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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Beacon Roofing Supply, Inc. (XNAS:BECN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
BECN
Name:
BEACON ROOFING SUPPLY, INC. (XNAS:BECN)
Sector:
11.50M
Industry:
Building Products & Equipment
CEO:
Mr. Julian Francis
Total Employees:
6,676
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -33.65% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF BEACON ROOFING SUPPLY, INC.(BECN) 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 ($) :
53.36
One Month Price Target:
$53.9
Six Month Price Target :
$56.57
Likely Price in One Year's Time:
Ticker:
$59.78
Likely Trading Range Today Under (Normal Volatility)
$53.11
Price Upper limit ($) :
$53.76
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$49.51
This week:
$44.75
This month :
$36.15
Other Primary facts
Market Cap:
3.42B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
65.00M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
29.05%
-21.31%
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:
$71.20
$62.91
$35.52
$43.81
Medium risk (<10%) entry points
Buy Call
Sell Call
$60.21
Buy Put:
Sell Put:
$58.44
$46.48
$48.28
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
BECN
Sharpe Ratio:
3.89%
Comparison:
BECN, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 56.22% higher than the industry
& ratio is 70.81% higher than the market/S&P 500 average
Average Returns/Yield of
BECN
Daily returns:
0.15%
Weekly returns:
0.74%
Monthly returns:
2.97%
Yearly returns:
21.19%
Comparison of returns:
Average annual returns/yield (last 3 years) is 68.09% above industry average
Classification:
BECN, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.35
Statistical test of Returns:
BECN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.58%
Weekly Volatility:
8.01%
Monthly Volatility:
16.03%
Yearly Volatility:
55.52%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.26%
Volatility in last five trading days has been -92.79% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.21%
Weekly VaR:
-16.13%
Monthly VaR:
-32.25%
How Much Can the price of
BECN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-27%
Worst case (decline):
>85%
This translates to price declining to:
$39.05
This translates to price declining to:
$8.00
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
BECN is a 127.65% riskier investment compared to the market/S&P 500 & is 95.03% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 16.06% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
BECN
Beta in relation to market/S&P 500--1.79
Expected beta in 1 year's time:
0.969
Expected beta in 3 year's time:
1.371
Unlevered (debt free) Beta:
1.066
Beta in relation to Nasdaq (XNAS):
0.975
Beta in relation to all global stocks::
1.263
Beta Comparison & Analysis
Beta of competitors/peers::
1.268
Beta is 41.27% higher than peers
Average Industry Beta:
1.393
Beta is 28.61% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.202
Alpha is 137.66% above industry average alpha yield
Alpha is 1286% higher than market/& is unsustainably high
Analysis of Cost of Capital of
BECN
Equity cost of capital:
0.154
Equity cost of capital is 21.50% above industry mean WACC
Unlevered (without debt) cost of capital:
9.18%
Before-tax cost of debt:
3.58%
After-tax cost of debt:
2.83%
Overall debt rating:
Upper medium A grade (third highest grade),CO8<=0.0429,"Medium BBB grade (Fourth highest grade)
Weighted average cost of capital (WACC):
2.83%
WACC is 5.85% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$110.60
Revenue growth rate per share of (3Y):
1.62
Annual revenue growth rate is -97.20% below industry average
EPS:
$3.86
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$0.11
Balance sheet equity growth per share: 80.45%
Equity growth rate per share is 61.94% higher than the industry
Debt per share
$29.98
EBITDA per share
$9.86
Valuation Analysis Today of
BECN
P/E Ratio:
9.88
P/E Ratio of Competitors/Peers:
77.12
P/E ratio is -87.18% lower than main peers & is -63.01% lower than the industry
Stock price/value with industry average P/E ratio: $103.15
BECN is -48.27% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.48
Price to sales ratio is -83.03% below the industry mean
P/B (Price to book value ratio):
1.62
Price to free cash flow: 466.64
Price to free cash flow ratio is 381.79% higher than the industry
Net income growth rate (3Y):
-145.02%
Net income growth rate is -270.74% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 7.87%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
90.98%
Net debt to equity ratio:
83.67%
Debt to assets ratio:
35.08%
Net debt to assets ratio:
32.27%
Debt-to-asset ratio is -26.08% below industry average
Ability to repay debt:
Interest coverage ratio:
8.72
Interest coverage ratio is -97.92% less than industry average
Looking forward:
Debt growth rate:
-28.20%
Annual debt growth is -570% lower than industry average debt growth rate
Debt repayment rate in previous year: 58.65%
Analysis of Key Statistics
Correlation of price movement with the market:
0.607
Statistical significance of correlation:
BECN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.604
Stock price is 0.40% 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
Covariance of price movement with the market:
-0.001
Kurtosis
12.633
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:
0.395
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
BECN
Gross Profit Margin Ratio:
107%
Operating Profit Margin Ratio:
7.77%
Operating profit margin is -122.22% lower than the industry
Net Profit Margin Ratio:
107%
Effective Tax Rate:
25.27%
Effective tax rate is 15.36% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
14.24%
Return on equity (ROE) is -35.92% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.49%
Return on assets (ROA) is -48.28% lower than the industry
Financial Leverage:
1.5x
Current Ratio:
1.82
Current ratio is -38.35% below industry average
Cash Conversion Cycle (days):
13
Cash conversion cycle is -60.49% below industry average
The remaining useful life of property plant & equipment is: 12.0 years
Stock based compensation to net income ratio:
7.41%
In-depth Efficiency Analysis
Revenue generated per employee:
1.1M
Each employee generates 82% more revenue than industry average revenue per employee
EBITDA generated per employee:
96.0K
Each employee generates -25% less EBITDA than industry average revenue per employee
Profit generated per employee:
45.7K
Each employee generates -42% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
1.7K
Each employee generates -81% less free cash flow than industry average revenue per employee
Assets/Capital per employee
432.3K
Each employee generates -81% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
BECN
UPWORK INC. (XNAS:UPWK)
AAON, INC. (XNAS:AAON)
CASELLA WASTE SYSTEMS, INC. (XNAS:CWST)
FRANKLIN ELECTRIC CO., INC. (XNAS:FELE)
ADVANCED ENERGY INDUSTRIES, INC. (XNAS:AEIS)
ALTRA INDUSTRIAL MOTION CORP. (XNAS:AIMC)
ALLEGIANT TRAVEL COMPANY (XNAS:ALGT)
MERCURY SYSTEMS, INC. (XNAS:MRCY)
HELIOS TECHNOLOGIES, INC. (XNYS:HLIO)
Current Analyst Ratings
Strong buy�25%
Buy�25%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
7.19B
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:
5.26B
1.93B
-
-
1.21B
-
158.20M
1.37B
-
73.50M
158.10M
640.90M
558.90M
305.10M
412.40M
104.20M
305.10M
Statement of Cash Flow
Date:
Period:
175.20M
Differed Income Tax :
- 139200.00K
Stock Based Compensation :
22.60M
Change in Working Capital :
- 360800.00K
Accounts Receivables:
- 81300.00K
Other Working Capital:
- 8100.00K
Other Non-Cash Items:
425.70M
Net Cash Provided by Operating Activities:
78.00M
Investments in PP&E:
- 66500.00K
Net Acquisitions:
836.00M
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):
9/30/21
2021
FY
260.00M
-
260.00M
978.30M
1.08B
345.90M
2.67B
635.80M
1.76B
414.80M
-
64.50M
9.80M
2.89B
-
5.55B
812.90M
103.50M
-
-
546.70M
1.46B
1.95B
-
1.95B
-
3.41B
700.00K
620.50M
- 23400.0K
1.15B
September 30, 2021 at 6:00:00 AM
6.63B
2.14B
5.55B
-
2.05B
1.8B
-
4.40M
773.90M
- 2764100.00K
-
-
- 24000.00K
1.57B
- 1216000.00K
- 500.00K
- 364600.00K
260.00M
624.60M
78.00M
- 66500.00K
11.50M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
BECN
2023
2024
2025
2026
2027
$60.08
$135.93
$152.29
$170.62
$191.15