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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Covetrus, Inc. (XNAS:CVET) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CVET
Name:
COVETRUS, INC. (XNAS:CVET)
Sector:
- 44000.00K
Industry:
Health Information Services
CEO:
Mr. Benjamin Wolin
Total Employees:
4,035
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 1074.02% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF COVETRUS, INC.(CVET) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND HEALTH INFORMATION SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
20.8
One Month Price Target:
$20.99
Six Month Price Target :
$21.94
Likely Price in One Year's Time:
Ticker:
$23.08
Likely Trading Range Today Under (Normal Volatility)
$20.69
Price Upper limit ($) :
$20.97
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$19.12
This week:
$17.04
This month :
$13.28
Other Primary facts
Market Cap:
2.91B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
139.97M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
32.5%
-20.51%
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:
$28.60
$24.99
$13.00
$16.61
Medium risk (<10%) entry points
Buy Call
Sell Call
$23.81
Buy Put:
Sell Put:
$23.04
$17.78
$18.56
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CVET
Sharpe Ratio:
3.34%
Comparison:
CVET, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 225.19% higher than the industry
& ratio is 46.54% higher than the market/S&P 500 average
Average Returns/Yield of
CVET
Daily returns:
0.14%
Weekly returns:
0.71%
Monthly returns:
2.85%
Yearly returns:
5.07%
Comparison of returns:
Average annual returns/yield (last 3 years) is 574.68% above industry average
Classification:
CVET, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.92
Statistical test of Returns:
CVET has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.01%
Weekly Volatility:
8.96%
Monthly Volatility:
17.91%
Yearly Volatility:
62.05%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.14%
Volatility in last five trading days has been -96.55% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-8.08%
Weekly VaR:
-18.08%
Monthly VaR:
-36.15%
How Much Can the price of
CVET
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-30%
Worst case (decline):
>85%
This translates to price declining to:
$14.49
This translates to price declining to:
$3.12
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
CVET is a 155.16% riskier investment compared to the market/S&P 500 & is 118.59% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 17.77% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CVET
Beta in relation to market/S&P 500--1.63
Expected beta in 1 year's time:
0.875
Expected beta in 3 year's time:
1.237
Unlevered (debt free) Beta:
0.996
Beta in relation to Nasdaq (XNAS):
1.102
Beta in relation to all global stocks::
1.066
Beta Comparison & Analysis
Beta of competitors/peers::
0.81
Beta is 101.06% higher than peers
Average Industry Beta:
0.87
Beta is 87.28% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.199
Alpha is -593.68% below industry average alpha yield
Alpha is 1268% higher than market/& is unsustainably high
Analysis of Cost of Capital of
CVET
Equity cost of capital:
0.143
Equity cost of capital is 57.10% above industry mean WACC
Unlevered (without debt) cost of capital:
8.75%
Before-tax cost of debt:
2.87%
After-tax cost of debt:
2.26%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.26%
WACC is 32.73% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$33.01
Revenue growth rate per share of (3Y):
1.88
Annual revenue growth rate is -100.49% below industry average
EPS:
-$0.29
Expected Annual growth rate of EPS (3Y):
-65.50%
Expected future EPS growth rate is -237.91% lower than the Health Information Services industry
Free cash flow (FCF) per share:
$0.50
-
-
Debt per share
$7.11
EBITDA per share
$1.36
Valuation Analysis Today of
CVET
P/E Ratio:
890.26
P/E Ratio of Competitors/Peers:
82.9
P/E ratio is 973.88% higher than main peers & is 143.60% higher than the industry
-
CVET is -119.63% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.63
Price to sales ratio is -91.69% below the industry mean
P/B (Price to book value ratio):
1.88
Price to free cash flow: 41.20
-
Net income growth rate (3Y):
-143.45%
Net income growth rate is -108.19% 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:
65.12%
Net debt to equity ratio:
60.86%
Debt to assets ratio:
28.67%
Net debt to assets ratio:
26.80%
Debt-to-asset ratio is -16.06% below industry average
Ability to repay debt:
Interest coverage ratio:
6.37
Interest coverage ratio is -57.73% less than industry average
Looking forward:
Debt growth rate:
-2.15%
Annual debt growth is -105% lower than industry average debt growth rate
Debt repayment rate in last quarter: 10.12%
Analysis of Key Statistics
Correlation of price movement with the market:
0.515
Statistical significance of correlation:
CVET has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.376
Stock price is 36.85% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.376
Correlation of price movement with Nasdaq (^IXIC):
-0.055
Covariance of price movement with the market:
-0.128
Kurtosis
8.921
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:
0.452
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
CVET
Gross Profit Margin Ratio:
76%
Operating Profit Margin Ratio:
-0.30%
Operating profit margin is -98.30% lower than the industry
Net Profit Margin Ratio:
76%
Effective Tax Rate:
2.44%
Effective tax rate is -87.69% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-2.62%
Return on equity (ROE) is -19.70% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-1.15%
Return on assets (ROA) is -33.60% lower than the industry
Financial Leverage:
1.4x
Current Ratio:
1.86
Current ratio is -66.98% below industry average
Cash Conversion Cycle (days):
15
Cash conversion cycle is -69.51% below industry average
The remaining useful life of property plant & equipment is: 1.4 years
Stock based compensation to net income ratio:
-32.50%
In-depth Efficiency Analysis
Revenue generated per employee:
1.1M
Each employee generates 175% more revenue than industry average revenue per employee
EBITDA generated per employee:
47.3K
Each employee generates -215% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 9.9K
Each employee generates -87% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 10.9K
Each employee generates -186% less free cash flow than industry average revenue per employee
Assets/Capital per employee
508.8K
Each employee generates -186% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CVET
LIVANOVA PLC (XNAS:LIVN)
CAREDX, INC. (XNAS:CDNA)
HUTCHMED (CHINA) LIMITED (XNAS:HCM)
ARENA PHARMACEUTICALS, INC. (XNAS:ARNA)
ALLOGENE THERAPEUTICS, INC. (XNAS:ALLO)
InnovAge Holding Corp. (XNAS:INNV)
AGIOS PHARMACEUTICALS, INC. (XNAS:AGIO)
I-MAB (XNAS:IMAB)
PREMIER, INC. (XNAS:PINC)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
4.62B
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:
3.75B
873.00M
-
-
887.00M
-
-
887.00M
-
30.00M
202.00M
191.00M
- 14000.00K
- 40000.00K
- 41000.00K
- 1000.00K
- 40000.00K
Statement of Cash Flow
Date:
Period:
48.00M
Differed Income Tax :
1.00M
Stock Based Compensation :
13.00M
Change in Working Capital :
- 94000.00K
Accounts Receivables:
- 57000.00K
Other Working Capital:
- 43000.00K
Other Non-Cash Items:
1.00M
Net Cash Provided by Operating Activities:
- 33000.00K
Investments in PP&E:
- 11000.00K
Net Acquisitions:
- 18000.00K
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):
3/31/22
2022
Q1
117.00M
-
117.00M
627.00M
630.00M
43.00M
1.42B
285.00M
1.27B
414.00M
48.00M
-
39.00M
2.05B
-
3.47B
507.00M
52.00M
19.00M
-
203.00M
762.00M
995.00M
151.00M
1.16B
-
1.92B
1.00M
- 1083000.00K
- 81000.0K
-
March 31, 2022 at 6:00:00 AM
4.64B
1.53B
3.45B
-
1.05B
930.0M
-
-
- 29000.00K
- 112000.00K
-
-
-
107.00M
- 5000.00K
1.00M
- 66000.00K
117.00M
183.00M
- 33000.00K
- 11000.00K
- 44000.00K
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
CVET
2023
2024
2025
2026
2027
$23.15
$25.69
$28.50
$31.62
$35.08