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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Avantor, Inc. (XNYS:AVTR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
AVTR
Name:
AVANTOR, INC. (XNYS:AVTR)
Sector:
127.70M
Industry:
Specialty Chemicals
CEO:
Mr. Michael Stubblefield
Total Employees:
13,500
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 1355.45% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF AVANTOR, INC.(AVTR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY CHEMICALS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
24.5
One Month Price Target:
$24.68
Six Month Price Target :
$25.6
Likely Price in One Year's Time:
Ticker:
$26.71
Likely Trading Range Today Under (Normal Volatility)
$24.4
Price Upper limit ($) :
$24.64
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$23.06
This week:
$21.27
This month :
$18.05
Other Primary facts
Market Cap:
16.49B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
674.03M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
24.67%
-17.38%
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:
$31.19
$28.10
$17.81
$20.90
Medium risk (<10%) entry points
Buy Call
Sell Call
$27.10
Buy Put:
Sell Put:
$26.44
$21.89
$22.56
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
AVTR
Sharpe Ratio:
2.55%
Comparison:
AVTR, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 20.17% higher than the industry
& ratio is 11.68% higher than the market/S&P 500 average
Average Returns/Yield of
AVTR
Daily returns:
0.08%
Weekly returns:
0.41%
Monthly returns:
1.66%
Yearly returns:
24.57%
Comparison of returns:
Average annual returns/yield (last 3 years) is -19.08% below industry average
Classification:
AVTR, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.71
Statistical test of Returns:
AVTR has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.91%
Weekly Volatility:
6.50%
Monthly Volatility:
13.00%
Yearly Volatility:
45.03%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.80%
Volatility in last five trading days has been -72.64% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.89%
Weekly VaR:
-13.16%
Monthly VaR:
-26.33%
How Much Can the price of
AVTR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
-91.20%
This translates to price declining to:
$19.03
This translates to price declining to:
$2.16
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
AVTR is a 85.82% riskier investment compared to the market/S&P 500 & is 59.19% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -13.52% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
AVTR
Beta in relation to market/S&P 500--1.34
Expected beta in 1 year's time:
0.907
Expected beta in 3 year's time:
1.282
Unlevered (debt free) Beta:
0.442
Beta in relation to Nasdaq (XNAS):
0.944
Beta in relation to all global stocks::
0.923
Beta Comparison & Analysis
Beta of competitors/peers::
0.943
Beta is 42.31% higher than peers
Average Industry Beta:
1.164
Beta is 15.23% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
16.25%
Sustainable growth rate is -43.75% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.075
Alpha is -43.91% below industry average alpha yield
Alpha is 480% higher than market/& is unsustainably high
Analysis of Cost of Capital of
AVTR
Equity cost of capital:
0.123
Equity cost of capital is 10.92% above industry mean WACC
Unlevered (without debt) cost of capital:
4.06%
Before-tax cost of debt:
245.86%
After-tax cost of debt:
194.23%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
194.23%
WACC is 54.79% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$11.20
Revenue growth rate per share of (3Y):
3.79
Annual revenue growth rate is 335.22% above the industry average
EPS:
$0.86
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$1.39
-
-
Debt per share
$0.00
EBITDA per share
$1.77
Valuation Analysis Today of
AVTR
P/E Ratio:
26.47
P/E Ratio of Competitors/Peers:
28.52
P/E ratio is -7.19% lower than main peers & is -29.34% lower than the industry
Stock price/value with industry average P/E ratio: $32.21
AVTR is -23.95% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.19
Price to sales ratio is -20.73% below the industry mean
P/B (Price to book value ratio):
3.79
Price to free cash flow: 17.68
Price to free cash flow ratio is -34.59% lower than the industry
Net income growth rate (3Y):
-661.14%
Net income growth rate is 1095.89% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 2.76%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
231.12%
Net debt to equity ratio:
-5.48%
Debt to assets ratio:
69.80%
Net debt to assets ratio:
-1.73%
Debt-to-asset ratio is 29.02% above industry average
Ability to repay debt:
Interest coverage ratio:
10.83
Interest coverage ratio is -48.51% less than industry average
Looking forward:
Debt growth rate:
42.59%
Annual debt growth is -88% lower than industry average debt growth rate
Debt repayment rate in last quarter: 100.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.581
Statistical significance of correlation:
AVTR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.58
Stock price is 0.30% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.58
Correlation of price movement with Nasdaq (^IXIC):
-0.024
Covariance of price movement with the market:
-0.041
Kurtosis
13.331
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.389
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
AVTR
Gross Profit Margin Ratio:
137%
Operating Profit Margin Ratio:
13.42%
Operating profit margin is -104.76% lower than the industry
Net Profit Margin Ratio:
137%
Effective Tax Rate:
11.79%
Effective tax rate is -34.32% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
13.38%
Return on equity (ROE) is -53.47% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.21%
Return on assets (ROA) is 60.42% higher than the industry
Financial Leverage:
3.3x
Current Ratio:
1.8
Current ratio is -32.82% below industry average
Cash Conversion Cycle (days):
20
Cash conversion cycle is -67.54% below industry average
The remaining useful life of property plant & equipment is: 3.6 years
Stock based compensation to net income ratio:
1.84%
In-depth Efficiency Analysis
Revenue generated per employee:
559.3K
Each employee generates -25% less revenue than industry average revenue per employee
EBITDA generated per employee:
88.1K
Each employee generates -11% less EBITDA than industry average revenue per employee
Profit generated per employee:
43.2K
Each employee generates 36% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
9.5K
Each employee generates -125% less free cash flow than industry average revenue per employee
Assets/Capital per employee
831.9K
Each employee generates -125% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
AVTR
ALBEMARLE CORPORATION (XNYS:ALB)
CELANESE CORPORATION (XNYS:CE)
Suzano Inc. (XNYS:SUZ)
AGNICO EAGLE MINES LIMITED (XNYS:AEM)
Wheaton Precious Metals Corp. (XNYS:WPM)
AVTR-PA
FMC
JAMES HARDIE INDUSTRIES PUBLIC LIMITED COMPANY (XNYS:JHX)
Sociedad Quimica y Minera de Chile SA (XNYS:SQM)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
7.55B
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:
4.97B
2.58B
-
371.80M
1.57B
-
-
1.57B
-
109.90M
404.60M
1.19B
1.01B
582.90M
783.40M
92.40M
582.90M
Statement of Cash Flow
Date:
Period:
114.50M
Differed Income Tax :
- 22300.00K
Stock Based Compensation :
10.70M
Change in Working Capital :
132.20M
Accounts Receivables:
15.90M
Other Working Capital:
1.16B
Other Non-Cash Items:
- 257200.00K
Net Cash Provided by Operating Activities:
152.20M
Investments in PP&E:
-
Net Acquisitions:
- 15300.00K
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
283.60M
-
283.60M
1.35B
896.00M
81.30M
2.61B
699.90M
5.27B
5.01B
-
-
252.00M
11.23B
-
13.84B
818.20M
44.70M
-
-
584.20M
1.45B
-
7.18B
8.03B
-
9.48B
2.75B
673.40M
- 69300.0K
1.00B
March 31, 2022 at 6:00:00 AM
6.54B
4.36B
13.84B
-
44.70M
- 238900.0K
-
- 24200.00K
- 39500.00K
- 111900.00K
-
- 4900.00K
- 16100.00K
5.70M
- 127200.00K
-
- 18600.00K
308.40M
327.00M
152.20M
- 24500.00K
127.70M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
AVTR
2023
2024
2025
2026
2027
$28.52
$31.09
$33.89
$36.95
$40.28