Intrinsic value of U.S. Well Services, Inc. - USWS

Previous Close

$2.57

  Intrinsic Value

$18.20

stock screener

  Rating & Target

str. buy

+608%

Previous close

$2.57

 
Intrinsic value

$18.20

 
Up/down potential

+608%

 
Rating

str. buy

We calculate the intrinsic value of USWS 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, %
  39.10
  35.69
  32.62
  29.86
  27.37
  25.14
  23.12
  21.31
  19.68
  18.21
  16.89
  15.70
  14.63
  13.67
  12.80
  12.02
  11.32
  10.69
  10.12
  9.61
  9.15
  8.73
  8.36
  8.02
  7.72
  7.45
  7.20
  6.98
  6.78
  6.61
Revenue, $m
  903
  1,225
  1,625
  2,110
  2,687
  3,363
  4,140
  5,022
  6,011
  7,105
  8,305
  9,609
  11,015
  12,521
  14,123
  15,821
  17,612
  19,494
  21,466
  23,529
  25,680
  27,923
  30,256
  32,684
  35,207
  37,829
  40,554
  43,386
  46,329
  49,390
Variable operating expenses, $m
  737
  999
  1,324
  1,718
  2,188
  2,737
  3,369
  4,086
  4,889
  5,779
  6,751
  7,811
  8,954
  10,178
  11,481
  12,861
  14,317
  15,847
  17,450
  19,127
  20,876
  22,699
  24,596
  26,569
  28,620
  30,752
  32,967
  35,269
  37,662
  40,150
Fixed operating expenses, $m
  161
  165
  169
  172
  176
  180
  184
  188
  192
  196
  201
  205
  210
  214
  219
  224
  229
  234
  239
  244
  250
  255
  261
  266
  272
  278
  284
  291
  297
  304
Total operating expenses, $m
  898
  1,164
  1,493
  1,890
  2,364
  2,917
  3,553
  4,274
  5,081
  5,975
  6,952
  8,016
  9,164
  10,392
  11,700
  13,085
  14,546
  16,081
  17,689
  19,371
  21,126
  22,954
  24,857
  26,835
  28,892
  31,030
  33,251
  35,560
  37,959
  40,454
Operating income, $m
  4
  61
  132
  219
  323
  446
  587
  748
  929
  1,130
  1,353
  1,593
  1,851
  2,128
  2,423
  2,736
  3,066
  3,413
  3,777
  4,158
  4,555
  4,969
  5,400
  5,848
  6,314
  6,799
  7,303
  7,826
  8,371
  8,937
EBITDA, $m
  94
  181
  290
  424
  583
  770
  985
  1,231
  1,506
  1,811
  2,145
  2,509
  2,902
  3,323
  3,771
  4,245
  4,746
  5,273
  5,825
  6,402
  7,005
  7,633
  8,286
  8,966
  9,673
  10,408
  11,172
  11,965
  12,790
  13,648
Interest expense (income), $m
  0
  22
  43
  69
  102
  142
  189
  245
  309
  381
  462
  552
  650
  757
  873
  996
  1,128
  1,267
  1,414
  1,568
  1,730
  1,899
  2,076
  2,260
  2,451
  2,650
  2,857
  3,072
  3,296
  3,528
  3,770
Earnings before tax, $m
  -18
  18
  63
  117
  181
  256
  342
  440
  548
  668
  801
  942
  1,094
  1,256
  1,427
  1,608
  1,799
  1,999
  2,209
  2,428
  2,656
  2,893
  3,140
  3,397
  3,664
  3,942
  4,230
  4,530
  4,842
  5,167
Tax expense, $m
  0
  5
  17
  32
  49
  69
  92
  119
  148
  180
  216
  254
  295
  339
  385
  434
  486
  540
  596
  655
  717
  781
  848
  917
  989
  1,064
  1,142
  1,223
  1,307
  1,395
Net income, $m
  -18
  13
  46
  85
  132
  187
  250
  321
  400
  487
  585
  688
  798
  917
  1,042
  1,174
  1,313
  1,460
  1,612
  1,772
  1,939
  2,112
  2,292
  2,480
  2,675
  2,877
  3,088
  3,307
  3,535
  3,772

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
  668
  907
  1,202
  1,562
  1,989
  2,489
  3,064
  3,717
  4,449
  5,259
  6,147
  7,113
  8,153
  9,268
  10,454
  11,711
  13,036
  14,429
  15,889
  17,416
  19,008
  20,668
  22,396
  24,192
  26,060
  28,001
  30,018
  32,114
  34,293
  36,558
Adjusted assets (=assets-cash), $m
  668
  907
  1,202
  1,562
  1,989
  2,489
  3,064
  3,717
  4,449
  5,259
  6,147
  7,113
  8,153
  9,268
  10,454
  11,711
  13,036
  14,429
  15,889
  17,416
  19,008
  20,668
  22,396
  24,192
  26,060
  28,001
  30,018
  32,114
  34,293
  36,558
Revenue / Adjusted assets
  1.352
  1.351
  1.352
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
  1.351
Average production assets, $m
  431
  584
  775
  1,006
  1,282
  1,604
  1,975
  2,396
  2,867
  3,389
  3,962
  4,584
  5,254
  5,972
  6,737
  7,547
  8,401
  9,299
  10,239
  11,223
  12,250
  13,319
  14,432
  15,590
  16,794
  18,044
  19,344
  20,695
  22,099
  23,559
Working capital, $m
  -36
  -49
  -65
  -84
  -107
  -135
  -166
  -201
  -240
  -284
  -332
  -384
  -441
  -501
  -565
  -633
  -704
  -780
  -859
  -941
  -1,027
  -1,117
  -1,210
  -1,307
  -1,408
  -1,513
  -1,622
  -1,735
  -1,853
  -1,976
Total debt, $m
  236
  381
  562
  780
  1,041
  1,345
  1,695
  2,093
  2,539
  3,032
  3,573
  4,161
  4,795
  5,473
  6,196
  6,961
  7,768
  8,617
  9,506
  10,435
  11,405
  12,416
  13,468
  14,562
  15,700
  16,882
  18,110
  19,387
  20,713
  22,093
Total liabilities, $m
  407
  552
  732
  951
  1,211
  1,516
  1,866
  2,264
  2,709
  3,203
  3,744
  4,332
  4,965
  5,644
  6,366
  7,132
  7,939
  8,787
  9,677
  10,606
  11,576
  12,587
  13,639
  14,733
  15,870
  17,052
  18,281
  19,557
  20,884
  22,264
Total equity, $m
  261
  355
  470
  611
  778
  973
  1,198
  1,454
  1,740
  2,056
  2,404
  2,781
  3,188
  3,624
  4,087
  4,579
  5,097
  5,642
  6,213
  6,810
  7,432
  8,081
  8,757
  9,459
  10,189
  10,948
  11,737
  12,557
  13,408
  14,294
Total liabilities and equity, $m
  668
  907
  1,202
  1,562
  1,989
  2,489
  3,064
  3,718
  4,449
  5,259
  6,148
  7,113
  8,153
  9,268
  10,453
  11,711
  13,036
  14,429
  15,890
  17,416
  19,008
  20,668
  22,396
  24,192
  26,059
  28,000
  30,018
  32,114
  34,292
  36,558
Debt-to-equity ratio
  0.900
  1.080
  1.190
  1.280
  1.340
  1.380
  1.420
  1.440
  1.460
  1.470
  1.490
  1.500
  1.500
  1.510
  1.520
  1.520
  1.520
  1.530
  1.530
  1.530
  1.530
  1.540
  1.540
  1.540
  1.540
  1.540
  1.540
  1.540
  1.540
  1.550
Adjusted equity ratio
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -18
  13
  46
  85
  132
  187
  250
  321
  400
  487
  585
  688
  798
  917
  1,042
  1,174
  1,313
  1,460
  1,612
  1,772
  1,939
  2,112
  2,292
  2,480
  2,675
  2,877
  3,088
  3,307
  3,535
  3,772
Depreciation, amort., depletion, $m
  89
  120
  158
  205
  260
  324
  398
  482
  577
  681
  792
  917
  1,051
  1,194
  1,347
  1,509
  1,680
  1,860
  2,048
  2,245
  2,450
  2,664
  2,886
  3,118
  3,359
  3,609
  3,869
  4,139
  4,420
  4,712
Funds from operations, $m
  71
  133
  204
  290
  392
  511
  648
  803
  977
  1,168
  1,377
  1,605
  1,849
  2,111
  2,389
  2,684
  2,994
  3,319
  3,660
  4,017
  4,389
  4,776
  5,179
  5,598
  6,034
  6,486
  6,957
  7,446
  7,955
  8,484
Change in working capital, $m
  -10
  -13
  -16
  -19
  -23
  -27
  -31
  -35
  -40
  -44
  -48
  -52
  -56
  -60
  -64
  -68
  -72
  -75
  -79
  -82
  -86
  -90
  -93
  -97
  -101
  -105
  -109
  -113
  -118
  -122
Cash from operations, $m
  82
  146
  220
  309
  415
  538
  679
  839
  1,016
  1,212
  1,425
  1,657
  1,906
  2,171
  2,453
  2,751
  3,065
  3,395
  3,739
  4,099
  4,475
  4,865
  5,272
  5,695
  6,134
  6,591
  7,066
  7,559
  8,072
  8,606
Maintenance CAPEX, $m
  -62
  -86
  -117
  -155
  -201
  -256
  -321
  -395
  -479
  -573
  -678
  -792
  -917
  -1,051
  -1,194
  -1,347
  -1,509
  -1,680
  -1,860
  -2,048
  -2,245
  -2,450
  -2,664
  -2,886
  -3,118
  -3,359
  -3,609
  -3,869
  -4,139
  -4,420
New CAPEX, $m
  -121
  -154
  -191
  -231
  -275
  -322
  -371
  -421
  -471
  -522
  -572
  -622
  -671
  -718
  -765
  -810
  -854
  -898
  -941
  -984
  -1,026
  -1,070
  -1,113
  -1,158
  -1,204
  -1,251
  -1,300
  -1,351
  -1,404
  -1,460
Cash from investing activities, $m
  -183
  -240
  -308
  -386
  -476
  -578
  -692
  -816
  -950
  -1,095
  -1,250
  -1,414
  -1,588
  -1,769
  -1,959
  -2,157
  -2,363
  -2,578
  -2,801
  -3,032
  -3,271
  -3,520
  -3,777
  -4,044
  -4,322
  -4,610
  -4,909
  -5,220
  -5,543
  -5,880
Free cash flow, $m
  -101
  -94
  -88
  -77
  -62
  -40
  -12
  23
  66
  117
  175
  242
  318
  402
  494
  594
  702
  817
  939
  1,068
  1,204
  1,346
  1,495
  1,651
  1,813
  1,982
  2,157
  2,340
  2,529
  2,726
Issuance/(repayment) of debt, $m
  114
  145
  180
  219
  260
  304
  350
  398
  446
  493
  541
  588
  634
  679
  722
  765
  807
  848
  889
  930
  970
  1,011
  1,052
  1,094
  1,137
  1,182
  1,228
  1,277
  1,327
  1,380
Issuance/(repurchase) of shares, $m
  92
  80
  70
  55
  35
  8
  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  
  206
  225
  250
  274
  295
  312
  350
  398
  446
  493
  541
  588
  634
  679
  722
  765
  807
  848
  889
  930
  970
  1,011
  1,052
  1,094
  1,137
  1,182
  1,228
  1,277
  1,327
  1,380
Total cash flow (excl. dividends), $m
  105
  132
  163
  197
  233
  273
  338
  421
  511
  610
  716
  830
  952
  1,081
  1,217
  1,360
  1,509
  1,665
  1,828
  1,997
  2,174
  2,357
  2,547
  2,745
  2,950
  3,164
  3,386
  3,616
  3,856
  4,106
Retained Cash Flow (-), $m
  -92
  -93
  -116
  -140
  -167
  -195
  -225
  -255
  -286
  -317
  -347
  -377
  -407
  -436
  -464
  -491
  -518
  -545
  -571
  -597
  -623
  -649
  -675
  -702
  -730
  -759
  -789
  -820
  -852
  -886
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
  13
  38
  47
  56
  66
  77
  113
  165
  225
  293
  369
  453
  545
  645
  753
  868
  991
  1,120
  1,257
  1,400
  1,551
  1,708
  1,872
  2,042
  2,220
  2,405
  2,597
  2,797
  3,004
  3,220
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  13
  35
  41
  46
  51
  56
  76
  103
  129
  154
  175
  193
  207
  217
  221
  221
  216
  206
  194
  178
  160
  142
  123
  104
  86
  70
  56
  43
  33
  24
Current shareholders' claim on cash, %
  64.4
  47.8
  39.1
  34.5
  32.4
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1
  32.1

FINANCIAL RATIOS  of  U.S. Well Services, Inc. (USWS)

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%

USWS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the USWS stock intrinsic value calculation we used $649 million for the last fiscal year's total revenue generated by U.S. Well Services, Inc.. The default revenue input number comes from 0001 income statement of U.S. Well Services, Inc.. 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 USWS stock valuation model: a) initial revenue growth rate of 39.1% 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 4.3%, whose default value for USWS is calculated based on our internal credit rating of U.S. Well Services, Inc., 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 U.S. Well Services, Inc..
    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 USWS stock the variable cost ratio is equal to 81.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $158 million in the base year in the intrinsic value calculation for USWS 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 18.2% for U.S. Well Services, Inc..

Corporate tax rate of 27% is the nominal tax rate for U.S. Well Services, Inc.. 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 USWS 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 USWS are equal to 47.7%.

Life of production assets of 3 years is the average useful life of capital assets used in U.S. Well Services, Inc. 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 USWS is equal to -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 - $187.551 million for U.S. Well Services, Inc. - 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 64.627 million for U.S. Well Services, Inc. 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 U.S. Well Services, Inc. at the current share price and the inputted number of shares is $0.2 billion.

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