Discounted Cash Flow Calculation for DB:9KG 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.
DB:9KG 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.
Keane Group's share price is below the future cash flow value, and at a moderate discount (> 20%).
Keane Group's share price is below the future cash flow value, but not 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
Keane Group's earnings available for a low price, and how does
this compare to other companies in the same industry?
Keane Group's earnings are expected to decrease over the next 1-3 years, this is not considered high growth.
Keane Group's revenue is expected to decrease over the next 1-3 years, this is not considered high growth.
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.
Keane Group'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
3/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Robert Wayne Drummond, Jr. has been the Chief Executive Officer and Director of Keane Group, Inc. since August 6, 2018. Mr. Drummond has been a Director of Key Energy Services, Inc. since November 23, 2015. He was the Chief Executive Officer of Key Energy Services Inc. since December 31, 2016 until May 11, 2018. He served as President at Key Energy Services, Inc. until May 11, 2018. Mr. Drummond served as the Chief Operating Officer at Key Energy Services Inc. since June 22, 2015. He served as the President North America at Schlumberger Limited from January 2011 to June 2015. He served as President of North America Offshore & Alaska from May 2010 to December 2010. He served as Vice President and General Manager for the US Gulf of Mexico from May 2009 to May 2010; Vice President of Global Sales from July 2007 to April 2009; Vice President and General Manager for US Land from February 2004 to June 2007; Wireline Operations Manager from October 2003 to January 2004; Vice President and General Manager for Atlantic and Eastern Canada from July 2000 to September 2003; and Oilfield Services Sales Manager from January 1998 to June 2000. Mr. Drummond is a member of the Society of Petroleum Engineers and served as a Director of the National Ocean Industries Association. He has been Supervisory Director at Frank's International N.V. since May 19, 2017. Mr. Drummond began his career in 1984 with Schlumberger. He serves on the Board of Directors for the Petroleum Equipment Suppliers Association and the Houston Offshore Energy Center. Formerly, he served on the Board of Directors for the Greater Houston Partnership and on the Board of Trustees for the Hibernia Platform Employees Organization â€ Newfoundland; and as an advisory board member for each of the University of Houston Global Energy Management Institute, the Texas Tech University Petroleum Engineers and Memorial University's Oil and Gas Development Partnership. Mr. Drummond received his Bachelors of Science in Mineral/Petroleum Engineering from the University of Alabama in 1983.
Insufficient data for Robert to compare compensation growth.
Insufficient data for Robert to establish whether their remuneration is reasonable compared to companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Keane Group management team is about average.
President & CFO
Advisor to Chairman
VP and GM of South Region & National Wireline
CEO & Director
Chief Accounting Officer
Vice President of Sales & Marketing
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Keane Group board of directors is about average.
Keane Group, Inc. provides integrated well completion services primarily in the United States. Its principal service offerings include horizontal and vertical fracturing, wireline perforation and logging, and engineered solutions. The company also provides cementing and drilling services; and engineering software and technical guidance for remedial cementing applications and acidizing. Its customers primarily include integrated and large independent oil and natural gas exploration and production companies. The company has 29 hydraulic fracturing fleets, 34 wireline trucks, 24 cementing pumps, and other ancillary assets located in the Permian Basin, the Marcellus Shale/Utica Shale, the Eagle Ford Formation, the Bakken Formation, and other active oil and gas basins. Keane Group, Inc. was founded in 1973 and is headquartered in Houston, Texas. Keane Group, Inc. is a subsidiary of Keane Investor Holdings LLC.
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