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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Bread Financial Holdings, Inc. (XNYS:BFH) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ADS
Name:
BREAD FINANCIAL HOLDINGS, INC. (XNYS:BFH)
Sector:
477.00M
Industry:
Credit Services
CEO:
Mr. Ralph Andretta
Total Employees:
6,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -65.13% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF BREAD FINANCIAL HOLDINGS, INC.(BFH) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CREDIT SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
38.05
One Month Price Target:
$38.47
Six Month Price Target :
$40.59
Likely Price in One Year's Time:
Ticker:
$43.14
Likely Trading Range Today Under (Normal Volatility)
$37.75
Price Upper limit ($) :
$38.34
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$34.45
This week:
$30.
This month :
$21.96
Other Primary facts
Market Cap:
1.82B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
49.85M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
35.43%
-27.07%
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:
$54.76
$47.17
$21.34
$28.93
Medium risk (<10%) entry points
Buy Call
Sell Call
$44.70
Buy Put:
Sell Put:
$43.08
$31.37
$33.02
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ADS
Sharpe Ratio:
-0.42%
Comparison:
ADS, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -122.62% lower than the industry
& is -118.45% lower than the market/S&P 500 average
Average Returns/Yield of
ADS
Daily returns:
-0.01%
Weekly returns:
-0.05%
Monthly returns:
-0.21%
Yearly returns:
19.06%
Comparison of returns:
Average annual returns/yield (last 3 years) is -113.21% below industry average
Classification:
ADS, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.76
Statistical test of Returns:
ADS has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.60%
Weekly Volatility:
10.28%
Monthly Volatility:
20.57%
Yearly Volatility:
71.25%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.44%
Volatility in last five trading days has been -90.46% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-9.46%
Weekly VaR:
-21.15%
Monthly VaR:
-42.29%
How Much Can the price of
ADS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-38%
Worst case (decline):
>85%
This translates to price declining to:
$23.77
This translates to price declining to:
$5.71
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
ADS is a 198.48% riskier investment compared to the market/S&P 500 & is 155.71% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 39.38% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ADS
Beta in relation to market/S&P 500--1.99
Expected beta in 1 year's time:
1.082
Expected beta in 3 year's time:
1.53
Unlevered (debt free) Beta:
0.609
Beta in relation to Nasdaq (XNAS):
1.174
Beta in relation to all global stocks::
1.16
Beta Comparison & Analysis
Beta of competitors/peers::
1.094
Beta is 81.73% higher than peers
Average Industry Beta:
1.332
Beta is 49.30% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
39.77%
Sustainable growth rate is 17.87% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.193
Alpha is -384.19% below industry average alpha yield
Alpha is -1228% below the market average
Analysis of Cost of Capital of
ADS
Equity cost of capital:
0.168
Equity cost of capital is 36.65% above industry mean WACC
Unlevered (without debt) cost of capital:
5.13%
Before-tax cost of debt:
1.17%
After-tax cost of debt:
0.92%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.92%
WACC is 43.30% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$70.28
Revenue growth rate per share of (3Y):
0.84
Annual revenue growth rate is -128.10% below industry average
EPS:
$0.00
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$0.01
Balance sheet equity growth per share: -61.47%
Equity growth rate per share is -358.22% lower than the industry
Debt per share
$135.98
EBITDA per share
$22.94
Valuation Analysis Today of
ADS
P/E Ratio:
4.22
P/E Ratio of Competitors/Peers:
10.18
P/E ratio is -58.59% lower than main peers & is -65.26% lower than the industry
-
-
Share value as per dividend discount (DDM) model: $6.61
Present value of the expected future dividends only: $3.34
P/S (Price to Sales ratio):
0.54
Price to sales ratio is -89.58% below the industry mean
P/B (Price to book value ratio):
0.84
Price to free cash flow: 7536.40
Price to free cash flow ratio is -94.27% lower than the industry
Net income growth rate (3Y):
-4.48%
Net income growth rate is -127.72% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 1.38%
Dividend yeild: 2.21%
Previous Dividend: $0.21
Previous adjusted dividend: $0.21
Previous Dividend: $0.84
Expected next dividend best case: $0.35
Expected next dividend worst case: $0.07
Average dividend payment (long-term): $0.29
Average dividend increase/decrease (growth rate) % per period: -6.67%
-
-
-
-
-
-
Dividend History:
2022-05-12--$0.21
2021-11-10--$0.21
2021-05-13--$0.21
2022-02-10--$0.21
2021-08-12--$0.21
2021-02-11--$0.21
Dividend growth rate is -30.29% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
298.85%
Net debt to equity ratio:
169.66%
Debt to assets ratio:
32.37%
Net debt to assets ratio:
18.38%
Debt-to-asset ratio is -58.48% below industry average
Ability to repay debt:
Interest coverage ratio:
14.47
Interest coverage ratio is 47.35% more than industry average
Looking forward:
Debt growth rate:
-59.27%
Annual debt growth is -220% lower than industry average debt growth rate
Debt repayment rate in last quarter: 16.73%
Analysis of Key Statistics
Correlation of price movement with the market:
0.563
Statistical significance of correlation:
ADS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.561
Stock price is 0.38% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.561
Correlation of price movement with Nasdaq (^IXIC):
0.015
Covariance of price movement with the market:
0.041
Kurtosis
10.283
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:
0.636
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
ADS
Gross Profit Margin Ratio:
230%
Operating Profit Margin Ratio:
24.07%
Operating profit margin is -17.21% lower than the industry
Net Profit Margin Ratio:
230%
Effective Tax Rate:
24.14%
Effective tax rate is 11.49% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
31.96%
Return on equity (ROE) is -24.62% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.46%
Return on assets (ROA) is -42.87% lower than the industry
Financial Leverage:
1.5x
Current Ratio:
1.5
Current ratio is -74.06% below industry average
Cash Conversion Cycle (days):
17
Cash conversion cycle is -87.22% below industry average
The remaining useful life of property plant & equipment is: 4.5 years
Stock based compensation to net income ratio:
0.97%
In-depth Efficiency Analysis
Revenue generated per employee:
583.9K
Each employee generates -20% less revenue than industry average revenue per employee
EBITDA generated per employee:
190.6K
Each employee generates -55% less EBITDA than industry average revenue per employee
Profit generated per employee:
120.8K
Each employee generates -50% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
79.5K
Each employee generates 36% more free cash flow than industry average revenue per employee
Assets/Capital per employee
189.2K
Each employee generates 36% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
ADS
ATLAS CORP. (XNYS:ATCO)
AXOS FINANCIAL, INC. (XNYS:AX)
BANK OF HAWAII CORPORATION (XNYS:BOH)
Nuveen AMT-Free Mu Cr I (XNYS:NVG)
Nuveen Quality Muni Inc (XNYS:NAD)
MET-PF
FEDERATED HERMES, INC. (XNYS:FHI)
NELNET, INC. (XNYS:NNI)
First Bancorp (XNYS:FBP)
Current Analyst Ratings
Strong buy�25%
Buy�38%
Hold�42%
Sell�4%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
3.50B
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:
986.90M
1.58B
-
298.10M
489.10M
31.00M
654.70M
933.80M
1.07B
79.00M
110.00M
1.14B
843.30M
724.80M
951.50M
229.70M
724.80M
Statement of Cash Flow
Date:
Period:
21.00M
Differed Income Tax :
- 48000.00K
Stock Based Compensation :
7.00M
Change in Working Capital :
71.00M
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
236.00M
Net Cash Provided by Operating Activities:
497.00M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 18000.00K
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
2.93B
233.00M
3.16B
-
-
-
-
220.00M
-
-
233.00M
-
-
1.14B
22.07B
20.94B
-
-
-
-
-
-
6.78B
-
6.78B
25.45B
18.67B
1.00M
113.00M
- 9000.0K
2.16B
March 31, 2022 at 6:00:00 AM
1.92B
2.27B
20.94B
466.00M
6.78B
3.8B
12.00M
316.00M
310.00M
- 1362000.00K
-
- 12000.00K
- 10000.00K
288.00M
- 1096000.00K
-
- 289000.00K
3.63B
3.92B
497.00M
- 20000.00K
477.00M
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
ADS
2023
2024
2025
2026
2027
$43.36
$30.57
$34.65
$39.28
$44.53