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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
El Pollo Loco Holdings, Inc (XNAS:LOCO) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
LOCO
Name:
EL POLLO LOCO HOLDINGS, INC (XNAS:LOCO)
Sector:
- 6077.00K
Industry:
Restaurants
CEO:
Mr. Bernard Acoca
Total Employees:
4,626
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -2212.95% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF EL POLLO LOCO HOLDINGS, INC(LOCO) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RESTAURANTS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
8.9
One Month Price Target:
$8.96
Six Month Price Target :
$9.28
Likely Price in One Year's Time:
Ticker:
$9.65
Likely Trading Range Today Under (Normal Volatility)
$8.85
Price Upper limit ($) :
$8.94
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$8.34
This week:
$7.66
This month :
$6.41
Other Primary facts
Market Cap:
306.75M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
37.00M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
22.34%
-19.77%
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:
$11.49
$10.32
$6.31
$7.48
Medium risk (<10%) entry points
Buy Call
Sell Call
$9.94
Buy Put:
Sell Put:
$9.69
$7.86
$8.11
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
LOCO
Sharpe Ratio:
-1.42%
Comparison:
LOCO, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -186.26% lower than the industry
& is -162.37% lower than the market/S&P 500 average
Average Returns/Yield of
LOCO
Daily returns:
-0.03%
Weekly returns:
-0.17%
Monthly returns:
-0.68%
Yearly returns:
16.01%
Comparison of returns:
Average annual returns/yield (last 3 years) is -151.28% below industry average
Classification:
LOCO, 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:
LOCO has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.03%
Weekly Volatility:
6.77%
Monthly Volatility:
13.55%
Yearly Volatility:
46.93%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.47%
Volatility in last five trading days has been -51.37% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.26%
Weekly VaR:
-13.99%
Monthly VaR:
-27.98%
How Much Can the price of
LOCO
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$6.66
This translates to price declining to:
$1.34
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
LOCO is a 97.46% riskier investment compared to the market/S&P 500 & is 69.16% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -13.26% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
LOCO
Beta in relation to market/S&P 500--1.26
Expected beta in 1 year's time:
0.776
Expected beta in 3 year's time:
1.097
Unlevered (debt free) Beta:
0.844
Beta in relation to Nasdaq (XNAS):
0.434
Beta in relation to all global stocks::
0.511
Beta Comparison & Analysis
Beta of competitors/peers::
1.596
Beta is -20.97% lower than peers
Average Industry Beta:
1.354
Beta is -6.86% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
9.82%
Sustainable growth rate is -67.67% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.200
Alpha is -656.89% below industry average alpha yield
Alpha is -1273% below the market average
Analysis of Cost of Capital of
LOCO
Equity cost of capital:
0.118
Equity cost of capital is -5.12% below industry mean WACC
Unlevered (without debt) cost of capital:
7.89%
Before-tax cost of debt:
0.38%
After-tax cost of debt:
0.30%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.30%
WACC is 82.91% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$5.92
Revenue growth rate per share of (3Y):
1.04
Annual revenue growth rate is -41.19% below industry average
EPS:
$0.75
Expected Annual growth rate of EPS (3Y):
5.57%
Expected future EPS growth rate is 62.24% higher than the Restaurants industry
Free cash flow (FCF) per share:
$0.59
-
-
Debt per share
$5.71
EBITDA per share
$1.32
Valuation Analysis Today of
LOCO
P/E Ratio:
12.69
P/E Ratio of Competitors/Peers:
99.07
P/E ratio is -87.20% lower than main peers & is -46.39% lower than the industry
Stock price/value with industry average P/E ratio: $17.75
LOCO is -49.85% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.5
Price to sales ratio is -53.90% below the industry mean
P/B (Price to book value ratio):
1.04
Price to free cash flow: 15.16
Price to free cash flow ratio is -70.85% lower than the industry
Net income growth rate (3Y):
-446.29%
Net income growth rate is -356.35% 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:
66.89%
Net debt to equity ratio:
65.22%
Debt to assets ratio:
34.64%
Net debt to assets ratio:
33.78%
Debt-to-asset ratio is -78.02% below industry average
Ability to repay debt:
Interest coverage ratio:
55.86
Interest coverage ratio is 215.93% more than industry average
Looking forward:
Debt growth rate:
-100.00%
Annual debt growth is -369% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.02%
Analysis of Key Statistics
Correlation of price movement with the market:
0.313
Statistical significance of correlation:
LOCO has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.517
Stock price is -39.38% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.517
Correlation of price movement with Nasdaq (^IXIC):
-0.042
Covariance of price movement with the market:
-0.073
Kurtosis
12.88
Returns have severe fat-tails (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:
0.707
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
LOCO
Gross Profit Margin Ratio:
63%
Operating Profit Margin Ratio:
17.65%
Operating profit margin is 87.75% higher than the industry
Net Profit Margin Ratio:
63%
Effective Tax Rate:
26.12%
Effective tax rate is 50.38% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
8.64%
Return on equity (ROE) is 2599.84% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.47%
Return on assets (ROA) is -68.48% lower than the industry
Financial Leverage:
1.5x
Current Ratio:
0.65
Current ratio is -41.75% below industry average
Cash Conversion Cycle (days):
2.2
Cash conversion cycle is -93.41% below industry average
The remaining useful life of property plant & equipment is: 31.3 years
Stock based compensation to net income ratio:
3.03%
In-depth Efficiency Analysis
Revenue generated per employee:
47.3K
Each employee generates -58% less revenue than industry average revenue per employee
EBITDA generated per employee:
10.6K
Each employee generates -58% less EBITDA than industry average revenue per employee
Profit generated per employee:
5.9K
Each employee generates -59% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 1.3K
Each employee generates -154% less free cash flow than industry average revenue per employee
Assets/Capital per employee
121.7K
Each employee generates -154% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
LOCO
BLUE BIRD CORPORATION (XNAS:BLBD)
DULUTH HOLDINGS INC. (XNAS:DLTH)
MASTERCRAFT BOAT HOLDINGS, INC. (XNAS:MCFT)
KURA SUSHI USA, INC. (XNAS:KRUS)
FOSSIL GROUP, INC. (XNAS:FOSL)
GOLDEN NUGGET ONLINE GAMING, INC.. (XNAS:GNOG)
UFP TECHNOLOGIES, INC. (XNAS:UFPT)
DEL TACO RESTAURANTS, INC. (XNAS:TACO)
CARPARTS.COM, INC. (XNAS:PRTS)
Current Analyst Ratings
Strong buy�8%
Buy�0%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/30/22
Revenue:
219.01M
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:
274.04M
73.70M
-
39.33M
39.33M
-
57.36M
96.70M
-
877.00K
11.20M
48.99M
38.65M
27.27M
36.91M
9.64M
27.27M
Statement of Cash Flow
Date:
Period:
3.60M
Differed Income Tax :
- 1169.00K
Stock Based Compensation :
826.00K
Change in Working Capital :
- 7892.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
218.00K
Net Cash Provided by Operating Activities:
- 2305.00K
Investments in PP&E:
- 3772.00K
Net Acquisitions:
-
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):
3/30/22
2022
Q1
25.45M
-
25.45M
14.05M
2.36M
4.60M
46.47M
247.47M
248.67M
61.89M
-
2.45M
2.49M
562.98M
-
609.44M
10.23M
20.19M
8.43M
-
40.60M
71.02M
211.11M
6.88M
222.81M
-
293.83M
366.00K
- 30278.00K
222.0K
345.30M
March 30, 2022 at 6:00:00 AM
315.07M
315.61M
609.44M
-
231.30M
205.8M
-
-
- 3772.00K
- 48.00K
-
-
-
1.53M
1.48M
-
- 4595.00K
25.45M
30.05M
- 2305.00K
- 3772.00K
- 6077.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
LOCO
2023
2024
2025
2026
2027
$9.70
$30.54
$33.12
$35.93
$38.98