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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Armstrong World Industries, Inc. (XNYS:AWI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
AWI
Name:
ARMSTRONG WORLD INDUSTRIES, INC. (XNYS:AWI)
Sector:
4.70M
Industry:
Building Products & Equipment
CEO:
Mr. Victor Grizzle
Total Employees:
2,950
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -123.08% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ARMSTRONG WORLD INDUSTRIES, INC.(AWI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BUILDING PRODUCTS & EQUIPMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
83.22
One Month Price Target:
$83.79
Six Month Price Target :
$86.65
Likely Price in One Year's Time:
Ticker:
$90.09
Likely Trading Range Today Under (Normal Volatility)
$82.88
Price Upper limit ($) :
$83.58
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$78.96
This week:
$73.7
This month :
$64.19
Other Primary facts
Market Cap:
3.84B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
46.39M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
20.45%
-15.69%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$102.98
$93.97
$63.46
$72.47
Medium risk (<10%) entry points
Buy Call
Sell Call
$91.04
Buy Put:
Sell Put:
$89.12
$75.37
$77.32
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
AWI
Sharpe Ratio:
0.18%
Comparison:
AWI, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -92.94% lower than the industry
& is -92.28% lower than the market/S&P 500 average
Average Returns/Yield of
AWI
Daily returns:
0.01%
Weekly returns:
0.07%
Monthly returns:
0.26%
Yearly returns:
21.19%
Comparison of returns:
Average annual returns/yield (last 3 years) is -85.00% below industry average
Classification:
AWI, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.98
Statistical test of Returns:
AWI has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.50%
Weekly Volatility:
5.58%
Monthly Volatility:
11.16%
Yearly Volatility:
38.67%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.53%
Volatility in last five trading days has been -78.62% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.11%
Weekly VaR:
-11.43%
Monthly VaR:
-22.87%
How Much Can the price of
AWI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-79.22%
This translates to price declining to:
$66.51
This translates to price declining to:
$17.29
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
AWI is a 61.41% riskier investment compared to the market/S&P 500 & is 38.28% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -19.16% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
AWI
Beta in relation to market/S&P 500--1.23
Expected beta in 1 year's time:
0.944
Expected beta in 3 year's time:
1.334
Unlevered (debt free) Beta:
0.641
Beta in relation to Nasdaq (XNAS):
0.782
Beta in relation to all global stocks::
0.863
Beta Comparison & Analysis
Beta of competitors/peers::
1.408
Beta is -12.80% lower than peers
Average Industry Beta:
1.393
Beta is -11.84% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
26.29%
Sustainable growth rate is -20.44% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.084
Alpha is -198.64% below industry average alpha yield
Alpha is -534% below the market average
Analysis of Cost of Capital of
AWI
Equity cost of capital:
0.116
Equity cost of capital is -8.90% below industry mean WACC
Unlevered (without debt) cost of capital:
6.03%
Before-tax cost of debt:
3.28%
After-tax cost of debt:
2.59%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.59%
WACC is -21.50% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$24.52
Revenue growth rate per share of (3Y):
7.18
Annual revenue growth rate is -38.46% below industry average
EPS:
$4.06
Expected Annual growth rate of EPS (3Y):
-4.36%
Expected future EPS growth rate is -153.29% lower than the Building Products & Equipment industry
Free cash flow (FCF) per share:
$2.22
Balance sheet equity growth per share: 415.84%
Equity growth rate per share is 737.06% higher than the industry
Debt per share
$13.95
EBITDA per share
$7.91
Valuation Analysis Today of
AWI
P/E Ratio:
20.61
P/E Ratio of Competitors/Peers:
14.39
P/E ratio is 43.25% higher than main peers & is -22.86% lower than the industry
Stock price/value with industry average P/E ratio: $108.50
AWI is -23.30% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $19.76
Present value of the expected future dividends only: $9.11
P/S (Price to Sales ratio):
3.39
Price to sales ratio is 19.42% above the industry mean
P/B (Price to book value ratio):
7.18
Price to free cash flow: 37.53
Price to free cash flow ratio is -46.02% lower than the industry
Net income growth rate (3Y):
5.60%
Net income growth rate is -93.41% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 5.67%
Dividend yeild: 1.09%
Previous Dividend: $0.23
Previous adjusted dividend: $0.23
Previous Dividend: $0.90
Expected next dividend best case: $0.24
Expected next dividend worst case: $0.22
Average dividend payment (long-term): $0.21
Average dividend increase/decrease (growth rate) % per period: 1.50%
Expected next dividend payment date: 17/08/2022
Expected next dividend record date: 08/03/2022
Expected next dividend declaration date: 19/07/2022
Previous dividend payment date: 19/05/2022
Previous dividend record date: 05/05/2022
Previous dividend declaration date: 20/04/2022
Dividend History:
2022-05-04--$0.23
2021-11-03--$0.23
2021-05-05--$0.21
2022-03-02--$0.23
2021-08-04--$0.21
2021-03-03--$0.21
Dividend growth rate is -92.12% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
120.39%
Net debt to equity ratio:
112.44%
Debt to assets ratio:
37.89%
Net debt to assets ratio:
35.39%
Debt-to-asset ratio is -20.17% below industry average
Ability to repay debt:
Interest coverage ratio:
16.45
Interest coverage ratio is -96.08% less than industry average
Looking forward:
Debt growth rate:
-11.13%
Annual debt growth is -285% lower than industry average debt growth rate
Debt repayment rate in last quarter: 2.53%
Analysis of Key Statistics
Correlation of price movement with the market:
0.686
Statistical significance of correlation:
AWI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.604
Stock price is 13.44% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.604
Correlation of price movement with Nasdaq (^IXIC):
0.045
Covariance of price movement with the market:
0.066
Kurtosis
11.408
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.308
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
AWI
Gross Profit Margin Ratio:
148%
Operating Profit Margin Ratio:
23.66%
Operating profit margin is -167.63% lower than the industry
Net Profit Margin Ratio:
148%
Effective Tax Rate:
23.85%
Effective tax rate is 8.90% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
35.75%
Return on equity (ROE) is 60.84% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
11.25%
Return on assets (ROA) is 5.95% higher than the industry
Financial Leverage:
1.6x
Current Ratio:
1.65
Current ratio is -44.23% below industry average
Cash Conversion Cycle (days):
47.5
Cash conversion cycle is 44.49% above industry average
The remaining useful life of property plant & equipment is: 2.0 years
Stock based compensation to net income ratio:
1.51%
In-depth Efficiency Analysis
Revenue generated per employee:
385.5K
Each employee generates -35% less revenue than industry average revenue per employee
EBITDA generated per employee:
124.3K
Each employee generates -2% less EBITDA than industry average revenue per employee
Profit generated per employee:
65.2K
Each employee generates -18% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
1.6K
Each employee generates -83% less free cash flow than industry average revenue per employee
Assets/Capital per employee
471.2K
Each employee generates -83% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
AWI
CLEAN HARBORS, INC. (XNYS:CLH)
AIR LEASE CORPORATION (XNYS:AL)
HAYWARD HOLDINGS, INC. (XNYS:HAYW)
VALMONT INDUSTRIES, INC. (XNYS:VMI)
FTI CONSULTING, INC. (XNYS:FCN)
MANPOWERGROUP INC. (XNYS:MAN)
CURTISS-WRIGHT CORPORATION (XNYS:CW)
SPIRIT AEROSYSTEMS HOLDINGS, INC. (XNYS:SPR)
ATKORE INC (XNYS:ATKR)
Current Analyst Ratings
Strong buy�4%
Buy�17%
Hold�33%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.14B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
717.00M
420.30M
-
-
240.30M
-
-
240.30M
-
22.30M
92.10M
366.80M
269.10M
192.20M
252.40M
60.20M
192.20M
Statement of Cash Flow
Date:
Period:
21.20M
Differed Income Tax :
1.10M
Stock Based Compensation :
2.90M
Change in Working Capital :
- 32900.00K
Accounts Receivables:
-
Other Working Capital:
11.30M
Other Non-Cash Items:
- 20000.00K
Net Cash Provided by Operating Activities:
16.70M
Investments in PP&E:
- 12000.00K
Net Acquisitions:
12.20M
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
76.10M
-
76.10M
114.50M
103.90M
23.60M
318.10M
578.60M
167.10M
416.90M
57.50M
-
169.90M
1.39B
-
1.71B
96.10M
33.40M
14.00M
-
63.30M
192.80M
647.20M
158.70M
977.70M
-
1.17B
600.00K
1.04B
- 97700.0K
-
March 31, 2022 at 6:00:00 AM
957.30M
537.60M
1.71B
-
680.60M
604.5M
-
-
200.00K
- 16800.00K
-
- 30000.00K
- 10900.00K
18.50M
- 39200.00K
300.00K
- 22000.00K
76.10M
98.10M
16.70M
- 12000.00K
4.70M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
AWI
2023
2024
2025
2026
2027
$90.29
$97.74
$105.80
$114.53
$123.98