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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Central Garden & Pet Company (XNAS:CENT) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CENT
Name:
CENTRAL GARDEN & PET COMPANY (XNAS:CENT)
Sector:
- 116668.00K
Industry:
Packaged Foods
CEO:
Mr. Timothy Cofer
Total Employees:
6,500
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -126.01% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CENTRAL GARDEN & PET COMPANY(CENT) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND PACKAGED FOODS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
38.5
One Month Price Target:
$38.62
Six Month Price Target :
$39.23
Likely Price in One Year's Time:
Ticker:
$39.96
Likely Trading Range Today Under (Normal Volatility)
$38.38
Price Upper limit ($) :
$38.67
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$36.79
This week:
$34.67
This month :
$30.83
Other Primary facts
Market Cap:
2.06B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
55.99M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.17%
-18.17%
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:
$46.45
$42.78
$30.55
$34.22
Medium risk (<10%) entry points
Buy Call
Sell Call
$41.59
Buy Put:
Sell Put:
$40.80
$35.40
$36.20
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CENT
Sharpe Ratio:
2.57%
Comparison:
CENT, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 96.42% higher than the industry
& ratio is 12.94% higher than the market/S&P 500 average
Average Returns/Yield of
CENT
Daily returns:
0.07%
Weekly returns:
0.33%
Monthly returns:
1.31%
Yearly returns:
8.42%
Comparison of returns:
Average annual returns/yield (last 3 years) is 86.72% above industry average
Classification:
CENT, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.73
Statistical test of Returns:
CENT has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.20%
Weekly Volatility:
4.92%
Monthly Volatility:
9.84%
Yearly Volatility:
34.09%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.03%
Volatility in last five trading days has been -7.88% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.45%
Weekly VaR:
-9.96%
Monthly VaR:
-19.92%
How Much Can the price of
CENT
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-17%
Worst case (decline):
-69.00%
This translates to price declining to:
$32.01
This translates to price declining to:
$11.93
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
CENT is a 40.59% riskier investment compared to the market/S&P 500 & is 20.44% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -3.79% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CENT
Beta in relation to market/S&P 500--0.57
Expected beta in 1 year's time:
0.469
Expected beta in 3 year's time:
0.663
Unlevered (debt free) Beta:
0.308
Beta in relation to Nasdaq (XNAS):
0.392
Beta in relation to all global stocks::
0.611
Beta Comparison & Analysis
Beta of competitors/peers::
0.86
Beta is -34.27% lower than peers
Average Industry Beta:
0.586
Beta is -3.52% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
12.79%
Sustainable growth rate is 41.26% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.087
Alpha is 592.88% above industry average alpha yield
Alpha is 554% higher than market/& is unsustainably high
Analysis of Cost of Capital of
CENT
Equity cost of capital:
0.070
Equity cost of capital is -1.97% below industry mean WACC
Unlevered (without debt) cost of capital:
3.82%
Before-tax cost of debt:
4.16%
After-tax cost of debt:
3.29%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.29%
WACC is -4.66% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$60.58
Revenue growth rate per share of (3Y):
1.75
Annual revenue growth rate is 21.20% above the industry average
EPS:
$2.75
Expected Annual growth rate of EPS (3Y):
19.76%
Expected future EPS growth rate is 9.57% higher than the Packaged Foods industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$23.53
EBITDA per share
$5.95
Valuation Analysis Today of
CENT
P/E Ratio:
13.92
P/E Ratio of Competitors/Peers:
82.09
P/E ratio is -83.05% lower than main peers & is -63.98% lower than the industry
Stock price/value with industry average P/E ratio: $106.26
CENT is -63.77% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.64
Price to sales ratio is -72.60% below the industry mean
P/B (Price to book value ratio):
1.75
-
Price to free cash flow ratio is -29.87% lower than the industry
Net income growth rate (3Y):
17.77%
Net income growth rate is 65.20% higher than the average industry 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:
107.25%
Net debt to equity ratio:
86.68%
Debt to assets ratio:
42.25%
Net debt to assets ratio:
34.14%
Debt-to-asset ratio is -21.62% below industry average
Ability to repay debt:
Interest coverage ratio:
5.88
Interest coverage ratio is -97.62% less than industry average
Looking forward:
Debt growth rate:
3938.51%
Annual debt growth is 1313% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.06%
Analysis of Key Statistics
Correlation of price movement with the market:
0.378
Statistical significance of correlation:
CENT has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.429
Stock price is -11.91% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.429
Correlation of price movement with Nasdaq (^IXIC):
-0.061
Covariance of price movement with the market:
-0.079
Kurtosis
8.67
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:
-0.398
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
CENT
Gross Profit Margin Ratio:
120%
Operating Profit Margin Ratio:
7.54%
Operating profit margin is 56.30% higher than the industry
Net Profit Margin Ratio:
120%
Effective Tax Rate:
21.93%
Effective tax rate is -46.20% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
12.37%
Return on equity (ROE) is 11.96% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.87%
Return on assets (ROA) is 9.09% higher than the industry
Financial Leverage:
1.7x
Current Ratio:
2.98
Current ratio is 8.77% above industry average
Cash Conversion Cycle (days):
31.6
Cash conversion cycle is -35.71% below industry average
The remaining useful life of property plant & equipment is: 16.5 years
Stock based compensation to net income ratio:
3.41%
In-depth Efficiency Analysis
Revenue generated per employee:
521.8K
Each employee generates -34% less revenue than industry average revenue per employee
EBITDA generated per employee:
51.2K
Each employee generates -55% less EBITDA than industry average revenue per employee
Profit generated per employee:
23.4K
Each employee generates -55% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 17.9K
Each employee generates 382% more free cash flow than industry average revenue per employee
Assets/Capital per employee
244.1K
Each employee generates 382% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CENT
CENTRAL GARDEN & PET COMPANY (XNAS:CENTA)
Sprouts Farmers Market, Inc. (XNAS:SFM)
J & J SNACK FOODS CORP. (XNAS:JJSF)
2U, INC. (XNAS:TWOU)
LAUREATE EDUCATION, INC. (XNAS:LAUR)
PRICESMART, INC. (XNAS:PSMT)
COCA-COLA CONSOLIDATED, INC. (XNAS:COKE)
CELSIUS HOLDINGS, INC. (XNAS:CELH)
INTER PARFUMS, INC. (XNAS:IPAR)
Current Analyst Ratings
Strong buy�4%
Buy�4%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
3.39B
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:
2.37B
1.02B
-
-
762.16M
-
-
762.16M
241.00K
56.61M
81.41M
332.90M
255.91M
151.90M
195.99M
42.98M
151.90M
Statement of Cash Flow
Date:
Period:
20.20M
Differed Income Tax :
2.74M
Stock Based Compensation :
5.19M
Change in Working Capital :
- 141924.00K
Accounts Receivables:
41.51M
Other Working Capital:
-
Other Non-Cash Items:
12.33M
Net Cash Provided by Operating Activities:
- 92458.00K
Investments in PP&E:
- 24210.00K
Net Acquisitions:
-
Purchases of Investments:
- 1918.00K
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):
12/25/21
2022
Q1
296.04M
-
296.04M
343.66M
844.90M
47.13M
1.53B
509.84M
369.39M
130.20M
-
-
576.90M
1.59B
-
3.12B
244.83M
43.46M
-
-
225.06M
513.35M
1.32B
-
1.38B
-
1.89B
551.00K
650.03M
- 1273.0K
578.93M
December 25, 2021 at 12:00:00 AM
3.14B
1.23B
3.12B
-
1.36B
1.1B
-
-
- 26128.00K
- 767.00K
-
- 7775.00K
-
- 3048.00K
- 11590.00K
- 395.00K
- 130571.00K
308.95M
439.52M
- 92458.00K
- 24210.00K
- 116668.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
CENT
2023
2024
2025
2026
2027
$40.16
$41.69
$43.27
$44.91
$46.62