Intrinsic value of Ultra Petroleum - UPL

Previous Close

$1.81

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$1.81

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of UPL 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 0.4

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  910
  931
  955
  981
  1,011
  1,044
  1,079
  1,118
  1,159
  1,204
  1,251
  1,302
  1,356
  1,414
  1,475
  1,539
  1,608
  1,680
  1,757
  1,837
  1,922
  2,012
  2,107
  2,207
  2,312
  2,422
  2,539
  2,661
  2,790
  2,926
Variable operating expenses, $m
  388
  396
  407
  418
  431
  445
  460
  476
  494
  513
  533
  555
  578
  602
  628
  656
  685
  716
  748
  783
  819
  857
  898
  940
  985
  1,032
  1,081
  1,134
  1,189
  1,246
Fixed operating expenses, $m
  120
  122
  125
  128
  130
  133
  136
  139
  142
  145
  149
  152
  155
  159
  162
  166
  169
  173
  177
  181
  185
  189
  193
  197
  202
  206
  211
  215
  220
  225
Total operating expenses, $m
  508
  518
  532
  546
  561
  578
  596
  615
  636
  658
  682
  707
  733
  761
  790
  822
  854
  889
  925
  964
  1,004
  1,046
  1,091
  1,137
  1,187
  1,238
  1,292
  1,349
  1,409
  1,471
Operating income, $m
  403
  412
  423
  436
  450
  466
  483
  502
  523
  546
  570
  596
  623
  653
  684
  718
  753
  791
  831
  874
  919
  966
  1,016
  1,069
  1,125
  1,184
  1,247
  1,312
  1,382
  1,455
EBITDA, $m
  567
  580
  595
  613
  633
  654
  678
  704
  733
  763
  796
  831
  868
  908
  951
  996
  1,044
  1,095
  1,149
  1,206
  1,266
  1,330
  1,397
  1,468
  1,543
  1,622
  1,705
  1,793
  1,886
  1,983
Interest expense (income), $m
  0
  724
  286
  297
  309
  323
  339
  356
  375
  395
  416
  439
  464
  491
  519
  549
  581
  614
  650
  688
  728
  770
  814
  861
  911
  963
  1,017
  1,075
  1,136
  1,200
  1,267
Earnings before tax, $m
  -321
  126
  126
  126
  127
  127
  127
  128
  129
  129
  130
  131
  132
  134
  135
  137
  139
  141
  143
  146
  149
  152
  155
  159
  163
  167
  172
  176
  182
  188
Tax expense, $m
  0
  34
  34
  34
  34
  34
  34
  35
  35
  35
  35
  35
  36
  36
  37
  37
  38
  38
  39
  39
  40
  41
  42
  43
  44
  45
  46
  48
  49
  51
Net income, $m
  -321
  92
  92
  92
  92
  93
  93
  93
  94
  94
  95
  96
  97
  98
  99
  100
  101
  103
  105
  107
  109
  111
  113
  116
  119
  122
  125
  129
  133
  137

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
  1,542
  1,577
  1,618
  1,663
  1,714
  1,769
  1,829
  1,895
  1,965
  2,040
  2,121
  2,207
  2,299
  2,396
  2,499
  2,609
  2,725
  2,848
  2,977
  3,114
  3,258
  3,410
  3,571
  3,740
  3,918
  4,105
  4,303
  4,510
  4,729
  4,959
Adjusted assets (=assets-cash), $m
  1,542
  1,577
  1,618
  1,663
  1,714
  1,769
  1,829
  1,895
  1,965
  2,040
  2,121
  2,207
  2,299
  2,396
  2,499
  2,609
  2,725
  2,848
  2,977
  3,114
  3,258
  3,410
  3,571
  3,740
  3,918
  4,105
  4,303
  4,510
  4,729
  4,959
Revenue / Adjusted assets
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
Average production assets, $m
  1,200
  1,228
  1,259
  1,294
  1,334
  1,377
  1,424
  1,474
  1,529
  1,588
  1,651
  1,718
  1,789
  1,865
  1,945
  2,030
  2,121
  2,216
  2,317
  2,423
  2,536
  2,654
  2,779
  2,910
  3,049
  3,195
  3,348
  3,510
  3,680
  3,859
Working capital, $m
  -118
  -121
  -124
  -128
  -131
  -136
  -140
  -145
  -151
  -156
  -163
  -169
  -176
  -184
  -192
  -200
  -209
  -218
  -228
  -239
  -250
  -262
  -274
  -287
  -301
  -315
  -330
  -346
  -363
  -380
Total debt, $m
  836
  868
  905
  946
  991
  1,041
  1,095
  1,154
  1,217
  1,285
  1,357
  1,435
  1,517
  1,605
  1,698
  1,797
  1,901
  2,011
  2,128
  2,251
  2,381
  2,518
  2,662
  2,815
  2,975
  3,144
  3,321
  3,508
  3,705
  3,911
Total liabilities, $m
  1,388
  1,420
  1,456
  1,497
  1,542
  1,592
  1,646
  1,705
  1,768
  1,836
  1,909
  1,986
  2,069
  2,156
  2,250
  2,348
  2,452
  2,563
  2,679
  2,803
  2,932
  3,069
  3,214
  3,366
  3,526
  3,695
  3,873
  4,059
  4,256
  4,463
Total equity, $m
  154
  158
  162
  166
  171
  177
  183
  189
  196
  204
  212
  221
  230
  240
  250
  261
  272
  285
  298
  311
  326
  341
  357
  374
  392
  411
  430
  451
  473
  496
Total liabilities and equity, $m
  1,542
  1,578
  1,618
  1,663
  1,713
  1,769
  1,829
  1,894
  1,964
  2,040
  2,121
  2,207
  2,299
  2,396
  2,500
  2,609
  2,724
  2,848
  2,977
  3,114
  3,258
  3,410
  3,571
  3,740
  3,918
  4,106
  4,303
  4,510
  4,729
  4,959
Debt-to-equity ratio
  5.420
  5.500
  5.590
  5.690
  5.780
  5.880
  5.990
  6.090
  6.190
  6.300
  6.400
  6.500
  6.600
  6.700
  6.790
  6.890
  6.980
  7.060
  7.150
  7.230
  7.310
  7.380
  7.460
  7.530
  7.590
  7.660
  7.720
  7.780
  7.830
  7.890
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
  -321
  92
  92
  92
  92
  93
  93
  93
  94
  94
  95
  96
  97
  98
  99
  100
  101
  103
  105
  107
  109
  111
  113
  116
  119
  122
  125
  129
  133
  137
Depreciation, amort., depletion, $m
  164
  168
  172
  177
  183
  189
  195
  202
  209
  218
  226
  235
  245
  255
  266
  278
  290
  304
  317
  332
  347
  364
  381
  399
  418
  438
  459
  481
  504
  529
Funds from operations, $m
  -157
  260
  265
  270
  275
  281
  288
  295
  303
  312
  321
  331
  342
  353
  365
  378
  392
  407
  422
  439
  456
  474
  494
  515
  536
  560
  584
  610
  637
  666
Change in working capital, $m
  -2
  -3
  -3
  -3
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
Cash from operations, $m
  -154
  263
  268
  273
  279
  285
  293
  300
  309
  318
  327
  338
  349
  361
  373
  387
  401
  416
  432
  449
  467
  486
  506
  528
  550
  574
  599
  626
  654
  683
Maintenance CAPEX, $m
  -161
  -164
  -168
  -172
  -177
  -183
  -189
  -195
  -202
  -209
  -218
  -226
  -235
  -245
  -255
  -266
  -278
  -290
  -304
  -317
  -332
  -347
  -364
  -381
  -399
  -418
  -438
  -459
  -481
  -504
New CAPEX, $m
  -24
  -28
  -32
  -35
  -39
  -43
  -47
  -51
  -55
  -59
  -63
  -67
  -71
  -76
  -80
  -85
  -90
  -95
  -101
  -106
  -112
  -118
  -125
  -132
  -139
  -146
  -154
  -162
  -170
  -179
Cash from investing activities, $m
  -185
  -192
  -200
  -207
  -216
  -226
  -236
  -246
  -257
  -268
  -281
  -293
  -306
  -321
  -335
  -351
  -368
  -385
  -405
  -423
  -444
  -465
  -489
  -513
  -538
  -564
  -592
  -621
  -651
  -683
Free cash flow, $m
  -339
  71
  68
  65
  62
  60
  57
  55
  52
  50
  47
  45
  42
  40
  37
  35
  32
  30
  28
  25
  23
  20
  18
  15
  13
  10
  8
  5
  3
  0
Issuance/(repayment) of debt, $m
  -1,280
  32
  36
  41
  45
  50
  54
  59
  63
  68
  73
  77
  82
  88
  93
  99
  104
  110
  117
  123
  130
  137
  144
  152
  160
  169
  178
  187
  197
  207
Issuance/(repurchase) of shares, $m
  1,630
  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  
  350
  32
  36
  41
  45
  50
  54
  59
  63
  68
  73
  77
  82
  88
  93
  99
  104
  110
  117
  123
  130
  137
  144
  152
  160
  169
  178
  187
  197
  207
Total cash flow (excl. dividends), $m
  11
  103
  104
  106
  108
  110
  111
  113
  115
  117
  120
  122
  125
  127
  130
  133
  137
  140
  144
  148
  153
  157
  162
  167
  173
  179
  185
  192
  199
  207
Retained Cash Flow (-), $m
  -1,630
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
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
  -1,619
  99
  100
  102
  103
  104
  105
  107
  108
  110
  112
  113
  116
  118
  120
  123
  125
  128
  131
  135
  138
  142
  146
  151
  155
  160
  166
  171
  178
  184
Discount rate, %
  15.30
  16.07
  16.87
  17.71
  18.60
  19.53
  20.50
  21.53
  22.61
  23.74
  24.92
  26.17
  27.48
  28.85
  30.29
  31.81
  33.40
  35.07
  36.82
  38.66
  40.60
  42.63
  44.76
  46.99
  49.34
  51.81
  54.40
  57.12
  59.98
  62.98
PV of cash for distribution, $m
  -1,404
  74
  63
  53
  44
  36
  29
  22
  17
  13
  10
  7
  5
  3
  2
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  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

FINANCIAL RATIOS  of  Ultra Petroleum (UPL)

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%

UPL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the UPL stock intrinsic value calculation we used $891.873 million for the last fiscal year's total revenue generated by Ultra Petroleum. The default revenue input number comes from 0001 income statement of Ultra Petroleum. 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 UPL stock valuation model: a) initial revenue growth rate of 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 15.3%, whose default value for UPL is calculated based on our internal credit rating of Ultra Petroleum, 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 Ultra Petroleum.
    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 UPL stock the variable cost ratio is equal to 42.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $117 million in the base year in the intrinsic value calculation for UPL 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 34.2% for Ultra Petroleum.

Corporate tax rate of 27% is the nominal tax rate for Ultra Petroleum. 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 UPL 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 UPL are equal to 131.9%.

Life of production assets of 7.3 years is the average useful life of capital assets used in Ultra Petroleum 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 UPL is equal to -13%. 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 - $-1154.636 million for Ultra Petroleum - 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 197.055 million for Ultra Petroleum 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 Ultra Petroleum at the current share price and the inputted number of shares is $0.4 billion.

COMPANY NEWS

▶ Ultra Petroleum: 3Q Earnings Snapshot   [10:34AM  Associated Press]
▶ [$$] Sycamore Settles Potential Nine West Suits for $105 Million   [Oct-19-18 11:21AM  The Wall Street Journal]
▶ [$$] Ultra Petroleum Still Fixing Balance Sheet   [Oct-18-18 05:45PM  The Wall Street Journal]
▶ [$$] Banks Cut Ultra Petroleum's Borrowing Base   [Sep-26-18 04:41PM  The Wall Street Journal]
▶ 3 Energy Stocks That Desperately Need New Management   [Sep-15-18 08:34AM  Motley Fool]
▶ Ultra Petroleum: 2Q Earnings Snapshot   [09:31AM  Associated Press]
▶ Why This Energy Driller's Shares Nosedived 23% in July   [Aug-06-18 10:10AM  Motley Fool]
▶ Here's Why Ultra Petroleum Stock Fell 26.4% in May   [Jun-08-18 10:05AM  Motley Fool]
▶ Ultra Petroleum Names Jay Stratton Chief Operating Officer   [May-31-18 08:15AM  GlobeNewswire]
▶ Houston oil and gas company moving headquarters to Denver area   [07:55AM  American City Business Journals]
▶ [$$] Companies to Watch - May 21, 2018   [May-21-18 01:09PM  The Wall Street Journal]
▶ Why Ultra Petroleum Corp's Stock Is Plunging Again Today   [May-11-18 03:58PM  Motley Fool]
▶ Ultra Petroleum: 1Q Earnings Snapshot   [May-10-18 09:01AM  Associated Press]
▶ New Strong Sell Stocks for April 24th   [Apr-24-18 09:52AM  Zacks]
▶ Why Ultra Petroleum Corp's Stock Is Plunging Today   [Apr-20-18 03:17PM  Motley Fool]
▶ [$$] How Two Wells in Wyoming Explain the Natural-Gas Glut   [Mar-22-18 01:08AM  The Wall Street Journal]
▶ [$$] Two Wells in Wyoming Help Explain the Natural-Gas Glut   [Mar-21-18 04:37PM  The Wall Street Journal]
▶ Ultra Petroleum posts 4Q profit   [10:05AM  Associated Press]
▶ Global Crude Oil Supply Outages Are near a 4-Month High   [Jan-18-18 08:53AM  Market Realist]
▶ Houston energy co. sells Marcellus acreage for $115M   [Dec-26-17 01:10PM  American City Business Journals]
▶ These Stocks Are Showing Reversal Patterns   [Nov-27-17 02:00PM  TheStreet.com]
▶ Ultra Petroleum reports 3Q loss   [Nov-07-17 09:33AM  Associated Press]
▶ Ultra Petroleum Corp. to Webcast Third Quarter 2017 Results   [Oct-04-17 04:30PM  GlobeNewswire]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.