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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Arrow Financial Corporation (XNAS:AROW) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
AROW
Name:
ARROW FINANCIAL CORPORATION (XNAS:AROW)
Sector:
13.65M
Industry:
Banks�Regional
CEO:
Mr. Thomas Murphy
Total Employees:
512
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 775.89% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ARROW FINANCIAL CORPORATION(AROW) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BANKS�REGIONAL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
31.46
One Month Price Target:
$31.57
Six Month Price Target :
$32.1
Likely Price in One Year's Time:
Ticker:
$32.74
Likely Trading Range Today Under (Normal Volatility)
$31.33
Price Upper limit ($) :
$31.6
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$29.82
This week:
$27.8
This month :
$24.14
Other Primary facts
Market Cap:
508.85M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
16.03M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.84%
-12.16%
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:
$39.06
$35.60
$23.86
$27.32
Medium risk (<10%) entry points
Buy Call
Sell Call
$34.47
Buy Put:
Sell Put:
$33.73
$28.44
$29.19
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
AROW
Sharpe Ratio:
0.07%
Comparison:
AROW, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -94.62% lower than the industry
& is -97.10% lower than the market/S&P 500 average
Average Returns/Yield of
AROW
Daily returns:
0.01%
Weekly returns:
0.05%
Monthly returns:
0.21%
Yearly returns:
10.91%
Comparison of returns:
Average annual returns/yield (last 3 years) is -76.84% below industry average
Classification:
AROW, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.43
Statistical test of Returns:
AROW has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.54%
Weekly Volatility:
5.68%
Monthly Volatility:
11.36%
Yearly Volatility:
39.35%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.00%
Volatility in last five trading days has been -21.38% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.21%
Weekly VaR:
-11.64%
Monthly VaR:
-23.28%
How Much Can the price of
AROW
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-80.65%
This translates to price declining to:
$25.02
This translates to price declining to:
$6.09
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
AROW is a 64.33% riskier investment compared to the market/S&P 500 & is 40.78% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -11.08% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
AROW
Beta in relation to market/S&P 500--0.60
Expected beta in 1 year's time:
0.538
Expected beta in 3 year's time:
0.761
Unlevered (debt free) Beta:
0.544
Beta in relation to Nasdaq (XNAS):
0.569
Beta in relation to all global stocks::
1.023
Beta Comparison & Analysis
Beta of competitors/peers::
1.19
Beta is -49.32% lower than peers
Average Industry Beta:
0.964
Beta is -37.41% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
9.30%
Sustainable growth rate is 1.92% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.048
Alpha is -509.81% below industry average alpha yield
Alpha is -303% below the market average
Analysis of Cost of Capital of
AROW
Equity cost of capital:
0.073
Equity cost of capital is -25.33% below industry mean WACC
Unlevered (without debt) cost of capital:
6.57%
Before-tax cost of debt:
9.53%
After-tax cost of debt:
7.53%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
7.53%
WACC is -36.60% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$8.98
Revenue growth rate per share of (3Y):
1.41
Annual revenue growth rate is -18.25% below industry average
EPS:
$3.06
Expected Annual growth rate of EPS (3Y):
9.43%
Expected future EPS growth rate is -21.60% lower than the Banks�Regional industry
Free cash flow (FCF) per share:
$3.43
Balance sheet equity growth per share: 11.32%
Equity growth rate per share is -70.78% lower than the industry
Debt per share
$3.13
EBITDA per share
$4.78
Valuation Analysis Today of
AROW
P/E Ratio:
10.57
P/E Ratio of Competitors/Peers:
11.22
P/E ratio is -5.84% lower than main peers & is -14.82% lower than the industry
Stock price/value with industry average P/E ratio: $37.97
AROW is -17.15% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $33.19
Present value of the expected future dividends only: $15.42
P/S (Price to Sales ratio):
3.5
Price to sales ratio is -18.10% below the industry mean
P/B (Price to book value ratio):
1.41
Price to free cash flow: 9.16
Price to free cash flow ratio is -61.97% lower than the industry
Net income growth rate (3Y):
35.08%
Net income growth rate is -36.31% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 8.80%
Dividend yeild: 3.37%
Previous Dividend: $0.27
Previous adjusted dividend: $0.27
Previous Dividend: $1.06
Expected next dividend best case: $0.27
Expected next dividend worst case: $0.27
Average dividend payment (long-term): $0.26
Average dividend increase/decrease (growth rate) % per period: 0.38%
Expected next dividend payment date: 13/09/2022
Expected next dividend record date: 30/08/2022
-
Previous dividend payment date: 15/06/2022
Previous dividend record date: 06/01/2022
-
Dividend History:
2022-05-31--$0.27
2021-12-01--$0.26
2021-06-01--$0.26
2022-02-28--$0.27
2021-09-02--$0.26
2021-03-01--$0.26
Dividend growth rate is -98.39% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
14.04%
Net debt to equity ratio:
-122.44%
Debt to assets ratio:
1.21%
Net debt to assets ratio:
-10.52%
Debt-to-asset ratio is -99.28% below industry average
Ability to repay debt:
Interest coverage ratio:
16.02
Interest coverage ratio is 1832.85% more than industry average
Looking forward:
Debt growth rate:
-0.07%
Annual debt growth is -122% lower than industry average debt growth rate
Debt repayment rate in last quarter: 28.52%
Analysis of Key Statistics
Correlation of price movement with the market:
0.533
Statistical significance of correlation:
AROW has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.501
Stock price is 6.35% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.501
Correlation of price movement with Nasdaq (^IXIC):
0.012
Covariance of price movement with the market:
0.018
Kurtosis
9.916
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:
0.65
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
AROW
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
-
Effective Tax Rate:
23.13%
Effective tax rate is 7.36% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
13.76%
Return on equity (ROE) is 15.33% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.18%
Return on assets (ROA) is -48.69% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 0.1 years
Stock based compensation to net income ratio:
0.43%
In-depth Efficiency Analysis
Revenue generated per employee:
281.1K
Each employee generates -26% less revenue than industry average revenue per employee
EBITDA generated per employee:
149.5K
Each employee generates -34% less EBITDA than industry average revenue per employee
Profit generated per employee:
96.0K
Each employee generates -32% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
26.7K
Each employee generates -68% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.7M
Each employee generates -68% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
AROW
RMG ACQUISITION CORP. III (XNAS:RMGC)
Vector Acquisition Corp II (XNAS:VAQC)
DIAMOND HILL INVESTMENT GROUP, INC. (XNAS:DHIL)
CAMBRIDGE BANCORP (XNAS:CATC)
ATLANTICUS HOLDINGS CORPORATION (XNAS:ATLC)
OPORTUN FINANCIAL CORPORATION (XNAS:OPRT)
SONDER HOLDINGS INC (XNAS:SOND)
FIRST FINANCIAL CORPORATION (XNAS:THFF)
BANK FIRST CORPORATION (XNAS:BFC)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
143.95M
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:
-
-
-
47.79M
48.87M
-
-
-
116.80M
4.78M
7.82M
76.54M
-
49.15M
63.94M
14.79M
49.15M
Statement of Cash Flow
Date:
Period:
1.95M
Differed Income Tax :
- 462.00K
Stock Based Compensation :
209.00K
Change in Working Capital :
1.67M
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
828.00K
Net Cash Provided by Operating Activities:
16.77M
Investments in PP&E:
- 3123.00K
Net Acquisitions:
-
Purchases of Investments:
- 79999.00K
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
487.58M
582.43M
1.07B
-
-
-
-
48.48M
21.87M
1.82M
780.97M
-
-
853.14M
5.01B
4.16B
-
-
-
-
-
-
50.16M
-
50.16M
3.85B
3.80B
20.80M
62.33M
- 20797.0K
294.91M
March 31, 2022 at 6:00:00 AM
-
357.24M
4.16B
1.36B
50.16M
- 437422.0K
26.17M
- 69217.00K
- 126167.00K
- 20013.00K
474.00K
- 2093.00K
- 4325.00K
165.24M
139.28M
-
29.88M
487.58M
457.70M
16.77M
- 3123.00K
13.65M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
AROW
2023
2024
2025
2026
2027
$38.71
$40.27
$41.91
$43.61
$45.37