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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Eplus Inc. (XNAS:PLUS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PLUS
Name:
EPLUS INC. (XNAS:PLUS)
Sector:
- 72130.00K
Industry:
Software�Application
CEO:
Mr. Mark Marron
Total Employees:
1,602
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -75.84% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF EPLUS INC.(PLUS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�APPLICATION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
45.97
One Month Price Target:
$46.28
Six Month Price Target :
$47.82
Likely Price in One Year's Time:
Ticker:
$49.68
Likely Trading Range Today Under (Normal Volatility)
$45.78
Price Upper limit ($) :
$46.2
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$43.45
This week:
$40.33
This month :
$34.7
Other Primary facts
Market Cap:
1.24B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
26.89M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.41%
-18.66%
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:
$57.67
$52.30
$34.27
$39.64
Medium risk (<10%) entry points
Buy Call
Sell Call
$50.55
Buy Put:
Sell Put:
$49.40
$41.37
$42.54
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PLUS
Sharpe Ratio:
1.54%
Comparison:
PLUS, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 60.18% higher than the industry
& is -32.26% lower than the market/S&P 500 average
Average Returns/Yield of
PLUS
Daily returns:
0.05%
Weekly returns:
0.25%
Monthly returns:
1.01%
Yearly returns:
9.94%
Comparison of returns:
Average annual returns/yield (last 3 years) is 21.87% above industry average
Classification:
PLUS, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.19
Statistical test of Returns:
PLUS has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.69%
Weekly Volatility:
6.03%
Monthly Volatility:
12.05%
Yearly Volatility:
41.75%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.51%
Volatility in last five trading days has been -80.92% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.48%
Weekly VaR:
-12.26%
Monthly VaR:
-24.53%
How Much Can the price of
PLUS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-84.96%
This translates to price declining to:
$36.26
This translates to price declining to:
$6.91
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
PLUS is a 73.11% riskier investment compared to the market/S&P 500 & is 48.30% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -25.03% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PLUS
Beta in relation to market/S&P 500--1.20
Expected beta in 1 year's time:
0.762
Expected beta in 3 year's time:
1.077
Unlevered (debt free) Beta:
1.174
Beta in relation to Nasdaq (XNAS):
0.612
Beta in relation to all global stocks::
0.825
Beta Comparison & Analysis
Beta of competitors/peers::
1.422
Beta is -15.62% lower than peers
Average Industry Beta:
1.335
Beta is -10.17% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
16.16%
Sustainable growth rate is -48.05% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.007
Alpha is -131.43% below industry average alpha yield
Alpha is 47% compared to market & is healthy
Analysis of Cost of Capital of
PLUS
Equity cost of capital:
0.114
Equity cost of capital is -7.56% below industry mean WACC
Unlevered (without debt) cost of capital:
11.12%
Before-tax cost of debt:
0.70%
After-tax cost of debt:
0.56%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.56%
WACC is 5.69% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$50.93
Revenue growth rate per share of (3Y):
2.12
Annual revenue growth rate is -87.65% below industry average
EPS:
$3.93
Expected Annual growth rate of EPS (3Y):
38.33%
Expected future EPS growth rate is 40.12% higher than the Software�Application industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$0.66
EBITDA per share
$6.41
Valuation Analysis Today of
PLUS
P/E Ratio:
3.19
P/E Ratio of Competitors/Peers:
114.23
P/E ratio is -97.21% lower than main peers & is -98.20% lower than the industry
Stock price/value with industry average P/E ratio: $697.96
PLUS is -93.41% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.9
Price to sales ratio is -92.13% below the industry mean
P/B (Price to book value ratio):
2.12
-
-
Net income growth rate (3Y):
39.55%
Net income growth rate is -83.80% 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:
3.05%
Net debt to equity ratio:
14.70%
Debt to assets ratio:
1.65%
Net debt to assets ratio:
7.96%
Debt-to-asset ratio is -96.99% below industry average
Ability to repay debt:
Interest coverage ratio:
136.65
Interest coverage ratio is 157.24% more than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 21.32%
Analysis of Key Statistics
Correlation of price movement with the market:
0.504
Statistical significance of correlation:
PLUS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.503
Stock price is 0.17% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.503
Correlation of price movement with Nasdaq (^IXIC):
0.01
Covariance of price movement with the market:
0.016
Kurtosis
7.222
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:
-0.335
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
PLUS
Gross Profit Margin Ratio:
76%
Operating Profit Margin Ratio:
10.76%
Operating profit margin is -156.14% lower than the industry
Net Profit Margin Ratio:
76%
Effective Tax Rate:
28.11%
Effective tax rate is 6.55% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
18.09%
Return on equity (ROE) is -238.34% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
9.80%
Return on assets (ROA) is -355.19% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
1.73
Current ratio is -42.10% below industry average
Cash Conversion Cycle (days):
103.8
Cash conversion cycle is 9.50% above industry average
The remaining useful life of property plant & equipment is: 5.4 years
Stock based compensation to net income ratio:
1.64%
In-depth Efficiency Analysis
Revenue generated per employee:
854.9K
Each employee generates 147% more revenue than industry average revenue per employee
EBITDA generated per employee:
107.6K
Each employee generates 902% more EBITDA than industry average revenue per employee
Profit generated per employee:
65.9K
Each employee generates -478% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 45.0K
Each employee generates 480% more free cash flow than industry average revenue per employee
Assets/Capital per employee
189.3K
Each employee generates 480% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
PLUS
AXCELIS TECHNOLOGIES, INC. (XNAS:ACLS)
QADA
QADB
CAMTEK LTD (XNAS:CAMT)
EVO PAYMENTS, INC. (XNAS:EVOP)
UPLAND SOFTWARE, INC. (XNAS:UPLD)
EXTREME NETWORKS, INC. (XNAS:EXTR)
GROUPON, INC. (XNAS:GRPN)
ACM RESEARCH, INC. (XNAS:ACMR)
Current Analyst Ratings
Strong buy�4%
Buy�0%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.37B
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:
1.02B
460.98M
-
-
297.12M
-
16.55M
313.67M
-
1.26M
24.31M
172.45M
147.32M
105.60M
146.88M
41.28M
105.60M
Statement of Cash Flow
Date:
Period:
6.08M
Differed Income Tax :
-
Stock Based Compensation :
1.74M
Change in Working Capital :
- 96030.00K
Accounts Receivables:
- 68641.00K
Other Working Capital:
61.00K
Other Non-Cash Items:
- 441.00K
Net Cash Provided by Operating Activities:
- 65136.00K
Investments in PP&E:
- 6994.00K
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):
6/30/21
2022
Q1
93.84M
-
93.84M
562.49M
77.75M
40.12M
774.20M
32.94M
126.65M
35.54M
-
1.47M
106.62M
303.22M
-
1.08B
149.69M
161.83M
6.56M
76.82M
58.07M
446.41M
17.78M
5.29M
47.39M
-
493.80M
146.00K
508.13M
721.0K
74.62M
June 30, 2021 at 6:00:00 AM
1.26B
583.62M
1.08B
-
179.62M
85.8M
-
843.00K
- 6151.00K
- 4819.00K
-
- 3807.00K
-
44.12M
35.49M
71.00K
- 35722.00K
93.84M
129.56M
- 65136.00K
- 6994.00K
- 72130.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
PLUS
2023
2024
2025
2026
2027
$49.93
$205.99
$222.60
$240.55
$259.94