Intrinsic value of WildHorse Resource Development - WRD

Previous Close

$22.17

  Intrinsic Value

$2.81

stock screener

  Rating & Target

str. sell

-87%

Previous close

$22.17

 
Intrinsic value

$2.81

 
Up/down potential

-87%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as WRD.

We calculate the intrinsic value of WRD 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 2.3

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  683
  1,056
  1,579
  2,291
  3,233
  4,444
  5,966
  7,833
  10,080
  12,731
  15,810
  19,329
  23,298
  27,720
  32,593
  37,914
  43,674
  49,863
  56,473
  63,492
  70,912
  78,725
  86,925
  95,509
  104,475
  113,823
  123,559
  133,689
  144,222
  155,169
Variable operating expenses, $m
  407
  628
  940
  1,363
  1,924
  2,644
  3,550
  4,661
  5,997
  7,575
  9,407
  11,501
  13,862
  16,493
  19,393
  22,559
  25,986
  29,669
  33,601
  37,778
  42,193
  46,842
  51,721
  56,828
  62,162
  67,725
  73,518
  79,545
  85,812
  92,326
Fixed operating expenses, $m
  71
  72
  74
  75
  77
  79
  80
  82
  84
  86
  88
  90
  92
  94
  96
  98
  100
  102
  104
  107
  109
  111
  114
  116
  119
  121
  124
  127
  130
  133
Total operating expenses, $m
  478
  700
  1,014
  1,438
  2,001
  2,723
  3,630
  4,743
  6,081
  7,661
  9,495
  11,591
  13,954
  16,587
  19,489
  22,657
  26,086
  29,771
  33,705
  37,885
  42,302
  46,953
  51,835
  56,944
  62,281
  67,846
  73,642
  79,672
  85,942
  92,459
Operating income, $m
  206
  356
  566
  853
  1,232
  1,721
  2,336
  3,090
  3,998
  5,070
  6,315
  7,739
  9,344
  11,133
  13,105
  15,257
  17,588
  20,092
  22,767
  25,608
  28,610
  31,772
  35,091
  38,565
  42,193
  45,977
  49,917
  54,017
  58,280
  62,711
EBITDA, $m
  475
  770
  1,186
  1,753
  2,502
  3,467
  4,679
  6,167
  7,958
  10,071
  12,525
  15,331
  18,495
  22,021
  25,907
  30,149
  34,742
  39,678
  44,949
  50,546
  56,464
  62,695
  69,234
  76,080
  83,230
  90,685
  98,450
  106,529
  114,929
  123,659
Interest expense (income), $m
  7
  48
  104
  185
  299
  454
  659
  923
  1,254
  1,660
  2,149
  2,726
  3,396
  4,162
  5,026
  5,988
  7,049
  8,207
  9,460
  10,807
  12,246
  13,773
  15,388
  17,089
  18,873
  20,741
  22,693
  24,727
  26,846
  29,051
  31,343
Earnings before tax, $m
  158
  252
  381
  554
  778
  1,063
  1,413
  1,837
  2,338
  2,922
  3,589
  4,343
  5,182
  6,107
  7,117
  8,209
  9,381
  10,632
  11,960
  13,362
  14,837
  16,384
  18,002
  19,691
  21,452
  23,284
  25,190
  27,171
  29,229
  31,368
Tax expense, $m
  43
  68
  103
  150
  210
  287
  382
  496
  631
  789
  969
  1,172
  1,399
  1,649
  1,921
  2,216
  2,533
  2,871
  3,229
  3,608
  4,006
  4,424
  4,861
  5,317
  5,792
  6,287
  6,801
  7,336
  7,892
  8,469
Net income, $m
  115
  184
  278
  404
  568
  776
  1,032
  1,341
  1,707
  2,133
  2,620
  3,170
  3,783
  4,458
  5,195
  5,992
  6,848
  7,762
  8,731
  9,754
  10,831
  11,960
  13,142
  14,375
  15,660
  16,998
  18,389
  19,835
  21,337
  22,898

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
  4,438
  6,857
  10,255
  14,879
  20,993
  28,860
  38,739
  50,866
  65,453
  82,672
  102,660
  125,511
  151,283
  179,997
  211,645
  246,194
  283,595
  323,787
  366,705
  412,286
  460,468
  511,203
  564,451
  620,189
  678,407
  739,113
  802,334
  868,111
  936,505
  1,007,591
Adjusted assets (=assets-cash), $m
  4,438
  6,857
  10,255
  14,879
  20,993
  28,860
  38,739
  50,866
  65,453
  82,672
  102,660
  125,511
  151,283
  179,997
  211,645
  246,194
  283,595
  323,787
  366,705
  412,286
  460,468
  511,203
  564,451
  620,189
  678,407
  739,113
  802,334
  868,111
  936,505
  1,007,591
Revenue / Adjusted assets
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
Average production assets, $m
  3,275
  5,060
  7,568
  10,981
  15,492
  21,298
  28,588
  37,538
  48,302
  61,009
  75,760
  92,623
  111,642
  132,832
  156,187
  181,683
  209,284
  238,944
  270,617
  304,254
  339,811
  377,251
  416,547
  457,679
  500,642
  545,442
  592,097
  640,638
  691,111
  743,570
Working capital, $m
  -265
  -410
  -613
  -889
  -1,254
  -1,724
  -2,315
  -3,039
  -3,911
  -4,940
  -6,134
  -7,500
  -9,039
  -10,755
  -12,646
  -14,711
  -16,945
  -19,347
  -21,911
  -24,635
  -27,514
  -30,545
  -33,727
  -37,058
  -40,536
  -44,164
  -47,941
  -51,871
  -55,958
  -60,206
Total debt, $m
  1,824
  3,247
  5,244
  7,964
  11,558
  16,184
  21,993
  29,124
  37,701
  47,826
  59,578
  73,015
  88,169
  105,053
  123,662
  143,976
  165,968
  189,601
  214,837
  241,639
  269,970
  299,802
  331,112
  363,885
  398,118
  433,813
  470,987
  509,664
  549,879
  591,678
Total liabilities, $m
  2,610
  4,032
  6,030
  8,749
  12,344
  16,970
  22,778
  29,909
  38,486
  48,611
  60,364
  73,801
  88,955
  105,838
  124,447
  144,762
  166,754
  190,387
  215,623
  242,424
  270,755
  300,587
  331,897
  364,671
  398,903
  434,599
  471,772
  510,449
  550,665
  592,463
Total equity, $m
  1,829
  2,825
  4,225
  6,130
  8,649
  11,890
  15,960
  20,957
  26,966
  34,061
  42,296
  51,711
  62,329
  74,159
  87,198
  101,432
  116,841
  133,400
  151,083
  169,862
  189,713
  210,616
  232,554
  255,518
  279,504
  304,515
  330,562
  357,662
  385,840
  415,127
Total liabilities and equity, $m
  4,439
  6,857
  10,255
  14,879
  20,993
  28,860
  38,738
  50,866
  65,452
  82,672
  102,660
  125,512
  151,284
  179,997
  211,645
  246,194
  283,595
  323,787
  366,706
  412,286
  460,468
  511,203
  564,451
  620,189
  678,407
  739,114
  802,334
  868,111
  936,505
  1,007,590
Debt-to-equity ratio
  1.000
  1.150
  1.240
  1.300
  1.340
  1.360
  1.380
  1.390
  1.400
  1.400
  1.410
  1.410
  1.410
  1.420
  1.420
  1.420
  1.420
  1.420
  1.420
  1.420
  1.420
  1.420
  1.420
  1.420
  1.420
  1.420
  1.420
  1.420
  1.430
  1.430
Adjusted equity ratio
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  115
  184
  278
  404
  568
  776
  1,032
  1,341
  1,707
  2,133
  2,620
  3,170
  3,783
  4,458
  5,195
  5,992
  6,848
  7,762
  8,731
  9,754
  10,831
  11,960
  13,142
  14,375
  15,660
  16,998
  18,389
  19,835
  21,337
  22,898
Depreciation, amort., depletion, $m
  268
  415
  620
  900
  1,270
  1,746
  2,343
  3,077
  3,959
  5,001
  6,210
  7,592
  9,151
  10,888
  12,802
  14,892
  17,154
  19,586
  22,182
  24,939
  27,853
  30,922
  34,143
  37,515
  41,036
  44,708
  48,533
  52,511
  56,648
  60,948
Funds from operations, $m
  384
  598
  898
  1,304
  1,838
  2,521
  3,375
  4,418
  5,666
  7,133
  8,830
  10,762
  12,934
  15,346
  17,997
  20,884
  24,003
  27,347
  30,912
  34,693
  38,684
  42,883
  47,285
  51,889
  56,696
  61,706
  66,921
  72,346
  77,986
  83,847
Change in working capital, $m
  -99
  -145
  -203
  -276
  -365
  -470
  -590
  -725
  -872
  -1,029
  -1,194
  -1,365
  -1,540
  -1,716
  -1,891
  -2,064
  -2,235
  -2,402
  -2,564
  -2,724
  -2,879
  -3,031
  -3,182
  -3,330
  -3,479
  -3,627
  -3,778
  -3,930
  -4,087
  -4,248
Cash from operations, $m
  483
  743
  1,101
  1,581
  2,203
  2,991
  3,965
  5,142
  6,538
  8,162
  10,024
  12,128
  14,474
  17,062
  19,888
  22,949
  26,237
  29,749
  33,477
  37,417
  41,563
  45,914
  50,467
  55,220
  60,175
  65,333
  70,699
  76,276
  82,072
  88,094
Maintenance CAPEX, $m
  -168
  -268
  -415
  -620
  -900
  -1,270
  -1,746
  -2,343
  -3,077
  -3,959
  -5,001
  -6,210
  -7,592
  -9,151
  -10,888
  -12,802
  -14,892
  -17,154
  -19,586
  -22,182
  -24,939
  -27,853
  -30,922
  -34,143
  -37,515
  -41,036
  -44,708
  -48,533
  -52,511
  -56,648
New CAPEX, $m
  -1,229
  -1,785
  -2,507
  -3,413
  -4,511
  -5,806
  -7,290
  -8,950
  -10,764
  -12,707
  -14,750
  -16,864
  -19,019
  -21,190
  -23,355
  -25,496
  -27,601
  -29,661
  -31,673
  -33,637
  -35,557
  -37,441
  -39,295
  -41,132
  -42,963
  -44,800
  -46,655
  -48,541
  -50,472
  -52,459
Cash from investing activities, $m
  -1,397
  -2,053
  -2,922
  -4,033
  -5,411
  -7,076
  -9,036
  -11,293
  -13,841
  -16,666
  -19,751
  -23,074
  -26,611
  -30,341
  -34,243
  -38,298
  -42,493
  -46,815
  -51,259
  -55,819
  -60,496
  -65,294
  -70,217
  -75,275
  -80,478
  -85,836
  -91,363
  -97,074
  -102,983
  -109,107
Free cash flow, $m
  -914
  -1,311
  -1,821
  -2,452
  -3,208
  -4,084
  -5,071
  -6,151
  -7,303
  -8,504
  -9,727
  -10,946
  -12,137
  -13,279
  -14,354
  -15,349
  -16,255
  -17,066
  -17,781
  -18,402
  -18,933
  -19,380
  -19,751
  -20,056
  -20,303
  -20,503
  -20,664
  -20,798
  -20,911
  -21,013
Issuance/(repayment) of debt, $m
  977
  1,422
  1,998
  2,719
  3,595
  4,626
  5,809
  7,131
  8,577
  10,125
  11,753
  13,437
  15,154
  16,884
  18,609
  20,315
  21,992
  23,633
  25,236
  26,801
  28,331
  29,832
  31,310
  32,774
  34,232
  35,696
  37,174
  38,677
  40,215
  41,799
Issuance/(repurchase) of shares, $m
  568
  813
  1,122
  1,501
  1,950
  2,466
  3,038
  3,656
  4,303
  4,962
  5,615
  6,245
  6,835
  7,372
  7,844
  8,242
  8,561
  8,798
  8,952
  9,025
  9,020
  8,942
  8,797
  8,589
  8,326
  8,014
  7,658
  7,265
  6,841
  6,389
Cash from financing (excl. dividends), $m  
  1,545
  2,235
  3,120
  4,220
  5,545
  7,092
  8,847
  10,787
  12,880
  15,087
  17,368
  19,682
  21,989
  24,256
  26,453
  28,557
  30,553
  32,431
  34,188
  35,826
  37,351
  38,774
  40,107
  41,363
  42,558
  43,710
  44,832
  45,942
  47,056
  48,188
Total cash flow (excl. dividends), $m
  631
  925
  1,299
  1,768
  2,337
  3,007
  3,776
  4,636
  5,576
  6,582
  7,641
  8,736
  9,852
  10,977
  12,098
  13,207
  14,297
  15,364
  16,407
  17,424
  18,419
  19,394
  20,355
  21,307
  22,255
  23,207
  24,168
  25,145
  26,145
  27,174
Retained Cash Flow (-), $m
  -683
  -997
  -1,400
  -1,905
  -2,519
  -3,241
  -4,070
  -4,997
  -6,010
  -7,094
  -8,235
  -9,415
  -10,618
  -11,830
  -13,039
  -14,234
  -15,409
  -16,559
  -17,682
  -18,779
  -19,851
  -20,903
  -21,938
  -22,964
  -23,986
  -25,011
  -26,047
  -27,100
  -28,178
  -29,287
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
  -52
  -72
  -101
  -137
  -182
  -234
  -294
  -361
  -434
  -512
  -594
  -679
  -766
  -854
  -941
  -1,027
  -1,112
  -1,195
  -1,276
  -1,355
  -1,432
  -1,508
  -1,583
  -1,657
  -1,731
  -1,805
  -1,879
  -1,955
  -2,033
  -2,113
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
  -49
  -63
  -83
  -104
  -126
  -148
  -168
  -185
  -197
  -204
  -206
  -203
  -194
  -182
  -166
  -148
  -128
  -109
  -91
  -74
  -58
  -45
  -34
  -25
  -18
  -13
  -9
  -6
  -4
  -2
Current shareholders' claim on cash, %
  79.9
  65.2
  54.3
  46.0
  39.6
  34.6
  30.7
  27.5
  24.9
  22.8
  21.0
  19.6
  18.3
  17.3
  16.4
  15.7
  15.0
  14.5
  14.0
  13.6
  13.2
  12.9
  12.7
  12.4
  12.2
  12.0
  11.9
  11.8
  11.6
  11.6

WildHorse Resource Development Corporation is a holding company. The Company is an independent oil and natural gas company. The Company is focused on the acquisition, exploitation, exploration and development of oil, natural gas and natural gas liquid (NGL) resources in the United States. Its assets are characterized by concentrated acreage positions in Southeast Texas and North Louisiana with multiple producing stratigraphic horizons, or stacked pay zones, and single-well rates of return. In Southeast Texas, it operates in Burleson, Lee and Washington Counties where it primarily targets the Eagle Ford Shale (Eagle Ford Acreage), which is an active shale trends in North America. In North Louisiana, the Company operates in and around the Terryville Complex, where it primarily targets the overpressured Cotton Valley play (North Louisiana Acreage). The Company's subsidiaries include WildHorse Resources II, LLC (WildHorse) and Esquisto and Acquisition Co.

FINANCIAL RATIOS  of  WildHorse Resource Development (WRD)

Valuation Ratios
P/E Ratio -43.2
Price to Sales 16
Price to Book 2
Price to Tangible Book
Price to Cash Flow 92.4
Price to Free Cash Flow -3.7
Growth Rates
Sales Growth Rate 47.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 28%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 24.1%
Total Debt to Equity 24.1%
Interest Coverage -7
Management Effectiveness
Return On Assets -3.4%
Ret/ On Assets - 3 Yr. Avg. -4.7%
Return On Total Capital -4.4%
Ret/ On T. Cap. - 3 Yr. Avg. -6.6%
Return On Equity -5.7%
Return On Equity - 3 Yr. Avg. -9.8%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 85%
Gross Margin - 3 Yr. Avg. 78.4%
EBITDA Margin 27.6%
EBITDA Margin - 3 Yr. Avg. 23.4%
Operating Margin -14.2%
Oper. Margin - 3 Yr. Avg. -34.3%
Pre-Tax Margin -41.7%
Pre-Tax Margin - 3 Yr. Avg. -37.4%
Net Profit Margin -37%
Net Profit Margin - 3 Yr. Avg. -35.5%
Effective Tax Rate 11.3%
Eff/ Tax Rate - 3 Yr. Avg. 5%
Payout Ratio 0%

WRD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WRD stock intrinsic value calculation we used $427.187 million for the last fiscal year's total revenue generated by WildHorse Resource Development. The default revenue input number comes from 0001 income statement of WildHorse Resource Development. 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 WRD stock valuation model: a) initial revenue growth rate of 60% 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 WRD is calculated based on our internal credit rating of WildHorse Resource Development, 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 WildHorse Resource Development.
    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 WRD stock the variable cost ratio is equal to 59.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $69 million in the base year in the intrinsic value calculation for WRD 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 5.7% for WildHorse Resource Development.

Corporate tax rate of 27% is the nominal tax rate for WildHorse Resource Development. 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 WRD 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 WRD are equal to 479.2%.

Life of production assets of 12.2 years is the average useful life of capital assets used in WildHorse Resource Development 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 WRD is equal to -38.8%. 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 - $1145.292 million for WildHorse Resource Development - 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 102.006 million for WildHorse Resource Development 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 WildHorse Resource Development at the current share price and the inputted number of shares is $2.3 billion.

RELATED COMPANIES Price Int.Val. Rating
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RRC Range Resource 17.70 4.14  str.sell
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