GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » National Energy Services Reunited Corp (OTCPK:NESR) » Definitions » Intrinsic Value: DCF (FCF Based)

National Energy Services Reunited (National Energy Services Reunited) Intrinsic Value: DCF (FCF Based) : $35.88 (As of May. 14, 2024)


View and export this data going back to 2017. Start your Free Trial

What is National Energy Services Reunited Intrinsic Value: DCF (FCF Based)?

As of today (2024-05-14), National Energy Services Reunited's intrinsic value calculated from the Discounted Cash Flow model is $35.88.

Note: Discounted Cash Flow model is only suitable for predictable companies (Business Predictability Rank higher than 1-Star). If the company's predictability rank is 1-Star or Not Rated, result may not be accurate due to the low predictability of business and the data will not be stored into our database.

National Energy Services Reunited's Predictability Rank is Not Rated. Thus, this page is only used for demonstration purposes and the DCF related results in the screener and portfolio will appear as zero.

Margin of Safety (FCF Based) using Discounted Cash Flow model for National Energy Services Reunited is 72.97%.

The industry rank for National Energy Services Reunited's Intrinsic Value: DCF (FCF Based) or its related term are showing as below:

NESR's Price-to-DCF (FCF Based) is not ranked *
in the Oil & Gas industry.
Industry Median: 0.66
* Ranked among companies with meaningful Price-to-DCF (FCF Based) only.

National Energy Services Reunited Intrinsic Value: DCF (FCF Based) Historical Data

The historical data trend for National Energy Services Reunited's Intrinsic Value: DCF (FCF Based) can be seen below:

* 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.

* Premium members only.

National Energy Services Reunited Intrinsic Value: DCF (FCF Based) Chart

National Energy Services Reunited Annual Data
Trend Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Intrinsic Value: DCF (FCF Based)
Get a 7-Day Free Trial - - - - -

National Energy Services Reunited Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Dec22 Dec23
Intrinsic Value: DCF (FCF Based) Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only - - - - -

Competitive Comparison of National Energy Services Reunited's Intrinsic Value: DCF (FCF Based)

For the Oil & Gas Equipment & Services subindustry, National Energy Services Reunited's Price-to-DCF (FCF Based), along with its competitors' market caps and Price-to-DCF (FCF 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.


National Energy Services Reunited's Price-to-DCF (FCF Based) Distribution in the Oil & Gas Industry

For the Oil & Gas industry and Energy sector, National Energy Services Reunited's Price-to-DCF (FCF Based) distribution charts can be found below:

* The bar in red indicates where National Energy Services Reunited's Price-to-DCF (FCF Based) falls into.



National Energy Services Reunited Intrinsic Value: DCF (FCF Based) Calculation

This is the intrinsic value calculated from the Discounted Cash Flow model with default parameters. In a discounted cash flow model, the future cash flow is estimated based on a cash flow growth rate and a discount rate. The cash flow of the future is discounted to its current value at the discount rate. All of the discounted future cash flow is added together to get the current intrinsic value of the company.

Usually a two-stage model is used when calculating a stock's intrinsic value using a discounted cash flow model. The first stage is called the 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 4.45%. 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 = 20%
The Growth Rate in the growth stage is initially set as the default 10-Year FCF Growth Rate (Per Share). In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year FCF Growth Rate (Per Share). If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year FCF Growth Rate (Per Share).
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.
=> National Energy Services Reunited's average Free Cash Flow Growth Rate in the past 3 years was 25.50%, which is no less than 20%. GuruFocus defaults => Growth Rate: 20%

3. Years of Growth Stage: y1 = 10

4. Terminal Growth Rate: g2 = 4%

5. Years of Terminal Growth: y2 = 10

6. Free Cash Flow per Share: fcf = $1.148.
However, GuruFocus DCF calculator is actually a Discounted Earnings calculator, the 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.

National Energy Services Reunited's Intrinsic Value: DCF (FCF Based) for today is calculated as

Intrinsic Value: DCF (FCF Based)=Free Cash Flow per Share*{[(1+g1)/(1+d)+(1+g1)^2/(1+d)^2+...+(1+g1)^10/(1+d)^10]
+(1+g1)^10/(1+d)^10*[(1+g2)/(1+d)+(1+g2)^2/(1+d)^2+...+(1+g2)^10/(1+d)^10]}

set x = (1+g1)/(1+d) = (1+0.2)/(1+0.11) = 1.0810810810811
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694

Intrinsic Value: DCF (FCF Based)=Free Cash Flow per Share*{[x+x^2+...+x^10]+x^10*[y+y^2+...+y^10]}
=Free Cash Flow per Share*[x*(1-x^10)/(1-x)+x^10*y*(1-y^10)/(1-y)]
=1.148*31.2501
=35.88

Margin of Safety (FCF Based)=(Intrinsic Value: DCF (FCF Based)-Current Price)/Intrinsic Value: DCF (FCF Based)
=(35.88-9.70)/35.88
=72.97 %

* 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.


National Energy Services Reunited  (OTCPK:NESR) Intrinsic Value: DCF (FCF Based) Explanation

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


Be Aware

What you need to know about the DCF model:

1. The DCF 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 have relatively consistent performance.
4. The DCF model works poorly for inconsistent performers such as cyclicals.
5. What discount rate should you use? Your expected return from the investment is a good 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.


National Energy Services Reunited Intrinsic Value: DCF (FCF Based) Related Terms

Thank you for viewing the detailed overview of National Energy Services Reunited's Intrinsic Value: DCF (FCF Based) provided by GuruFocus.com. Please click on the following links to see related term pages.


National Energy Services Reunited (National Energy Services Reunited) Business Description

Traded in Other Exchanges
N/A
Address
777 Post Oak Boulevard, Suite 730, Houston, TX, USA, 77056
National Energy Services Reunited Corp is a British Virgin Islands-based company engaged in providing products and services to the oil and gas industry in the Middle East and North Africa and the Asia Pacific regions. The company has two reportable segments: Production Services including coil tubing, stimulation, and pumping, nitrogen services, completions, pipelines, cementing, laboratory services and filtration services; and Drilling and Evaluation Services including drilling and workover rigs, rig services, services, and well-testing services among others. Revenues are majorly derived from production services of an oil or natural gas well.
Executives
Melissa Cougle officer: Chief Financial Officer 777 POST OAK BLVD., 7TH FLOOR, HOUSTON TX 77056
Adnan Ghabris director PO BOX 346036 DUBAI C0 00000
Al Noaimi Salem Rashed Abdulla Ali director AERCAP HOUSE, 65 ST. STEPHEN'S GREEN, DUBLIN L2 2
Capital Pjsc Waha 10 percent owner LEVEL 42, TOWER 3, ETIHAD TOWERS PO BOX 28922 ABU DHABI C0 00000
Thomas D Wood director, 10 percent owner, officer: CFO NATIONAL ENERGY SERVICES REUNITED CORP., 777 POST OAK BLVD, HOUSTON TX 77056
Campo Mejia Antonio J director NATIONAL ENERGY SERVICES REUNITED CORP. 777 POST OAK BLVD. HOUSTON TX 77056
Waha Energy Ltd 10 percent owner C/O MAPLES CORPORATE SERVICES LIMITED PO BOX 309, UGLAND HOUSE GRAND CAYMAN E9 KY1-1104
Nesr Spv Ltd 10 percent owner C/O MAPLES CORPORATE SERVICES LIMITED PO BOX 309, UGLAND HOUSE GRAND CAYMAN E9 KY1-1104
Olayan Saudi Holding Co 10 percent owner P.O. BOX 8772, OLAYAN CENTER, AHSAA STREET RIYADH T0 11492
Olayan Financing Co Ltd. 10 percent owner P.O. BOX 8772, OLAYAN CENTER, AHSAA STREET RIYADH T0 11492
Christine J Morris officer: Chief Financial Officer NATIONAL ENERGY SERVICES REUNITED CORP. 777 POST OAK BLVD., 7TH FLOOR HOUSTON TX 77056
Olayan International Ltd 10 percent owner C/O 111 POSEIDONOS AVE., GLYFADA ATHENS J3 166 10
Olayan Investments Co Establishment 10 percent owner 111 POSEIDONOS AVENUE GLYFADA ATHENS J3 166 10
Sherif Foda director, 10 percent owner, officer: CEO C/O SCHLUMBERGER LIMITED, 5599 SAN FELIPE, 17TH FLOOR, HOUSTON TX 77056
Nesr Holdings Ltd. 10 percent owner RITTER HOUSE WICKHAMS CAY II, ROAD TOWN TORTOLA D8 VG1110

National Energy Services Reunited (National Energy Services Reunited) Headlines

From GuruFocus