CPN  Calpine Corporation

Exchange

NYSE

Sector

Public Utilities

Industry

Electric Utilities: Central

Market Cap.

4.73B

Vuru Grade

40.33/100

Current Price

$13.10
-0.21 (-1.58%)

Growth Price

$18.50
Undervalued by 41.23%

Company Metrics

  • P/E 19.91
  • P/S 0.65
  • P/B 1.5
  • EPS 0.66
  • Cash ROIC 1.58%
  • Cash Ratio 0.11
  • Dividend 0 / 0%
  • Avg. Vol. 5.01M
  • Shares 361.07M
  • Market Cap. 4.73B

Company Description

Calpine Corporation, an independent wholesale power generation company, owns and operates natural gas-fired and geothermal power plants in North America. It operates natural gas-fired combustion turbines and renewable geothermal conventional steam turbines. The company sells wholesale power, steam, capacity, renewable energy credits, and ancillary services to utilities, independent electric system... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Calpine +5% as M&A speculation ramps up
Seeking Alpha - May 17, 2017
Calpine (CPN +4.8%) shares have spiked higher over the past hour on reports that the company's sale auction has moved into the second round, with five potential suitors involved including P-E firms Blackstone (BK -2%) and Carlyle (CG -3.5%).
Calpine Q1 Conference Call - Proceeding As Planned
Seeking Alpha - May 5, 2017
In response to this decline, Calpine has been sending out the message that it is a strong free cash flow generator and that it will be using this cash to create shareholder value.
Pete Najarian Sees Unusual Options Activity In Calpine
Benzinga - May 23, 2017
On CNBC's "Fast Money Halftime Report", Pete Najarian said that he noticed unusually high options activity in Calpine Corporation (NYSE: CPN) at the end of the trading session on Monday. He said that somebody bought 10,000 contracts of the September ...
Lookout for Price Target? Calpine Corporation (CPN), Pacific Biosciences of ...
StockNewsJournal - 10 hours ago
Calpine Corporation (CPN) have shown a high EPS growth of 21.60% in the last 5 years and has earnings decline of -59.90% yoy.
Calpine Corporation (CPN) Is Now On The Radar Because Of Its Technical Chart
NY Stock News - 13 hours ago
Calpine Corporation (CPN) is now trading with a very clear set of technicals. Taken together they paint a very compelling picture of how investors and traders should be approaching CPN.
2 Stocks to keep an eye on Today: Calpine Corporation (CPN), Morgan Stanley (MS)
StockNewsJournal - May 23, 2017
Calpine Corporation (NYSE:CPN) market capitalization at present is $4.64B at the rate of $13.40 a share. The firm's price-to-sales ratio was noted 0.67 in contrast with an overall industry average of 0.97.
Calpine Corporation (CPN) PT Lowered to $14 at Goldman Sachs
StreetInsider.com - May 1, 2017
Goldman Sachs lowered its price target on Calpine Corporation (NYSE: CPN) to $14.00 (from $15.00) while maintaining a Buy rating.
Calpine Corporation (CPN) Moves Higher on Volume Spike for May 04 - Equities.com
Buy/Sell Signals for Ciena Corporation (CIEN) and Calpine Corporation (CPN)
USA Commerce Daily - 12 hours ago
Shares of Ciena Corporation (NYSE:CIEN) are on a recovery track as they have regained 39.8% since bottoming out at $16.78 on May.
All You Need To Know About Calpine Corporation (CPN) Revealed Perfectly In The ...
NY Stock News - May 22, 2017
The technicals for Calpine Corporation (CPN) have taken shape, and with them a comprehensive picture has emerged. This is the current state of play as presented by the current technical setup.
Calpine Explores Possibility of Sale
Power Engineering Magazine - May 11, 2017
Calpine Corp. is working with investment bankers at Lazard to potentially find buyers for the company, the Wall Street Journal reported.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for CPN to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate CPN's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$13.10 Current Price

$18.50 Growth Price (DCF)

Undervalued by 41.23%


Growth Rate Assumed by Market: -24.05%


Future Free Cash Flow Growth Rate: -0.5%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$21.30 Book Price

Undervalued by 62.62%


Poor Cash Return on Invested Capital over the past 5 years

CPN has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

CPN has only created $1.58 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 4.00M -26.00M 362.00M 298.00M 541.00M
divided by
Invested Capital 13.95B 14.09B 14.46B 14.88B 15.20B
Cash ROIC 0.03% -0.18% 2.50% 2.00% 3.56%

Poor Return on Equity over the past 5 years

CPN has shown an inability to deliver strong results for shareholders. This could be due to poor management, CPN operating in a highly competitive industry, or having a weak business in general.

CPN has only generated $9.07 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 199.00M 18.00M 961.00M 249.00M 111.00M
divided by
Stockholders' Equity 3.99B 3.51B 3.38B 3.11B 3.27B
Return on Equity 4.98% 0.51% 28.45% 8.01% 3.40%

Good Business Performance over the past 10 years

It's likely CPN has been unable to maintain profitability in tough economic times, making it a somewhat cyclical business. The other possibility is CPN has expended significant capital on items such as property, plant and equipment in specific years. Look for correlations.

CPN has created positive free cash flow for 7 or 8 of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow -14.00M 351.00M 582.00M 560.00M 61.00M 4.00M -26.00M 362.00M 298.00M 541.00M

Weak Balance Sheet

CPN's financial position is not ideal. The key is to check whether CPN is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 1.92B 1.66B 2.11B 2.05B 1.25B 1.28B 941.00M 717.00M 906.00M 418.00M
Current Assets 4.53B 7.50B 4.10B 3.43B 3.56B 2.83B 2.86B 4.22B 4.10B 4.43B
Total Assets 18.48B 20.74B 16.65B 17.26B 17.37B 16.55B 16.56B 18.38B 18.83B 19.32B
Current Liabilities 3.60B 5.62B 2.75B 1.79B 2.16B 1.32B 1.53B 3.20B 3.05B 3.70B
Total Liabilities 23.13B 16.37B 12.20B 12.61B 13.07B 12.56B 13.05B 15.00B 15.72B 16.05B
Stockholder' Equity -4.65B 4.37B 4.45B 4.64B 4.30B 3.99B 3.51B 3.38B 3.11B 3.27B
Current Ratio 1.26 1.34 1.49 1.92 1.65 2.15 1.87 1.32 1.34 1.20
TL-to-TA 1.25 0.79 0.73 0.73 0.75 0.76 0.79 0.82 0.83 0.83

Low or No Reinvestment of Profits over the past 10 years

CPN has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to CPN operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings -7.69B -7.69B -7.54B -7.51B -7.70B -7.50B -7.49B -6.54B -6.31B -6.21B
Retained Earnings Growth - -0.05% 1.94% 0.41% -2.53% 2.58% 0.19% 12.64% 3.59% 1.46%

Competitive Industry over the past 10 years

CPN is likely operating in an industry with medium to low barriers to entry. This may mean that CPN doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that CPN invests heavily in R&D and Sales, General & Administrative expenses.

Only $5.52 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 2.69B 10.00M 145.00M 31.00M -189.00M 199.00M 18.00M 961.00M 249.00M 111.00M
divided by
Revenue 7.97B 9.94B 6.56B 6.55B 6.80B 5.48B 6.30B 8.03B 6.47B 6.72B
Net Profit Margin 33.79% 0.10% 2.21% 0.47% -2.78% 3.63% 0.29% 11.97% 3.85% 1.65%

Satisfactory Pricing Power over the past 10 years

Consistency is vital. CPN has been able to maintain gross margins fairly consistently, which is a strong indication of their ability to raise prices with inflation. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$25.34 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 2.29B 2.66B 1.22B 1.70B 1.55B 1.53B 1.67B 2.17B 1.69B 1.55B
divided by
Revenue 7.97B 9.94B 6.56B 6.55B 6.80B 5.48B 6.30B 8.03B 6.47B 6.72B
Gross Margin 28.70% 26.73% 18.51% 26.02% 22.75% 27.97% 26.50% 27.01% 26.07% 23.11%

High Capital Intensity over the past 10 years

CPN spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

776.70% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 196.00M 143.00M 179.00M 369.00M 714.00M 649.00M 575.00M 492.00M 565.00M 489.00M
divided by
Net Income 2.69B 10.00M 145.00M 31.00M -189.00M 199.00M 18.00M 961.00M 249.00M 111.00M
Capital Expenditure Ratio 7.28% 1,430.00% 123.45% 1,190.32% -377.78% 326.13% 3,194.44% 51.20% 226.91% 440.54%

No Dividend History over the past 10 years

CPN has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 4.79B 4.86B 4.86B 487.29M 485.38M 471.34M 444.77M 409.36M 364.89M 356.11M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End - 6.60 11.06 13.33 16.33 17.75 19.47 22.31 14.21 11.43
Dividend Yield - - - - - - - - - -

Strong History of Stock Buybacks over the past 10 years

CPN has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 4.79B 4.86B 4.86B 487.29M 485.38M 471.34M 444.77M 409.36M 364.89M 356.11M
Stock Bought Back - -1.25% -0.16% 898.00% 0.39% 2.98% 5.97% 8.65% 12.19% 2.46%
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