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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Construction Partners, Inc. (XNAS:ROAD) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ROAD
Name:
CONSTRUCTION PARTNERS, INC. (XNAS:ROAD)
Sector:
- 15683.00K
Industry:
Engineering & Construction
CEO:
Mr. Charles Owens
Total Employees:
805
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 18.17% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CONSTRUCTION PARTNERS, INC.(ROAD) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ENGINEERING & CONSTRUCTION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
29.15
One Month Price Target:
$29.29
Six Month Price Target :
$30.01
Likely Price in One Year's Time:
Ticker:
$30.88
Likely Trading Range Today Under (Normal Volatility)
$29.02
Price Upper limit ($) :
$29.36
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$27.17
This week:
$24.72
This month :
$20.3
Other Primary facts
Market Cap:
1.55B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
52.55M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.8%
-15.87%
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:
$38.33
$34.07
$19.97
$24.23
Medium risk (<10%) entry points
Buy Call
Sell Call
$32.68
Buy Put:
Sell Put:
$31.77
$25.61
$26.53
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ROAD
Sharpe Ratio:
3.72%
Comparison:
ROAD, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is -6.40% lower than the industry
& ratio is 63.12% higher than the market/S&P 500 average
Average Returns/Yield of
ROAD
Daily returns:
0.13%
Weekly returns:
0.67%
Monthly returns:
2.68%
Yearly returns:
37.49%
Comparison of returns:
Average annual returns/yield (last 3 years) is -14.07% below industry average
Classification:
ROAD, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.59
Statistical test of Returns:
ROAD has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.37%
Weekly Volatility:
7.54%
Monthly Volatility:
15.08%
Yearly Volatility:
52.24%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.18%
Volatility in last five trading days has been -65.10% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.79%
Weekly VaR:
-15.19%
Monthly VaR:
-30.37%
How Much Can the price of
ROAD
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$21.77
This translates to price declining to:
$4.37
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
ROAD is a 114.36% riskier investment compared to the market/S&P 500 & is 83.64% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -0.96% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ROAD
Beta in relation to market/S&P 500--0.88
Expected beta in 1 year's time:
0.624
Expected beta in 3 year's time:
0.883
Unlevered (debt free) Beta:
0.601
Beta in relation to Nasdaq (XNAS):
0.608
Beta in relation to all global stocks::
0.785
Beta Comparison & Analysis
Beta of competitors/peers::
1.351
Beta is -34.76% lower than peers
Average Industry Beta:
1.325
Beta is -33.50% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
4.41%
Sustainable growth rate is -68.07% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.230
Alpha is -8.84% below industry average alpha yield
Alpha is 1466% higher than market/& is unsustainably high
Analysis of Cost of Capital of
ROAD
Equity cost of capital:
0.092
Equity cost of capital is -24.87% below industry mean WACC
Unlevered (without debt) cost of capital:
6.27%
Before-tax cost of debt:
1.28%
After-tax cost of debt:
1.01%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.01%
WACC is -25.07% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$20.34
Revenue growth rate per share of (3Y):
3.67
Annual revenue growth rate is -64.08% below industry average
EPS:
$0.25
Expected Annual growth rate of EPS (3Y):
-26.76%
Expected future EPS growth rate is -308.51% lower than the Engineering & Construction industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$5.39
EBITDA per share
$1.57
Valuation Analysis Today of
ROAD
P/E Ratio:
99.76
P/E Ratio of Competitors/Peers:
473.52
P/E ratio is -78.93% lower than main peers & is 243.98% higher than the industry
Stock price/value with industry average P/E ratio: $7.25
ROAD is 302.06% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.43
Price to sales ratio is -76.77% below the industry mean
P/B (Price to book value ratio):
3.67
-
-
Net income growth rate (3Y):
-64.91%
Net income growth rate is 800.28% 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:
67.82%
Net debt to equity ratio:
62.15%
Debt to assets ratio:
32.43%
Net debt to assets ratio:
29.72%
Debt-to-asset ratio is -38.99% below industry average
Ability to repay debt:
Interest coverage ratio:
21.98
Interest coverage ratio is -9.68% less than industry average
Looking forward:
Debt growth rate:
142.11%
Annual debt growth is -11% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.88%
Analysis of Key Statistics
Correlation of price movement with the market:
0.406
Statistical significance of correlation:
ROAD has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.523
Stock price is -22.43% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.523
Correlation of price movement with Nasdaq (^IXIC):
-0.031
Covariance of price movement with the market:
-0.06
Kurtosis
6.156
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:
0.343
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
ROAD
Gross Profit Margin Ratio:
43%
Operating Profit Margin Ratio:
2.12%
Operating profit margin is -115.38% lower than the industry
Net Profit Margin Ratio:
43%
Effective Tax Rate:
31.37%
Effective tax rate is 51.53% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
3.20%
Return on equity (ROE) is -72.79% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.53%
Return on assets (ROA) is -62.87% lower than the industry
Financial Leverage:
1.5x
Current Ratio:
2.09
Current ratio is -25.64% below industry average
Cash Conversion Cycle (days):
41
Cash conversion cycle is -13.20% below industry average
The remaining useful life of property plant & equipment is: 11.0 years
Stock based compensation to net income ratio:
11.28%
In-depth Efficiency Analysis
Revenue generated per employee:
1.3M
Each employee generates 120% more revenue than industry average revenue per employee
EBITDA generated per employee:
102.7K
Each employee generates 174% more EBITDA than industry average revenue per employee
Profit generated per employee:
16.6K
Each employee generates -2638% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 19.5K
Each employee generates 203% more free cash flow than industry average revenue per employee
Assets/Capital per employee
713.1K
Each employee generates 203% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
ROAD
VIEW, INC (XNAS:VIEW)
AIR TRANSPORT SERVICES GROUP, INC. (XNAS:ATSG)
ASTEC INDUSTRIES, INC. (XNAS:ASTE)
FORTERRA, INC. (XNAS:FRTA)
HEARTLAND EXPRESS, INC. (XNAS:HTLD)
Raven Property Group Limited (MISX:RAVN)
ENCORE WIRE CORPORATION (XNAS:WIRE)
COLUMBUS MCKINNON CORPORATION (XNAS:CMCO)
MARTEN TRANSPORT, LTD. (XNAS:MRTN)
Current Analyst Ratings
Strong buy�17%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.07B
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:
952.32M
116.73M
-
97.27M
97.27M
-
-
97.27M
-
3.76M
59.47M
82.66M
22.62M
13.33M
19.43M
6.10M
13.33M
Statement of Cash Flow
Date:
Period:
15.90M
Differed Income Tax :
- 295.00K
Stock Based Compensation :
1.50M
Change in Working Capital :
- 22826.00K
Accounts Receivables:
776.00K
Other Working Capital:
4.62M
Other Non-Cash Items:
- 374.00K
Net Cash Provided by Operating Activities:
- 577.00K
Investments in PP&E:
- 15106.00K
Net Acquisitions:
- 65901.00K
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):
12/31/21
2022
Q1
35.57M
-
35.57M
186.42M
57.71M
18.83M
298.52M
439.97M
120.99M
4.08M
108.00K
-
8.93M
574.06M
-
872.58M
78.72M
11.91M
-
38.75M
13.31M
142.70M
283.02M
11.98M
312.57M
-
455.26M
56.00K
181.41M
1.4M
234.43M
December 31, 2021 at 12:00:00 AM
1.05B
417.32M
872.58M
-
294.93M
259.4M
-
733.00K
- 80274.00K
- 2500.00K
-
- 39.00K
-
70.00M
67.46M
-
- 13390.00K
43.86M
57.25M
- 577.00K
- 15106.00K
- 15683.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
ROAD
2023
2024
2025
2026
2027
$31.03
$48.24
$51.09
$54.12
$57.33