TXO Partners LP (TXO Partners LP) Intrinsic Value: DCF (Earnings Based) : $-68.09 (As of May. 19, 2024)

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TXO Partners LP Intrinsic Value: DCF (Earnings Based) Chart

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Competitive Comparison of TXO Partners LP's Intrinsic Value: DCF (Earnings Based)

For the Oil & Gas E&P subindustry, TXO Partners LP's Price-to-DCF (Earnings Based), along with its competitors' market caps and Price-to-DCF (Earnings Based) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

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TXO Partners LP's Price-to-DCF (Earnings Based) Distribution in the Oil & Gas Industry

For the Oil & Gas industry and Energy sector, TXO Partners LP's Price-to-DCF (Earnings Based) distribution charts can be found below:

* The bar in red indicates where TXO Partners LP's Price-to-DCF (Earnings Based) falls into.

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TXO Partners LP Intrinsic Value: DCF (Earnings Based) Calculation

This is the intrinsic value calculated from the Discounted Earnings model with default parameters. The calculation method is the same as Discounted Cash Flow model except earnings are used in the calculation instead of free cash flow. This is the default method of calculation with GuruFocus DCF calculator.

Usually a two-stage model is used in calculating the intrinsic value with discounted cash flow model. The first stage is called growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.

GuruFocus DCF calculator is a two-stage model. The default values are defined as:

1. Discount Rate: d = 11%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.42%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.

2. Growth Rate in the growth stage: g1 = 5%
The Growth Rate in the growth stage is initially set as the default 10-Year EPS without NRI Growth Rate. In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year EPS without NRI Growth Rate. If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year EPS without NRI Growth Rate.
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=> TXO Partners LP's average EPS without NRI Growth Rate in the past 3 years was 0.00%, which is less than 5%. GuruFocus defaults => Growth Rate: 5%

3. Years of Growth Stage: y1 = 10

4. Terminal Growth Rate: g2 = 4%

5. Years of Terminal Growth: y2 = 10

6. EPS without NRI: eps without nri = $-5.900.
GuruFocus DCF calculator is actually a Discounted Earnings calculator, EPS without NRI is used as the default. The reason we are doing this is we found that historically stock prices are more correlated with earnings than free cash flow.

All of the default settings can be changed and the results are calculated automatically.

TXO Partners LP's Intrinsic Value: DCF (Earnings Based) for today is calculated as:

set x = (1+g1)/(1+d) = (1+0.05)/(1+0.11) = 0.94594594594595
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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TXO Partners LP  (NYSE:TXO) Intrinsic Value: DCF (Earnings Based) Explanation

Unlike valuation methods such as Net Current Asset Value, Tangible Book Value per Share, Graham Number, Median Ratio etc, discounted Cash Flow model evaluates the companies based on their future earnings power instead of their assets.

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Be Aware

What you need to know about Discounted Earnings model:

1. The Discounted Earnings model evaluates a company based on its future earnings power
2. Growth is taken into account; therefore a faster growth company is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 10 years. Therefore this model works better for the companies that are relatively consistent performers.
4. The Discounted Earnings model works poorly for inconsistent performers like cyclicals.
5. Your expected return from the investment is a reasonable discount rate assumption.
6. A larger margin of safety should be required for companies with less predictable businesses.

You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.

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TXO Partners LP Intrinsic Value: DCF (Earnings Based) Related Terms

Thank you for viewing the detailed overview of TXO Partners LP's Intrinsic Value: DCF (Earnings Based) provided by GuruFocus.com. Please click on the following links to see related term pages.

Predictability Rank Intrinsic Value: DCF (FCF Based) Intrinsic Value: DCF (Dividends Based) Intrinsic Value: Projected FCF EPS without NRI Free Cash Flow Margin of Safety % (DCF FCF Based) Margin of Safety % (DCF Earnings Based) Margin of Safety % (DCF Dividends Based)

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TXO Partners LP (TXO Partners LP) Business Description

Executives

Phillip R Kevil	director, other: See Remarks	C/O MORNINGSTAR PARTNERS, L.P., 400 WEST 7TH STREET, FORT WORTH TX 76102
King Luther Capital Management Corp	10 percent owner	301 COMMERCE SUITE 1600, FORT WORTH TX 76102
Bob R Simpson	director, 10 percent owner, officer: See Remarks, other: See Remarks	C/O MORNINGSTAR PARTNERS, L.P., 400 WEST 7TH STREET, FORT WORTH TX 76102
Keith A Hutton	director, 10 percent owner, officer: See Remarks, other: See Remarks	C/O MORNINGSTAR PARTNERS, L.P., 400 WEST 7TH STREET, FORT WORTH TX 76102
Adams William H Iii	director, other: See Remarks	C/O MORNINGSTAR PARTNERS, L.P., 400 WEST 7TH STREET, FORT WORTH TX 76102
Global Endowment Management, Lp	10 percent owner	224 W TREMONT AVE, CHARLOTTE NC 28203
Lkcm Investment Partnership, L.p.	10 percent owner	301 COMMERCE STREET, SUITE 1600, FORT WORTH TX 76102
Lkcm Private Discipline Master Fund, Spc	10 percent owner	PO BOX 309GT, UGLAND HOUSE, SOUTH CHURCH STREET, GRAND CAYMAN E9 00000
King J Luther Jr	director, 10 percent owner, other: See Remarks	C/O MORNINGSTAR PARTNERS, L.P., 400 WEST 7TH STREET, FORT WORTH TX 76102
Brent W. Clum	director, officer: See Remarks, other: See Remarks	C/O MORNINGSTAR PARTNERS, L.P., 400 W. 7TH STREET, FORT WORTH TX 76102
Scott T. Agosta	officer: See Remarks, other: See Remarks	C/O MORNINGSTAR PARTNERS, L.P., 400 W. 7TH STREET, FORT WORTH TX 76102
Richard Jacob Settle	director, other: See Remarks	C/O MORNINGSTAR PARTNERS, L.P., 400 WEST 7TH STREET, FORT WORTH TX 76102