If we assume a discount of 10%, the sum of future FCF from 2023 to 2033 stands at $1.1 billion. My numbers are not far from the numbers reported by U.S.
#Us silica stock free
My results include free cash flow between $147 million and $223 million as well as FCF/Sales around 9%. I also included D&A close to $153 million and $76 million, working capital/Sales of 5.7%, and capex/sales of 4%. I also used an EBITDA margin of 22% and an operating margin close to 17%, which result in 2033 EBIAT of $345 million. Silica receives public money, I believe that future free cash flow will likely trend north.Ĭonsidering sales growth of -10% in 2024 and 6%-7% growth from 2025 to 2033, I obtained revenue of $2.6 billion in 2033. Government promised to invest a significant amount of dollars to make the country independent from vendors of oil and gas outside the U.S. With respect to the company’s industrial initiatives, I am quite optimistic about the future investments in clean energy and infrastructure spending. Under these assumptions, I believe that the company’s market valuation will likely increase. In my view, if management can sign long lasting agreements with clients, future cash flow will be enhanced. With respect to the company’s oil and gas business model, management expects strong customer demand, which will likely bring margin expansion. Under these intentions, I believe that we can be optimistic about the future performance of U.S. Besides, the company expects to target mainly those projects that offer decent returns so that free cash flow generation is optimized. Silica expects to reduce the total amount of leverage, so that net debt is below 3x by the end of 2022. I am writing about the company because I reviewed some of the priorities noted by management. Management did note in recent presentations that it expected to reduce the company’s debt outstanding.ġ0-Q Less Leverage, Multi-year Agreements, And Better Position To Benefit From Clean Energy Could Lead To A Valuation Of $21 Per Share However, future reduction of leverage will likely bring the company’s stock price up.
The total amount of long-term debt is equal to $1.19 billion, or between 2x and 3x forward EBITDA. With cash worth $312 million and an asset/liability ratio close to 1x, I believe that the company’s financial situation appears stable. Have a look at the numbers below, so that you can later compare with my own figures. Capital expenditures will most likely stay around 3%-4% in 2022, 2023, and 2024. Projections are made with ease.įinally, let’s also mention that analysts are expecting close to double digit FCF/Sales margin in 20, and 8.89% FCF/Sales margin in 2024. In my view, shareholders and debt holders will likely offer more financing as the business model is quite stable. With respect to the company’s EBITDA margin and operating margin, it is great that U.S. I believe that we could expect double digit sales growth in the future. With that, let’s note that sales growth reached more than 30% in 2021. In my view, renewable energy will most likely represent an opportunity for management in the coming years.Īnalysts believe that the company will deliver close to 4% sales growth in 2023 and 8% sales growth in 2024. In my view, further improvement in the company’s financial figures could bring the stock price up.īesides, it is quite impressive that a significant part of U.S. First, in one of the last presentations, management noted an increase in the demand, sales prices, and margins of O&G proppant and ISP. I believe it is a great moment to review the company’s business model for several reasons.
It has been around for over 122 years, so I believe that it has acquired a significant amount of know-how that new entrants simply cannot acquire overnight. Silica presents itself as a global industrial minerals and logistics leader. My DCF models indicate significant upside potential from today’s prices. In my view, even taking into account potential decrease in the demand for frac sand, productivity issues, and supply chain problems, the current stock price is too low.
Most investment analysts are optimistic about the company’s future FCF/Sales ratio, and the management promised to lower the net leverage. SCLA is a provider of silica sands for the solar industry, which appears to be receiving a lot of money from public institutions. ( NYSE: SLCA) is benefiting from the recent increase in activity in the oil and gas industry.
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