  -6,882
  -9,273
  -12,223
  -15,788
  -20,015
  -24,943
  -30,516
  -36,914
  -44,063
  -51,964
  -60,610
  -69,988
  -80,085
  -90,884
  -102,369
  -114,523
  -127,333
  -140,789
  -154,883
  -169,612
  -184,978
  -200,984
  -217,642
  -234,965
  -252,972
  -271,685

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  188
  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
  3,470
  5,091
  7,646
  11,138
  15,771
  21,753
  29,289
  38,567
  49,756
  62,996
  78,398
  96,040
  115,971
  138,212
  162,759
  189,588
  218,663
  249,937
  283,358
  318,876
  356,444
  396,020
  437,574
  481,084
  526,543
  573,954
  623,337
  674,721
  728,153
  783,691
  841,406
Adjusted assets (=assets-cash), $m
  3,282
  5,091
  7,646
  11,138
  15,771
  21,753
  29,289
  38,567
  49,756
  62,996
  78,398
  96,040
  115,971
  138,212
  162,759
  189,588
  218,663
  249,937
  283,358
  318,876
  356,444
  396,020
  437,574
  481,084
  526,543
  573,954
  623,337
  674,721
  728,153
  783,691
  841,406
Revenue / Adjusted assets
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
  0.442
Average production assets, $m
  2,034
  3,155
  4,738
  6,902
  9,773
  13,480
  18,150
  23,900
  30,833
  39,038
  48,582
  59,514
  71,866
  85,648
  100,859
  117,485
  135,502
  154,882
  175,592
  197,602
  220,883
  245,407
  271,158
  298,120
  326,290
  355,670
  386,272
  418,114
  451,225
  485,641
  521,406
Working capital, $m
  437
  387
  581
  847
  1,199
  1,654
  2,227
  2,932
  3,783
  4,789
  5,960
  7,301
  8,817
  10,507
  12,374
  14,413
  16,624
  19,001
  21,542
  24,242
  27,098
  30,107
  33,266
  36,574
  40,030
  43,634
  47,389
  51,295
  55,357
  59,579
  63,967
Total debt, $m
  1,285
  2,479
  4,166
  6,470
  9,528
  13,476
  18,450
  24,574
  31,958
  40,696
  50,861
  62,505
  75,660
  90,339
  106,540
  124,247
  143,437
  164,077
  186,135
  209,577
  234,372
  260,492
  287,918
  316,635
  346,637
  377,929
  410,521
  444,435
  479,700
  516,355
  554,447
Total liabilities, $m
  2,166
  3,360
  5,047
  7,351
  10,409
  14,357
  19,331
  25,455
  32,839
  41,577
  51,742
  63,386
  76,541
  91,220
  107,421
  125,128
  144,318
  164,958
  187,016
  210,458
  235,253
  261,373
  288,799
  317,516
  347,518
  378,810
  411,402
  445,316
  480,581
  517,236
  555,328
Total equity, $m
  1,304
  1,731
  2,600
  3,787
  5,362
  7,396
  9,958
  13,113
  16,917
  21,419
  26,655
  32,654
  39,430
  46,992
  55,338
  64,460
  74,345
  84,978
  96,342
  108,418
  121,191
  134,647
  148,775
  163,569
  179,025
  195,145
  211,934
  229,405
  247,572
  266,455
  286,078
Total liabilities and equity, $m
  3,470
  5,091
  7,647
  11,138
  15,771
  21,753
  29,289
  38,568
  49,756
  62,996
  78,397
  96,040
  115,971
  138,212
  162,759
  189,588
  218,663
  249,936
  283,358
  318,876
  356,444
  396,020
  437,574
  481,085
  526,543
  573,955
  623,336
  674,721
  728,153
  783,691
  841,406
Debt-to-equity ratio
  0.985
  1.430
  1.600
  1.710
  1.780
  1.820
  1.850
  1.870
  1.890
  1.900
  1.910
  1.910
  1.920
  1.920
  1.930
  1.930
  1.930
  1.930
  1.930
  1.930
  1.930
  1.930
  1.940
  1.940
  1.940
  1.940
  1.940
  1.940
  1.940
  1.940
  1.940
Adjusted equity ratio
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -887
  -1,628
  -2,429
  -3,528
  -4,990
  -6,882
  -9,273
  -12,223
  -15,788
  -20,015
  -24,943
  -30,516
  -36,914
  -44,063
  -51,964
  -60,610
  -69,988
  -80,085
  -90,884
  -102,369
  -114,523
  -127,333
  -140,789
  -154,883
  -169,612
  -184,978
  -200,984
  -217,642
  -234,965
  -252,972
  -271,685
Depreciation, amort., depletion, $m
  510
  615
  883
  1,250
  1,737
  2,365
  3,157
  4,131
  5,306
  6,697
  8,315
  10,087
  12,181
  14,517
  17,095
  19,913
  22,966
  26,251
  29,761
  33,492
  37,438
  41,594
  45,959
  50,529
  55,303
  60,283
  65,470
  70,867
  76,479
  82,312
  88,374
Funds from operations, $m
  37
  -1,013
  -1,546
  -2,278
  -3,253
  -4,517
  -6,116
  -8,091
  -10,481
  -13,318
  -16,628
  -20,429
  -24,733
  -29,547
  -34,869
  -40,697
  -47,022
  -53,834
  -61,123
  -68,877
  -77,085
  -85,738
  -94,830
  -104,354
  -114,309
  -124,695
  -135,515
  -146,775
  -158,486
  -170,660
  -183,311
Change in working capital, $m
  -24
  138
  194
  265
  352
  455
  573
  705
  851
  1,007
  1,171
  1,341
  1,515
  1,691
  1,866
  2,040
  2,210
  2,378
  2,541
  2,700
  2,856
  3,009
  3,159
  3,308
  3,456
  3,604
  3,754
  3,906
  4,062
  4,222
  4,388
Cash from operations, $m
  61
  -1,150
  -1,740
  -2,543
  -3,605
  -4,972
  -6,689
  -8,797
  -11,332
  -14,325
  -17,799
  -21,770
  -26,249
  -31,238
  -36,736
  -42,737
  -49,232
  -56,212
  -63,664
  -71,577
  -79,941
  -88,747
  -97,989
  -107,662
  -117,765
  -128,299
  -139,269
  -150,682
  -162,548
  -174,882
  -187,699
Maintenance CAPEX, $m
  0
  -345
  -535
  -803
  -1,170
  -1,656
  -2,285
  -3,076
  -4,051
  -5,226
  -6,617
  -8,234
  -10,087
  -12,181
  -14,517
  -17,095
  -19,913
  -22,966
  -26,251
  -29,761
  -33,492
  -37,438
  -41,594
  -45,959
  -50,529
  -55,303
  -60,283
  -65,470
  -70,867
  -76,479
  -82,312
New CAPEX, $m
  -81
  -1,122
  -1,583
  -2,164
  -2,871
  -3,707
  -4,670
  -5,750
  -6,933
  -8,205
  -9,544
  -10,933
  -12,351
  -13,782
  -15,211
  -16,626
  -18,017
  -19,380
  -20,711
  -22,010
  -23,280
  -24,525
  -25,750
  -26,963
  -28,170
  -29,380
  -30,601
  -31,842
  -33,111
  -34,416
  -35,765
Cash from investing activities, $m
  -74
  -1,467
  -2,118
  -2,967
  -4,041
  -5,363
  -6,955
  -8,826
  -10,984
  -13,431
  -16,161
  -19,167
  -22,438
  -25,963
  -29,728
  -33,721
  -37,930
  -42,346
  -46,962
  -51,771
  -56,772
  -61,963
  -67,344
  -72,922
  -78,699
  -84,683
  -90,884
  -97,312
  -103,978
  -110,895
  -118,077
Free cash flow, $m
  -13
  -2,617
  -3,858
  -5,510
  -7,646
  -10,336
  -13,644
  -17,623
  -22,316
  -27,755
  -33,960
  -40,937
  -48,687
  -57,201
  -66,463
  -76,457
  -87,162
  -98,558
  -110,626
  -123,348
  -136,713
  -150,710
  -165,334
  -180,584
  -196,464
  -212,982
  -230,153
  -247,994
  -266,526
  -285,777
  -305,775
Issuance/(repayment) of debt, $m
  -338
  1,194
  1,686
  2,304
  3,058
  3,949
  4,974
  6,124
  7,384
  8,738
  10,165
  11,644
  13,155
  14,679
  16,201
  17,707
  19,189
  20,641
  22,058
  23,442
  24,795
  26,120
  27,425
  28,717
  30,003
  31,292
  32,592
  33,914
  35,265
  36,655
  38,092
Issuance/(repurchase) of shares, $m
  0
  2,243
  3,298
  4,715
  6,565
  8,917
  11,835
  15,377
  19,592
  24,517
  30,179
  36,515
  43,691
  51,625
  60,310
  69,732
  79,874
  90,718
  102,248
  114,445
  127,296
  140,789
  154,917
  169,676
  185,068
  201,097
  217,774
  235,113
  253,132
  271,855
  291,308
Cash from financing (excl. dividends), $m  
  -343
  3,437
  4,984
  7,019
  9,623
  12,866
  16,809
  21,501
  26,976
  33,255
  40,344
  48,159
  56,846
  66,304
  76,511
  87,439
  99,063
  111,359
  124,306
  137,887
  152,091
  166,909
  182,342
  198,393
  215,071
  232,389
  250,366
  269,027
  288,397
  308,510
  329,400
Total cash flow (excl. dividends), $m
  -364
  821
  1,126
  1,510
  1,977
  2,529
  3,165
  3,878
  4,660
  5,500
  6,385
  7,221
  8,158
  9,104
  10,048
  10,982
  11,901
  12,801
  13,680
  14,538
  15,377
  16,200
  17,009
  17,810
  18,607
  19,407
  20,213
  21,033
  21,871
  22,733
  23,624
Retained Cash Flow (-), $m
  907
  -2,243
  -3,298
  -4,715
  -6,565
  -8,917
  -11,835
  -15,377
  -19,592
  -24,517
  -30,179
  -36,515
  -43,691
  -51,625
  -60,310
  -69,732
  -79,874
  -90,718
  -102,248
  -114,445
  -127,296
  -140,789
  -154,917
  -169,676
  -185,068
  -201,097
  -217,774
  -235,113
  -253,132
  -271,855
  -291,308
Prev. year cash balance distribution, $m
 
  188
  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
 
  -1,234
  -2,172
  -3,205
  -4,588
  -6,387
  -8,670
  -11,499
  -14,932
  -19,017
  -23,795
  -29,293
  -35,532
  -42,522
  -50,263
  -58,750
  -67,973
  -77,917
  -88,567
  -99,906
  -111,918
  -124,589
  -137,908
  -151,867
  -166,461
  -181,691
  -197,561
  -214,080
  -231,261
  -249,122
  -267,684
Discount rate, %
 
  8.40
  8.82
  9.26
  9.72
  10.21
  10.72
  11.26
  11.82
  12.41
  13.03
  13.68
  14.37
  15.09
  15.84
  16.63
  17.46
  18.34
  19.25
  20.22
  21.23
  22.29
  23.40
  24.57
  25.80
  27.09
  28.45
  29.87
  31.36
  32.93
  34.58
PV of cash for distribution, $m
 
  -1,139
  -1,834
  -2,457
  -3,165
  -3,928
  -4,706
  -5,450
  -6,109
  -6,636
  -6,990
  -7,147
  -7,096
  -6,845
  -6,416
  -5,845
  -5,175
  -4,453
  -3,722
  -3,022
  -2,382
  -1,822
  -1,351
  -970
  -674
  -453
  -294
  -185
  -111
  -65
  -36
Current shareholders' claim on cash, %
  100
  39.5
  16.1
  6.8
  2.9
  1.3
  0.6
  0.3
  0.1
  0.1
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Superior Energy Services, Inc. provides a range of services and products to the energy industry related to the exploration, development and production of oil and natural gas. The Company's segments include Drilling Products and Services, which rents and sells bottom hole assemblies, drill pipe, tubulars and specialized equipment for use with onshore and offshore oil and gas well drilling, production and workover activities; Onshore Completion and Workover Services, which provides pressure pumping services used to complete and stimulate production in new oil and gas wells, fluid handling services and well servicing rigs that provide a range of well completion and maintenance services; Production Services, which provides intervention services, such as coiled tubing, cased hole and mechanical wireline, hydraulic workover and snubbing, and remedial pumping services, and Technical Solutions, which provides services requiring specialized engineering, manufacturing or project planning.

FINANCIAL RATIOS  of  Superior Energy Services (SPN)

Valuation Ratios
P/E Ratio -1.9
Price to Sales 1.2
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 27.6
Price to Free Cash Flow -84.1
Growth Rates
Sales Growth Rate -47.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -80%
Cap. Spend. - 3 Yr. Gr. Rate -33.2%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 98.5%
Total Debt to Equity 98.5%
Interest Coverage -11
Management Effectiveness
Return On Assets -19.5%
Ret/ On Assets - 3 Yr. Avg. -14.7%
Return On Total Capital -27.6%
Ret/ On T. Cap. - 3 Yr. Avg. -20.7%
Return On Equity -50.5%
Return On Equity - 3 Yr. Avg. -34.4%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 22.6%
Gross Margin - 3 Yr. Avg. 31.8%
EBITDA Margin -34.3%
EBITDA Margin - 3 Yr. Avg. -18.9%
Operating Margin -71%
Oper. Margin - 3 Yr. Avg. -43.1%
Pre-Tax Margin -75.9%
Pre-Tax Margin - 3 Yr. Avg. -46.8%
Net Profit Margin -61.2%
Net Profit Margin - 3 Yr. Avg. -40.8%
Effective Tax Rate 24.3%
Eff/ Tax Rate - 3 Yr. Avg. 24.3%
Payout Ratio -1.4%

SPN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SPN stock intrinsic value calculation we used $1450 million for the last fiscal year's total revenue generated by Superior Energy Services. The default revenue input number comes from 2016 income statement of Superior 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 SPN stock valuation model: a) initial revenue growth rate of 55.2% 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 8.4%, whose default value for SPN is calculated based on our internal credit rating of Superior 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 Superior 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 SPN stock the variable cost ratio is equal to 169.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $21 million in the base year in the intrinsic value calculation for SPN 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 6.4% for Superior Energy Services.

Corporate tax rate of 27% is the nominal tax rate for Superior 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 SPN 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 SPN are equal to 140.2%.

Life of production assets of 5.9 years is the average useful life of capital assets used in Superior 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 SPN is equal to 17.2%. 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 - $1304 million for Superior 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 154.725 million for Superior 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 Superior Energy Services at the current share price and the inputted number of shares is $1.7 billion.

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COMPANY NEWS

▶ Short Interest in Halliburton on January 4   [Jan-11-18 09:02AM  Market Realist]
▶ Analyzing Halliburtons Revenue and Earnings in 3Q17   [Jan-10-18 02:00PM  Market Realist]
▶ The Top Oilfield Services Free Cash Earner in 3Q17   [Dec-27-17 02:35PM  Market Realist]
▶ Best Sectors to Sell Short in 2017   [Dec-07-17 12:21PM  Investopedia]
▶ Oilfield Services Gainers: BAS, SPN, BHGE, IO, and NOV   [Nov-08-17 02:40PM  Market Realist]
▶ WFT, FMSA, and SPN: Returns and Outlook after 3Q17   [Nov-07-17 10:30AM  Market Realist]
▶ Why Weatherfords 3Q17 Earnings Beat Estimates   [09:03AM  Market Realist]
▶ Superior Energy reports 3Q loss   [Oct-23-17 04:47PM  Associated Press]
▶ Gauging Short Interest in SPN, HAL, NOV, FMSA, and PTEN   [Aug-29-17 10:39AM  Market Realist]
▶ Why Superior Energy Services Free Cash Growth Beats Peers   [Aug-28-17 05:35PM  Market Realist]
▶ Analyzing Fairmount Santrols 2Q17 Segmental Performance   [Aug-04-17 03:05PM  Market Realist]
▶ Basic Energy Services 2Q17 Earnings Beat Estimates   [Aug-02-17 06:05PM  Market Realist]
▶ Superior Energy reports 2Q loss   [Jul-25-17 10:32PM  Associated Press]
▶ SESI, L.L.C. -- Moody's downgrades SESI to B2   [Jul-19-17 03:06PM  Moody's]
▶ What Affected Basic Energy Services Earnings in 1Q17?   [May-10-17 09:07AM  Market Realist]
▶ Weekly CEO Buys Highlight   [May-08-17 01:40PM  GuruFocus.com]
▶ Superior Energy reports 1Q loss   [Apr-25-17 04:46PM  Associated Press]
▶ Inside Superior Energys Stock Forecast for the Next 7 Days   [Apr-13-17 10:36AM  Market Realist]
▶ What Happened to Superior Energy in 4Q16?   [07:38AM  Market Realist]
▶ Superior Energys 1Q17 Earnings: What the Analysts Expect   [Apr-12-17 05:35PM  Market Realist]
▶ [$$] Three Energy Picks Post Earnings   [Mar-02-17 10:54AM  at Barrons.com]
Financial statements of SPN
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