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NOV Inc.

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Oil & Gas Equipment & ServicesSector: Energy

Fair Value Summary

Current Price$14.54
5Y Range20.62 – 28.54
5Y Selected24.58
(-) Safety Margin74.40%
5Y Buy Price$6.29
Upside (to Buy Price)-56.73%
10Y Range18.73 – 24.46
10Y Selected21.59
(-) Safety Margin74.40%
10Y Buy Price$5.53
Upside (to Buy Price)-61.98%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.4009
Revenue R2 (10Y)0.6763
Net Income R2 (5Y)0.1364
Net Income R2 (10Y)0.1773
EBITDA R2 (5Y)0.0074
EBITDA R2 (10Y)0.4915
FCF R2 (5Y)0.4319
FCF R2 (10Y)0.7506
Safety Score0.2560

DA 10-Year Projection

Metric2023202420252026202720282029203020312032
% Growth-4.86%-3.87%-2.89%-1.90%-0.92%0.06%1.05%2.03%3.02%4.00%
Revenue6,885.476,618.786,427.566,305.126,247.076,251.036,316.516,444.856,639.216,904.78
EBITDA810.88779.48756.96742.54735.70736.17743.88758.99781.88813.16
D&A-383.87-369.00-358.34-351.52-348.28-348.50-352.15-359.31-370.14-384.95
EBIT427.01410.47398.61391.02387.42387.67391.73399.69411.74428.21
Pro forma Taxes-89.67-86.20-83.71-82.11-81.36-81.41-82.26-83.93-86.47-89.92
NOPAT337.34324.27314.91308.91306.06306.26309.46315.75325.27338.29
Capital Expenditures-218.76-210.29-204.21-200.32-198.48-198.60-200.68-204.76-210.94-219.37
NWC Investment109.2282.8659.4138.0418.04-1.23-20.34-39.87-60.39-82.51
(+) D&A383.87369.00358.34351.52348.28348.50352.15359.31370.14384.95
Free Cash Flow611.67565.85528.45498.14473.90454.92440.59430.43424.09421.35
Diluted Shares Outstanding395,500,000.00395,500,000.00395,500,000.00395,500,000.00395,500,000.00395,500,000.00395,500,000.00395,500,000.00395,500,000.00395,500,000.00

Discounting Periods

MetricDec-23Dec-24Dec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32
Period Start9/30/231/1/241/1/251/1/261/1/271/1/281/1/291/1/301/1/311/1/32
Period End12/31/2312/31/2412/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/32
Mid-Point11/15/237/1/247/2/257/2/267/2/277/1/287/2/297/2/307/2/317/1/32
Time (t)0.100.100.100.461.462.463.464.465.466.46
Valuation Date1/16/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.34%
Metric2023202420252026202720282029203020312032TV (5y)TV (10y)
Discount Factor0.990.990.990.960.880.810.740.680.620.57
PV UFCF606.36560.94523.87478.58417.33367.21325.98291.90263.62240.08
Raw: 7,174.46
6,048.79
Raw: 6,378.87
3,479.68

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value8,635.877,555.54
(-) Net Debt-737.00-737.00
Equity Value9,372.878,292.54
(/) Shares Out395.50395.50
Fair Value$23.70$20.97
(-) Safety Margin74.40%74.40%
Buy Price$6.07$5.37
Current Price$14.54$14.54
Upside (to Buy Price)-58.27%-63.08%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 1.84%
Metric2023202420252026202720282029203020312032TV (5y)TV (10y)
Discount Factor0.990.990.990.960.870.790.720.650.590.54
PV UFCF605.81560.43523.39476.58411.80359.06315.85280.26250.81226.33
Raw: 5,842.88
4,838.82
Raw: 5,194.95
2,659.48

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value7,416.846,669.80
(-) Net Debt-737.00-737.00
Equity Value8,153.847,406.80
(/) Shares Out395.50395.50
Fair Value$20.62$18.73
(-) Safety Margin74.40%74.40%
Buy Price$5.28$4.79
Current Price$14.54$14.54
Upside (to Buy Price)-63.70%-67.03%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 2.84%
Metric2023202420252026202720282029203020312032TV (5y)TV (10y)
Discount Factor0.990.990.990.960.890.830.760.710.650.60
PV UFCF606.92561.46524.35480.62422.98375.62336.53304.14277.21254.79
Raw: 9,265.52
7,954.03
Raw: 8,238.05
4,791.30

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value10,550.358,935.91
(-) Net Debt-737.00-737.00
Equity Value11,287.359,672.91
(/) Shares Out395.50395.50
Fair Value$28.54$24.46
(-) Safety Margin74.40%74.40%
Buy Price$7.31$6.26
Current Price$14.54$14.54
Upside (to Buy Price)-49.75%-56.94%

Reverse DCF: Market Implied Growth

Current Price$14.54
WACC Used9.1%
IMPLIED REVENUE GROWTH96.89%
Metric2027202820292030203120322033203420352036
Implied Revenue16,367.2332,224.9963,446.88124,918.79245,949.12484,242.35953,411.241,877,144.773,695,857.907,276,671.40
Constant Implied Growth96.89%96.89%96.89%96.89%96.89%96.89%96.89%96.89%96.89%96.89%
Implied Free Cash Flow1.643.226.3412.4924.5948.4295.34187.71369.59727.67
Discount Factor0.990.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF1.622.604.698.4715.2927.5949.7989.86162.17292.66

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20172017-12-31$37.71-8.29%$21.35-43.38%
20162016-12-31$37.71-9.47%$21.28-43.58%
20152015-12-31$37.71-2.57%$35.89-4.83%
20142014-12-31$37.71-9.37%$51.8837.57%
20132013-12-31$37.71-22.81%$40.888.40%
20122012-12-31$37.71-26.27%$8.28-78.05%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$21.29
Median
$20.94
10th Percentile
$18.55
90th Percentile
$24.26

Fair Value Distribution

$16.56 - $17.60
23
$17.60 - $18.64
83
$18.64 - $19.67
156
$19.67 - $20.71
201
$20.71 - $21.75
173
$21.75 - $22.79
134
$22.79 - $23.82
102
$23.82 - $24.86
48
$24.86 - $25.90
31
$25.90 - $26.94
19
$26.94 - $27.97
12
$27.97 - $29.01
10
$29.01 - $30.05
4
$30.05 - $31.09
1
$31.09 - $32.12
1
$32.12 - $33.16
0
$33.16 - $34.20
0
$34.20 - $35.24
1
$35.24 - $36.27
0
$36.27 - $37.31
0