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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Axalta Coating Systems Ltd. (XNYS:AXTA) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
AXTA
Name:
AXALTA COATING SYSTEMS LTD. (XNYS:AXTA)
Sector:
- 86400.00K
Industry:
Specialty Chemicals
CEO:
Mr. Robert Bryant
Total Employees:
12,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -183.92% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF AXALTA COATING SYSTEMS LTD.(AXTA) 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 ($) :
24.85
One Month Price Target:
$25.03
Six Month Price Target :
$25.95
Likely Price in One Year's Time:
Ticker:
$27.06
Likely Trading Range Today Under (Normal Volatility)
$24.74
Price Upper limit ($) :
$24.96
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$23.55
This week:
$21.94
This month :
$19.04
Other Primary facts
Market Cap:
5.43B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
220.55M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.42%
-21.14%
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:
$30.88
$28.14
$18.82
$21.56
Medium risk (<10%) entry points
Buy Call
Sell Call
$27.24
Buy Put:
Sell Put:
$26.66
$22.45
$23.04
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
AXTA
Sharpe Ratio:
-0.09%
Comparison:
AXTA, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -104.27% lower than the industry
& is -103.97% lower than the market/S&P 500 average
Average Returns/Yield of
AXTA
Daily returns:
0.01%
Weekly returns:
0.03%
Monthly returns:
0.13%
Yearly returns:
24.57%
Comparison of returns:
Average annual returns/yield (last 3 years) is -93.61% below industry average
Classification:
AXTA, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.49
Statistical test of Returns:
AXTA has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.55%
Weekly Volatility:
5.70%
Monthly Volatility:
11.40%
Yearly Volatility:
39.49%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.87%
Volatility in last five trading days has been -26.84% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.23%
Weekly VaR:
-11.69%
Monthly VaR:
-23.39%
How Much Can the price of
AXTA
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-81.01%
This translates to price declining to:
$19.73
This translates to price declining to:
$4.72
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
AXTA is a 65.06% riskier investment compared to the market/S&P 500 & is 41.40% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -24.15% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
AXTA
Beta in relation to market/S&P 500--1.32
Expected beta in 1 year's time:
0.971
Expected beta in 3 year's time:
1.374
Unlevered (debt free) Beta:
0.425
Beta in relation to Nasdaq (XNAS):
0.812
Beta in relation to all global stocks::
0.773
Beta Comparison & Analysis
Beta of competitors/peers::
1.207
Beta is 9.62% higher than peers
Average Industry Beta:
1.164
Beta is 13.59% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
18.26%
Sustainable growth rate is -36.80% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.106
Alpha is -179.15% below industry average alpha yield
Alpha is -677% below the market average
Analysis of Cost of Capital of
AXTA
Equity cost of capital:
0.122
Equity cost of capital is 9.74% above industry mean WACC
Unlevered (without debt) cost of capital:
3.92%
Before-tax cost of debt:
3.49%
After-tax cost of debt:
2.76%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.76%
WACC is -14.77% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$20.52
Revenue growth rate per share of (3Y):
3.86
Annual revenue growth rate is -362.05% below industry average
EPS:
$1.26
Expected Annual growth rate of EPS (3Y):
2.45%
Expected future EPS growth rate is 170.79% higher than the Specialty Chemicals industry
Free cash flow (FCF) per share:
$1.51
-
-
Debt per share
$16.95
EBITDA per share
$3.74
Valuation Analysis Today of
AXTA
P/E Ratio:
27.14
P/E Ratio of Competitors/Peers:
26.97
P/E ratio is 0.63% higher than main peers & is -27.55% lower than the industry
Stock price/value with industry average P/E ratio: $47.20
AXTA is -47.35% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.21
Price to sales ratio is -56.12% below the industry mean
P/B (Price to book value ratio):
3.86
Price to free cash flow: 16.51
-
Net income growth rate (3Y):
29.49%
Net income growth rate is -153.33% 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:
271.86%
Net debt to equity ratio:
235.50%
Debt to assets ratio:
52.80%
Net debt to assets ratio:
45.74%
Debt-to-asset ratio is -2.40% below industry average
Ability to repay debt:
Interest coverage ratio:
6.19
Interest coverage ratio is -70.58% less than industry average
Looking forward:
Debt growth rate:
-1.65%
Annual debt growth is -100% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.82%
Analysis of Key Statistics
Correlation of price movement with the market:
0.69
Statistical significance of correlation:
AXTA has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.58
Stock price is 19.06% 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):
0.025
Covariance of price movement with the market:
0.038
Kurtosis
11.089
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:
-0.594
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
AXTA
Gross Profit Margin Ratio:
123%
Operating Profit Margin Ratio:
10.96%
Operating profit margin is -103.89% lower than the industry
Net Profit Margin Ratio:
123%
Effective Tax Rate:
22.34%
Effective tax rate is 24.40% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
21.10%
Return on equity (ROE) is -26.60% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.10%
Return on assets (ROA) is 56.05% higher than the industry
Financial Leverage:
2.1x
Current Ratio:
1.87
Current ratio is -30.21% below industry average
Cash Conversion Cycle (days):
17.3
Cash conversion cycle is -71.91% below industry average
The remaining useful life of property plant & equipment is: 26.6 years
Stock based compensation to net income ratio:
1.83%
In-depth Efficiency Analysis
Revenue generated per employee:
377.2K
Each employee generates -50% less revenue than industry average revenue per employee
EBITDA generated per employee:
68.7K
Each employee generates -31% less EBITDA than industry average revenue per employee
Profit generated per employee:
24.2K
Each employee generates -24% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 7.2K
Each employee generates -81% less free cash flow than industry average revenue per employee
Assets/Capital per employee
380.4K
Each employee generates -81% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 13.04%
Growth rate in R&D investment/expenditure is 24.76% higher than the industry
Competitors/Peer firms of
AXTA
Braskem SA (XNYS:BAK)
HUNTSMAN CORPORATION (XNYS:HUN)
ANGLOGOLD ASHANTI LTD (XNYS:AU)
KINROSS GOLD CORPORATION (XNYS:KGC)
MP Materials Corp (XNYS:MP)
EAGLE MATERIALS INC. (XNYS:EXP)
Gerdau SA (XNYS:GGB)
MDU RESOURCES GROUP, INC. (XNYS:MDU)
Olin Corporation (XNYS:OLN)
Current Analyst Ratings
Strong buy�8%
Buy�38%
Hold�29%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
4.53B
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:
3.14B
1.39B
63.20M
-
753.10M
-
74.10M
890.40M
-
133.30M
317.80M
824.60M
496.10M
290.20M
372.90M
83.30M
290.20M
Statement of Cash Flow
Date:
Period:
77.70M
Differed Income Tax :
- 2700.00K
Stock Based Compensation :
5.30M
Change in Working Capital :
- 162100.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
- 3000.00K
Net Cash Provided by Operating Activities:
- 43900.00K
Investments in PP&E:
- 42500.00K
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
576.20M
-
576.20M
1.03B
764.00M
146.30M
2.52B
1.18B
1.57B
1.24B
-
-
568.90M
4.57B
-
7.08B
748.00M
76.10M
-
-
520.90M
1.35B
3.74B
410.60M
4.32B
-
5.66B
252.20M
868.70M
- 401400.0K
-
March 31, 2022 at 6:00:00 AM
4.03B
1.38B
7.04B
-
3.82B
3.2B
25.00M
7.20M
- 10300.00K
- 30900.00K
-
- 175100.00K
-
- 2100.00K
- 208100.00K
- 2100.00K
- 264400.00K
586.80M
851.20M
- 43900.00K
- 42500.00K
- 86400.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
AXTA
2023
2024
2025
2026
2027
$34.37
$37.43
$40.76
$44.38
$48.32