Discounted Cash Flow (DCF) Analysis Unlevered

STEP Energy Services Ltd. (STEP.TO)

$3.1

+0.03 (+0.98%)

All numbers are in Millions, Currency in USD

Stock DCF: -15.41 | 3.1 | overvalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	781.76	668.30	368.95	536.31	989.02	1,163.25	1,368.18	1,609.21	1,892.70	2,226.14
Revenue (%)
EBITDA	61.94	-54.29	-43.47	54.55	220.41	47.63	56.02	65.89	77.50	91.15
EBITDA (%)
EBIT	-26.70	-160.84	-132.41	-18.83	132.44	-124.45	-146.37	-172.16	-202.49	-238.16
EBIT (%)
Depreciation	88.65	106.55	88.94	73.38	87.97	172.08	202.40	238.05	279.99	329.32
Depreciation (%)

Balance Sheet Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	0.36	7.27	1.27	3.70	2.78	5.70	6.70	7.88	9.27	10.90
Total Cash (%)
Account Receivables	124.55	113.42	65.43	86.75	199.14	202.29	237.92	279.84	329.14	387.12
Account Receivables (%)
Inventories	32.65	28.40	26.99	32.73	46.41	61.74	72.61	85.41	100.45	118.15
Inventories (%)
Accounts Payable	84.08	77.07	50.59	95.18	165.87	164.06	192.97	226.96	266.94	313.97
Accounts Payable (%)
Capital Expenditure	-115.45	-49.06	-17.83	-37.24	-82.98	-98.35	-115.68	-136.06	-160.03	-188.22
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 3.1
Beta	2.577
Diluted Shares Outstanding	68.01
Cost of Debt
Tax Rate	21.44
After-tax Cost of Debt	5.69%
Risk-Free Rate
Market Risk Premium
Cost of Equity	15.542
Total Debt	162.98
Total Equity	210.82
Total Capital	373.80
Debt Weighting	43.60
Equity Weighting	56.40
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	781.76	668.30	368.95	536.31	989.02	1,163.25	1,368.18	1,609.21	1,892.70	2,226.14
EBITDA	61.94	-54.29	-43.47	54.55	220.41	47.63	56.02	65.89	77.50	91.15
EBIT	-26.70	-160.84	-132.41	-18.83	132.44	-124.45	-146.37	-172.16	-202.49	-238.16
Tax Rate	-4.98%	17.83%	17.88%	8.16%	21.44%	12.07%	12.07%	12.07%	12.07%	12.07%
EBIAT	-28.03	-132.16	-108.74	-17.30	104.05	-109.44	-128.71	-151.39	-178.06	-209.43
Depreciation	88.65	106.55	88.94	73.38	87.97	172.08	202.40	238.05	279.99	329.32
Accounts Receivable	-	11.13	47.99	-21.32	-112.39	-3.15	-35.64	-41.91	-49.30	-57.98
Inventories	-	4.24	1.41	-5.74	-13.68	-15.33	-10.88	-12.79	-15.05	-17.70
Accounts Payable	-	-7.01	-26.47	44.59	70.69	-1.81	28.90	33.99	39.98	47.03
Capital Expenditure	-115.45	-49.06	-17.83	-37.24	-82.98	-98.35	-115.68	-136.06	-160.03	-188.22
UFCF	-54.83	-66.31	-14.69	36.37	53.65	-55.99	-59.61	-70.11	-82.46	-96.98
WACC
PV UFCF						-50.33	-48.16	-50.92	-53.83	-56.91
SUM PV UFCF										-260.15

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	11.25
Free cash flow (t + 1)	-98.92
Terminal Value	-1,069.45
Present Value of Terminal Value	-627.57

Intrinsic Value

Enterprise Value	-887.71
Net Debt	160.19
Equity Value	-1,047.91
Shares Outstanding	68.01
Equity Value Per Share	-15.41