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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Avalara, Inc. (XNYS:AVLR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
AVLR
Name:
AVALARA, INC. (XNYS:AVLR)
Sector:
- 31119.00K
Industry:
Software�Application
CEO:
Mr. Scott McFarlane
Total Employees:
4,465
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -108.98% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF AVALARA, INC.(AVLR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�APPLICATION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
91.98
One Month Price Target:
$92.52
Six Month Price Target :
$95.2
Likely Price in One Year's Time:
Ticker:
$98.41
Likely Trading Range Today Under (Normal Volatility)
$91.52
Price Upper limit ($) :
$92.62
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$85.42
This week:
$77.31
This month :
$62.64
Other Primary facts
Market Cap:
8.11B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
88.27M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.44%
-13.98%
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:
$122.41
$108.38
$61.55
$75.58
Medium risk (<10%) entry points
Buy Call
Sell Call
$103.81
Buy Put:
Sell Put:
$100.81
$80.11
$83.15
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
AVLR
Sharpe Ratio:
2.51%
Comparison:
AVLR, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 160.79% higher than the industry
& ratio is 10.29% higher than the market/S&P 500 average
Average Returns/Yield of
AVLR
Daily returns:
0.10%
Weekly returns:
0.49%
Monthly returns:
1.95%
Yearly returns:
9.94%
Comparison of returns:
Average annual returns/yield (last 3 years) is 135.10% above industry average
Classification:
AVLR, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.83
Statistical test of Returns:
AVLR has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.52%
Weekly Volatility:
7.87%
Monthly Volatility:
15.74%
Yearly Volatility:
54.54%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.70%
Volatility in last five trading days has been -80.01% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.13%
Weekly VaR:
-15.95%
Monthly VaR:
-31.90%
How Much Can the price of
AVLR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-27%
Worst case (decline):
>85%
This translates to price declining to:
$67.06
This translates to price declining to:
$13.80
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
AVLR is a 125.13% riskier investment compared to the market/S&P 500 & is 92.87% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -2.07% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
AVLR
Beta in relation to market/S&P 500--1.04
Expected beta in 1 year's time:
0.65
Expected beta in 3 year's time:
0.919
Unlevered (debt free) Beta:
0.526
Beta in relation to Nasdaq (XNAS):
1.238
Beta in relation to all global stocks::
0.676
Beta Comparison & Analysis
Beta of competitors/peers::
1.542
Beta is -32.48% lower than peers
Average Industry Beta:
1.335
Beta is -22.07% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.131
Alpha is -654.12% below industry average alpha yield
Alpha is 833% higher than market/& is unsustainably high
Analysis of Cost of Capital of
AVLR
Equity cost of capital:
0.103
Equity cost of capital is -16.41% below industry mean WACC
Unlevered (without debt) cost of capital:
5.19%
Before-tax cost of debt:
0.37%
After-tax cost of debt:
0.30%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.30%
WACC is -28.40% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$8.50
Revenue growth rate per share of (3Y):
7.83
Annual revenue growth rate is -81.19% below industry average
EPS:
-$1.59
Expected Annual growth rate of EPS (3Y):
28.71%
Expected future EPS growth rate is 4.96% higher than the Software�Application industry
Free cash flow (FCF) per share:
$0.13
-
-
Debt per share
$11.39
EBITDA per share
-$0.93
Valuation Analysis Today of
AVLR
P/E Ratio:
0
P/E Ratio of Competitors/Peers:
13.33
P/E ratio is -100.00% lower than main peers & is higher than the industry
-
AVLR is -132.57% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
10.83
Price to sales ratio is -5.62% below the industry mean
P/B (Price to book value ratio):
7.83
Price to free cash flow: 701.77
Price to free cash flow ratio is 701.27% higher than the industry
Net income growth rate (3Y):
-20.80%
Net income growth rate is -108.52% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
97.06%
Net debt to equity ratio:
-44.81%
Debt to assets ratio:
37.61%
Net debt to assets ratio:
-17.37%
Debt-to-asset ratio is -31.44% below industry average
Ability to repay debt:
Interest coverage ratio:
-21.58
Interest coverage ratio is -140.63% less than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.513
Statistical significance of correlation:
AVLR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.503
Stock price is 2.07% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.503
Correlation of price movement with Nasdaq (^IXIC):
-0.061
Covariance of price movement with the market:
-0.124
Kurtosis
1.608
Returns are more concentrated around the mean (platykurtic), compared to a normal distribution
Skewness of returns:
0.054
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
AVLR
Gross Profit Margin Ratio:
283%
Operating Profit Margin Ratio:
-15.50%
Operating profit margin is -19.09% lower than the industry
Net Profit Margin Ratio:
283%
Effective Tax Rate:
-0.98%
Effective tax rate is -103.70% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-12.33%
Return on equity (ROE) is -5.70% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-4.78%
Return on assets (ROA) is 24.46% higher than the industry
Financial Leverage:
1.6x
Current Ratio:
3.15
Current ratio is 5.01% above industry average
Cash Conversion Cycle (days):
59.7
Cash conversion cycle is -37.05% below industry average
The remaining useful life of property plant & equipment is: 2.6 years
Stock based compensation to net income ratio:
-25.55%
In-depth Efficiency Analysis
Revenue generated per employee:
168.0K
Each employee generates -51% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 18.4K
Each employee generates -271% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 28.6K
Each employee generates 64% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 7.0K
Each employee generates -10% less free cash flow than industry average revenue per employee
Assets/Capital per employee
205.6K
Each employee generates -10% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 39.83%
Growth rate in R&D investment/expenditure is 2505.20% higher than the industry
Competitors/Peer firms of
AVLR
BLACK KNIGHT, INC. (XNYS:BKI)
Tuya Inc. (XNYS:TUYA)
Paysafe Limited (XNYS:PSFE)
SENSATA TECHNOLOGIES HOLDING PLC (XNYS:ST)
Iprochim SA (XBSE:IPHI)
Bill.com Holdings Inc (XNYS:BILL)
JUNIPER NETWORKS, INC. (XNYS:JNPR)
GENPACT LIMITED (XNYS:G)
DXC TECHNOLOGY COMPANY (XNYS:DXC)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�25%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
749.91M
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:
220.29M
529.62M
179.09M
148.64M
466.79M
318.15M
-
645.88M
270.00K
3.81M
40.59M
- 82172.00K
- 116261.00K
- 127802.00K
- 126566.00K
1.24M
- 127802.00K
Statement of Cash Flow
Date:
Period:
11.13M
Differed Income Tax :
225.00K
Stock Based Compensation :
32.65M
Change in Working Capital :
- 34428.00K
Accounts Receivables:
326.00K
Other Working Capital:
18.41M
Other Non-Cash Items:
- 88.00K
Net Cash Provided by Operating Activities:
- 23066.00K
Investments in PP&E:
- 2148.00K
Net Acquisitions:
-
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
1.48B
-
1.48B
115.05M
-
158.67M
1.76B
92.59M
671.43M
89.78M
-
-
64.30M
918.10M
-
2.67B
18.21M
11.85M
3.57M
303.39M
224.65M
558.10M
1.01B
67.17M
1.08B
-
1.64B
9.00K
- 735426.00K
- 4775.0K
1.78B
March 31, 2022 at 6:00:00 AM
866.17M
1.04B
2.67B
-
1.02B
- 464313.0K
-
- 5905.00K
- 8053.00K
-
-
-
-
929.00K
929.00K
- 160.00K
- 30350.00K
1.58B
1.61B
- 23066.00K
- 8053.00K
- 31119.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
AVLR
2023
2024
2025
2026
2027
$79.29
$84.83
$90.77
$97.12
$103.91