October 24, 2014 - 12:17 PM EDT
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Core Laboratories: Don't Buy Just Yet - $115 Fair Value Entry Point

Recent Sell-Off

Core Laboratories (NYSE:CLB) reported its Q3 results and lowered Q4 guidance on October 22nd which caused the share price to decrease more than 8%. The company's closing price of $128.62 is more than 40% lower than its April 21st closing price of $216.51. Now I have revisited and updated my earlier analysis to see if CLB's recent sell-off presents a buying opportunity.

Levered Returns Valuation Model

I have inputted reasonable and slightly aggressive assumptions into my Levered Return's discounted cash flow "DCF" analysis below. The conclusion implies CLB is still trading at an 11% premium even after the recent sell-off. With an unimpressive Q3 in the books, I project 1.8% revenue growth for fiscal year 2014 and 5% growth for fiscal year 2015 as falling oil prices continue to be a concern. I then project 10% revenue growth through the remainder of the projection period. I also project EBITDA margins to reach 35% by fiscal year 2015. Full detail shown…

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Source: SeekingAlpha (October 24, 2014 - 12:17 PM EDT)

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