RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Cowen Inc. (XNAS:COWN) InDepth Stock/Fundamental/Options Analysis Today
Primary Facts
COWN
Name:
COWEN INC. (XNAS:COWN)
Sector:
 2914.00K
Industry:
Capital Markets
CEO:
Mr. Jeffrey Solomon
Total Employees:
1,534
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is 68.49% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONGTERM ANALYSIS OF COWEN INC.(COWN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CAPITAL MARKETS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
38.4
One Month Price Target:
$38.74
Six Month Price Target :
$40.43
Likely Price in One Year's Time:
Ticker:
$42.46
Likely Trading Range Today Under (Normal Volatility)
$38.25
Price Upper limit ($) :
$38.7
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$35.73
This week:
$32.43
This month :
$26.47
Other Primary facts
Market Cap:
1.06B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
27.65M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
28.66%
22.28%
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:
$50.76
$44.97
$26.04
$31.83
Medium risk (<10%) entry points
Buy Call
Sell Call
$43.09
Buy Put:
Sell Put:
$41.85
$33.69
$34.95
These entry points can be used for other strategies, such as butterflies, straddles, etc.
RiskAdjusted returns (Sharpe Ratio) of
COWN
Sharpe Ratio:
5.32%
Comparison:
COWN, is amongst the top 20% stocks with highest riskadjusted returns
Sharpe ratio is 52.33% higher than the industry
& ratio is 133.53% higher than the market/S&P 500 average
Average Returns/Yield of
COWN
Daily returns:
0.19%
Weekly returns:
0.97%
Monthly returns:
3.88%
Yearly returns:
25.05%
Comparison of returns:
Average annual returns/yield (last 3 years) is 85.78% above industry average
Classification:
COWN, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of TTest of Returns:
0.27
Statistical test of Returns:
COWN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.48%
Weekly Volatility:
7.77%
Monthly Volatility:
15.55%
Yearly Volatility:
53.87%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.18%
Volatility in last five trading days has been 94.80% below longterm volatility
Value at Risk Analysis (VaR)
Daily VaR:
6.95%
Weekly VaR:
15.53%
Monthly VaR:
31.07%
How Much Can the price of
COWN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
25%
Worst case (decline):
>85%
This translates to price declining to:
$28.71
This translates to price declining to:
$5.76
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
COWN is a 119.28% riskier investment compared to the market/S&P 500 & is 87.85% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 26.56% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
COWN
Beta in relation to market/S&P 5001.57
Expected beta in 1 year's time:
1.018
Expected beta in 3 year's time:
1.44
Unlevered (debt free) Beta:
0.198
Beta in relation to Nasdaq (XNAS):
0.961
Beta in relation to all global stocks::
0.806
Beta Comparison & Analysis
Beta of competitors/peers::
1.141
Beta is 37.93% higher than peers
Average Industry Beta:
1.144
Beta is 37.47% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
29.30%
Sustainable growth rate is 27.67% above industry average
Alpha provided  Alpha Analysis
Alpha provided:
0.326
Alpha is 131.92% above industry average alpha yield
Alpha is 2076% higher than market/& is unsustainably high
Analysis of Cost of Capital of
COWN
Equity cost of capital:
0.139
Equity cost of capital is 26.73% above industry mean WACC
Unlevered (without debt) cost of capital:
1.75%
Beforetax cost of debt:
6.41%
Aftertax cost of debt:
5.07%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
5.07%
WACC is 34.58% above industry mean WACC
Key PerShare Metrics & Analysis
Revenue per share:
$64.22
Revenue growth rate per share of (3Y):
0.8
Annual revenue growth rate is 80.20% above the industry average
EPS:
$5.50
Expected Annual growth rate of EPS (3Y):
145.24%
Expected future EPS growth rate is 176.72% higher than the Capital Markets industry
Free cash flow (FCF) per share:



Debt per share
$0.00
EBITDA per share
$10.93
Valuation Analysis Today of
COWN
P/E Ratio:
8.38
P/E Ratio of Competitors/Peers:
143.13
P/E ratio is 94.14% lower than main peers & is 58.07% lower than the industry
Stock price/value with industry average P/E ratio: $109.97
COWN is 65.08% undervalued if valued using industry average P/E ratio


P/S (Price to Sales ratio):
0.6
Price to sales ratio is 86.05% below the industry mean
P/B (Price to book value ratio):
0.8

Price to free cash flow ratio is 94.82% lower than the industry
Net income growth rate (3Y):
635.80%
Net income growth rate is 626.07% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 2.16%
Dividend yeild: 1.15%
Previous Dividend: $0.12
Previous adjusted dividend: $0.12
Previous Dividend: $0.44
Expected next dividend best case: $0.15
Expected next dividend worst case: $0.09
Average dividend payment (longterm): $0.08
Average dividend increase/decrease (growth rate) % per period: 16.11%
Expected next dividend payment date: 13/09/2022
Expected next dividend record date: 30/08/2022

Previous dividend payment date: 15/06/2022
Previous dividend record date: 06/01/2022

Dividend History:
20220531$0.12
20211130$0.10
20210528$0.10
20220228$0.12
20210831$0.10
20210226$0.08
Dividend growth rate is 45.73% lower than the industry average
Indepth Debt & Leverage Analysis
Debt to equity ratio:
895.51%
Net debt to equity ratio:
15.97%
Debt to assets ratio:
88.63%
Net debt to assets ratio:
2.52%
Debttoasset ratio is 19.50% above industry average
Ability to repay debt:
Interest coverage ratio:
6.49
Interest coverage ratio is 87.28% less than industry average
Looking forward:
Debt growth rate:
0.00%

Debt repayment rate in last quarter: 100.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.553
Statistical significance of correlation:
COWN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.637
Stock price is 13.15% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.637
Correlation of price movement with Nasdaq (^IXIC):
0.02
Covariance of price movement with the market:
0.039
Kurtosis
13.059
Returns have severe fattails (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:
0.633
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
COWN
Gross Profit Margin Ratio:
93%
Operating Profit Margin Ratio:
12.22%
Operating profit margin is 36.90% lower than the industry
Net Profit Margin Ratio:
93%
Effective Tax Rate:
22.32%
Effective tax rate is 12.34% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
13.63%
Return on equity (ROE) is 44.08% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.15%
Return on assets (ROA) is 60.76% lower than the industry
Financial Leverage:
8.8x
Current Ratio:
2.32
Current ratio is 44.95% below industry average
Cash Conversion Cycle (days):
278
Cash conversion cycle is 1510.01% above industry average
The remaining useful life of property plant & equipment is: 1.1 years
Stock based compensation to net income ratio:

Indepth Efficiency Analysis
Revenue generated per employee:
1.2M
Each employee generates 37% less revenue than industry average revenue per employee
EBITDA generated per employee:
196.9K
Each employee generates 30% less EBITDA than industry average revenue per employee
Profit generated per employee:
118.3K
Each employee generates 31% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
 1.9K
Each employee generates 92% less free cash flow than industry average revenue per employee
Assets/Capital per employee
271.6K
Each employee generates 92% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis


Competitors/Peer firms of
COWN
VIHAU
CIPHER MINING INC. (XNAS:CIFR)
NERDWALLET, INC. (XNAS:NRDS)
OXFORD LANE CAPITAL CORP. (XNAS:OXLC)
HORIZON BANCORP, INC. (XNAS:HBNC)
PEOPLES BANCORP INC. (XNAS:PEBO)
ATLANTICUS HOLDINGS CORPORATION (XNAS:ATLC)
WISDOMTREE INVESTMENTS, INC. (XNAS:WETF)
HERITAGE FINANCIAL CORPORATION (XNAS:HFWA)
Current Analyst Ratings
Strong buy�0%
Buy�4%