HP (Helmerich & Payne) Intrinsic Value: DCF (FCF Based) : $23.78 (As of Jul. 01, 2025)

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Helmerich & Payne Intrinsic Value: DCF (FCF Based) Chart

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Competitive Comparison of Helmerich & Payne's Intrinsic Value: DCF (FCF Based)

For the Oil & Gas Drilling subindustry, Helmerich & Payne's Price-to-DCF (FCF Based), along with its competitors' market caps and Price-to-DCF (FCF Based) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

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Helmerich & Payne's Price-to-DCF (FCF Based) Distribution in the Oil & Gas Industry

For the Oil & Gas industry and Energy sector, Helmerich & Payne's Price-to-DCF (FCF Based) distribution charts can be found below:

* The bar in red indicates where Helmerich & Payne's Price-to-DCF (FCF Based) falls into.

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Helmerich & Payne Intrinsic Value: DCF (FCF Based) Calculation

This is the intrinsic value calculated from the Discounted Cash Flow model with default parameters. In a discounted cash flow model, the future cash flow is estimated based on a cash flow growth rate and a discount rate. The cash flow of the future is discounted to its current value at the discount rate. All of the discounted future cash flow is added together to get the current intrinsic value of the company.

Usually a two-stage model is used when calculating a stock's intrinsic value using a discounted cash flow model. The first stage is called the growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.

GuruFocus DCF calculator is a two-stage model. The default values are defined as:

1. Discount Rate: d = 11%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.21%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.

2. Growth Rate in the growth stage: g1 = 20%
The Growth Rate in the growth stage is initially set as the default 10-Year FCF Growth Rate (Per Share). In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year FCF Growth Rate (Per Share). If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year FCF Growth Rate (Per Share).
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=> Helmerich & Payne's average Free Cash Flow Growth Rate in the past 3 years was 56.00%, which is no less than 20%. GuruFocus defaults => Growth Rate: 20%

3. Years of Growth Stage: y1 = 10

4. Terminal Growth Rate: g2 = 4%

5. Years of Terminal Growth: y2 = 10

6. Free Cash Flow per Share: fcf = $0.761.
However, GuruFocus DCF calculator is actually a Discounted Earnings calculator, the EPS without NRI is used as the default. The reason we are doing this is we found that historically stock prices are more correlated with earnings than free cash flow.

All of the default settings can be changed and the results are calculated automatically.

Helmerich & Payne's Intrinsic Value: DCF (FCF Based) for today is calculated as

set x = (1+g1)/(1+d) = (1+0.2)/(1+0.11) = 1.0810810810811
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Helmerich & Payne  (NYSE:HP) Intrinsic Value: DCF (FCF Based) Explanation

Unlike valuation methods such as Net Current Asset Value, Tangible Book per Share, Graham Number, Median PS Value etc, discounted Cash Flow model evaluates the companies based on their future earnings power instead of their assets.

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Be Aware

What you need to know about the DCF model:

1. The DCF model evaluates a company based on its future earnings power
2. Growth is taken into account; therefore a faster growth company is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 10 years. Therefore this model works better for the companies that have relatively consistent performance.
4. The DCF model works poorly for inconsistent performers such as cyclicals.
5. What discount rate should you use? Your expected return from the investment is a good discount rate assumption.
6. A larger margin of safety should be required for companies with less predictable businesses.

You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.

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Helmerich & Payne Intrinsic Value: DCF (FCF Based) Related Terms

Thank you for viewing the detailed overview of Helmerich & Payne's Intrinsic Value: DCF (FCF Based) provided by GuruFocus.com. Please click on the following links to see related term pages.

Predictability Rank Intrinsic Value: DCF (Earnings Based) Intrinsic Value: DCF (Dividends Based) Intrinsic Value: Projected FCF Free Cash Flow Free Cash Flow per Share Margin of Safety % (DCF FCF Based) Margin of Safety % (DCF Earnings Based) Margin of Safety % (DCF Dividends Based)

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Helmerich & Payne Business Description

Executives

Randy A Foutch	director	15 W. SIXTH STREET, SUITE, 1800, TULSA OK 74119
Belgacem Chariag	director	TECHNO PARK, SHEIKH ZAYED ROAD, DUBAI C0 00000
John W Lindsay	director, officer: President and CEO	1437 S. BOULDER AVE., SUITE 1400, TULSA OK 74119
Cara M. Hair	officer: SVP, Corp. Services & CLO	1437 S. BOULDER AVE., SUITE 1400, TULSA OK 74119
Mark W. Smith	officer: Senior VP and CFO	15835 PARK TEN PLACE DRIVE, HOUSTON TX 77084
Adams Raymond John Iii	officer: SVP Sales, Marketing & Digital	1437 S. BOULDER AVE., SUITE 1400, TULSA OK 74119
Hans Helmerich	director	C/O CIIRMAREX ENERGY CO, 707 17TH ST. #3300, DENVER CO 80202-3404
Elizabeth R Killinger	director	NRG ENERGY, INC., 211 CARNEGIE CENTER, PRINCETON NJ 08540
John R. Bell	officer: SVP, Int'l & Offshore Ops, sub	1437 S. BOULDER AVE., SUITE 1400, TULSA OK 74119
Sara Marie Momper	officer: VP, CAO	1437 S. BOULDER AVE., SUITE 1400, TULSA OK 74119
Michael Lennox	officer: SVP, US Land Ops, drilling sub	1437 S. BOULDER AVE., SUITE 140, TULSA OK 74119
Todd Willard Benson	officer: President of H&P Technologies	1437 S. BOULDER AVENUE, SUITE 1400, TULSA OK 74119
Mary M Vandeweghe	director	1601 W. DIEHL ROAD, NAPERVILLE IL 60563
Kevin G. Cramton	director	502 SAINT DAVIDS AVENUE, WAYNE PA 19087
Delaney Murchison Bellinger	director	524 E. 24TH STREET, HOUSTON TX 77008