Thinking out loud a bit here...
I am working on a practice analysis of a company with ~0 EBITDA, neg FCF, neg EPS. It's a decent business otherwise and better asset utilitization will lead to positive numbers (and that is mgmt's priority now). However, for now, to set a short term price target, I am using BVPS. I am projecting BV forward using some reasonable assumptions about assets, depreciation, liabilities.I have it in my head that I need to subtract neg EPS from this (EPS is neg, to be totally clear).
Until a few minutes ago I was just going to subtract EPS in the final period (e.g. if BVPS is $2.00 in Dec '13, then I'll deduct the $0.15 in neg EPS in that quarter from that to get $1.85 in net BVPS at that time). However, I've just realized I probably need to deduct all neg earnings for each quarter along the way, don't I?
That makes sense - EPS for the year would be the sum of EPS for each quarter. Damn... my minimum price just got a lot lower.
Are you trying to build out a residual income model?
Sounds like it.
OP, why not use Revenue to derive the ST value?
Yeah, that's what worried me. If the company has roughly $0 EBITDA, I can't imagine there'd be any residuals to model no matter how you looked at it. Just seemed odd at first glance.
OP, I'd go with what peinvestor2012 suggested.
upload the model for peepz to give you crystal clear advice.
Model is here: https://dl.dropboxusercontent.com/u/48646408/gasfrac%20analysis.xlsx
Thanks for looking, folks. I apologize, the model is a hack with very little going on... just projecting numbers that need to be projected, either using TTM averages or a guess based on MD&A (http://www.gasfrac.com/financial-statements.html).
peinvestor2012, you mean short term val? I'll look into this... not sure what you mean exactly though. Not sure how revenue by itself is particularly informative.
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