Discounted Cash Flow Calculation for OB:SOFF using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
Note: Free cash flow to equity valuations ignore the company's cash or debt.
OB:SOFF DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Solstad Offshore's share price is below the future cash flow value, and at a moderate discount (> 20%).
Solstad Offshore's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Solstad Offshore's earnings available for a low price, and how does
this compare to other companies in the same industry?
In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Solstad Offshore has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.
This is quite a rare situation as 97% of companies covered by Simply Wall St do have past financial data. You can see them here.
Show me the analysis anyway
The future performance of a company is measured in the same way as past
performance, by looking at estimated
and how much profit it is expected to make.
Future estimates come from
professional analysts. Just like forecasting the weather, they don’t always get
Expected Energy Services industry annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Unable to compare Solstad Offshore's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Solstad Offshore's earnings growth to the Norway market average as no estimate data is available.
Unable to compare Solstad Offshore's revenue growth to the Norway market average as no estimate data is available.
Unable to determine if Solstad Offshore is high growth as no earnings estimate data is available.
Unable to determine if Solstad Offshore is high growth as no revenue estimate data is available.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Solstad Offshore's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
0/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Solstad Offshore's finances.
The net worth of a company is the difference between its assets and liabilities.
Solstad Offshore's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Solstad Offshore's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Solstad Offshore's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Solstad Offshore has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Can Solstad Farstad ASA (OB:SOFF) Improve Your Portfolio Returns?
The second risk is market-wide, which arises from investing in the stock market. … The most widely used metric to quantify a stock's market risk is beta, and the market as a whole represents a beta of one. … Any stock with a beta of greater than one is considered more volatile than the market, and those with a beta less than one is generally less volatile.
When Will Solstad Farstad ASA (OB:SOFF) Turn A Profit?
Solstad Farstad ASA's (OB:SOFF):. … Solstad Farstad ASA operates offshore service and construction vessels for renewable energy at sea and offshore petroleum industry worldwide. … The company’s loss has recently broadened since it announced a -øre313.77m loss in the full financial year, compared to the latest trailing-twelve-month loss of -øre678.45m, moving it further away from breakeven?
I find that Solstad Farstad’s ratio of 0.38x is trading slightly below its industry peers’ ratio of 1.15x, which means if you buy Solstad Farstad today, you’d be paying a relatively reasonable price for it. … And if you believe Solstad Farstad should be trading in this range, then there isn’t much room for the share price grow beyond what it’s currently trading. … Furthermore, it seems like Solstad Farstad’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued.
Did Solstad Farstad ASA's (OB:SOFF) Recent Earnings Growth Beat The Trend?
Check out our latest analysis for Solstad Farstad How Did SOFF's Recent Performance Stack Up Against Its Past? … For the purpose of this commentary, I like to use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. … Each year, for the past five years Solstad Farstad's revenue growth has been fairly subdued, with an annual growth rate of -0.082%, on average.
Solstad Offshore ASA operates offshore service and construction vessels for offshore and renewable energy industry worldwide. It offers anchor-handling vessels delivering services related to rig moves, and anchoring of rigs and other devices at sea; platform supply vessels that deliver services relating to the transportation of material to offshore installations; and construction service vessels delivering services relating to the development of subsea and floating installations. The company operates a fleet of 33 construction service vessels, 42 anchor handling vessels, and 61 platform supply vessels. Solstad Offshore ASA was founded in 1964 and is headquartered in Skudeneshavn, Norway.
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