Fate Therapeutics, Inc. (XNAS:FATE) In-Depth Stock/Fundamental/Options Analysis Today

Primary Facts

FATE

Name:

FATE THERAPEUTICS, INC. (XNAS:FATE)

Sector:

- 74697.00K

Industry:

Biotechnology

CEO:

Mr. John Wolchko

Total Employees:

449

Our Technological Advancement Rating

Our Rating:

B

Technological advancement compared to industry is 31.95% higher

ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF FATE THERAPEUTICS, INC.(FATE) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BIOTECHNOLOGY INDUSTRY. DATE: 07/09/2022

Primary Targets/Price Insights

Previous Close ($) :

26.72

One Month Price Target:

$26.97

Six Month Price Target :

$28.22

Likely Price in One Year's Time:

Ticker:

$29.73

Likely Trading Range Today Under (Normal Volatility)
 

$26.54

Price Upper limit ($) :

$27.

Price Lower limit ($) :

Crash Risk Prep/Key Price Levels (High Volatility/Risk)

Price, as per data analysis, isn't likely to fall below:

Today:

$23.95

                                                               This week:

$20.53

                                                        This month :

$14.35

Other Primary facts

Market Cap:

2.45B

Market Cap Classification:

Mid Cap

Number of Shares

IPO Date:

97.00M

Best/Worst Daily Performance (Last 3+ Years)
 

Highest Daily Appreciation:

37.8%

-21.74%

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:

$39.55

$33.61

$13.89

$19.83

Medium risk (<10%) entry points

Buy Call

Sell Call

$31.68

Buy Put:

Sell Put:

$30.41

$21.75

$23.03

These entry points can be used for other strategies, such as butterflies, straddles, etc.

Risk-Adjusted returns (Sharpe Ratio) of

FATE

Sharpe Ratio:

3.36%

Comparison:

FATE, is amongst the top 20% stocks with highest risk-adjusted returns

Sharpe ratio is 72.69% higher than the industry

& ratio is 47.32% higher than the market/S&P 500 average

Average Returns/Yield of

FATE

Daily returns:

0.18%

Weekly returns:

0.91%

Monthly returns:

3.62%

Yearly returns:

25.22%

Comparison of returns:

Average annual returns/yield (last 3 years) is 72.35% above industry average

Classification:

FATE, is amongst the top 20% highest yielding stocks in terms of daily returns

Results of T-Test of Returns:

0.62

Statistical test of Returns:

FATE has yielded returns statistically similar to the market

SHARPE ratio explained.png

Volatility (measured by Standard Deviation)

Daily Volatility:

5.13%

Weekly Volatility:

11.47%

Monthly Volatility:

22.95%

Yearly Volatility:

79.48%

Volitlilty of last five days (Measured by Standard Deviation) 

Average Volatility of this Week:

2.94%

Volatility in last five trading days has been -42.77% below long-term volatility

Value at Risk Analysis (VaR)

Daily VaR:

-10.36%

Weekly VaR:

-23.16%

Monthly VaR:

-46.31%

How Much Can the price of

FATE

Decline in a Recession?

Likely price decline in a recession: 

Base case (decline):

-39%

Worst case (decline):

>85%

This translates to price declining to:

$16.33

This translates to price declining to:

$4.01

Severe Crash Probability

Risk of crash in next 6/12 months: Very high (>70%)

What is Value at Risk (VaR)?

VaR explained figure

Risk Fundamentals

FATE is a 226.88% riskier investment compared to the market/S&P 500 & is 180.04% riskier than Nasdaq (IXIC)

Risk (measured by volatility) is 7.92% above industry average

Overall, it is amongst the top 50% most risky stocks

Beta Examination of

FATE

Beta in relation to market/S&P 500--1.67

Expected beta in 1 year's time:

1.161

Expected beta in 3 year's time:

1.642

Unlevered (debt free) Beta:

-

Beta in relation to Nasdaq (XNAS):

1.614

Beta in relation to all global stocks::

1.11

Beta Comparison & Analysis

Beta of competitors/peers::

1.314

Beta is 27.44% higher than peers

Average Industry Beta: 

1.152

Beta is 45.34% above industry average

Sustainable Growth Rate Analysis

Sustainable growth rate for this stock/firm:

-

-

Alpha provided | Alpha Analysis 

Alpha provided:

0.289

Alpha is 103.43% above industry average alpha yield

Alpha is 1837% higher than market/& is unsustainably high

Analysis of Cost of Capital of

FATE

Equity cost of capital:

0.146

Equity cost of capital is 32.40% above industry mean WACC

Unlevered (without debt) cost of capital:  

-

Before-tax cost of debt:

0.37%

After-tax cost of debt:

0.29%

Overall debt rating:

Highest AAA investment grade

Weighted average cost of capital (WACC):

0.29%

WACC is 40.27% above industry mean WACC

Key Per-Share Metrics & Analysis

Revenue per share:

$0.65

Revenue growth rate per share of (3Y):

4.09

Annual revenue growth rate is 22.85% above the industry average

EPS:

-$2.44

Expected Annual growth rate of  EPS (3Y):

15.87%

Expected future EPS growth rate is 59.00% higher than the Biotechnology industry

Free cash flow (FCF) per share:

-

-

-

Debt per share

$1.11

EBITDA per share

-$2.32

Valuation Analysis Today of

FATE

P/E Ratio:

-

P/E Ratio of Competitors/Peers:

134.55

-

-

FATE is -112.20% undervalued if valued using industry average P/E ratio

-

-

P/S (Price to Sales ratio):

41.06

Price to sales ratio is 1.38% above the industry mean

P/B (Price to book value ratio):

4.09

-

-

Net income growth rate (3Y):

117.29%

Net income growth rate is 66.17% 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:

17.04%

Net debt to equity ratio:

7.70%

Debt to assets ratio:

12.57%

Net debt to assets ratio:

5.68%

Debt-to-asset ratio is -70.17% below industry average

Ability to repay debt:

Interest coverage ratio:

-537.52

Interest coverage ratio is 354.20% more than industry average

Looking forward:

Debt growth rate:

18.01%

Annual debt growth is -87% lower than industry average debt growth rate

Debt repayment rate in last quarter: 0.00%

Analysis of Key Statistics  

Correlation of price movement with the market:

0.486

Statistical significance of correlation:

FATE has a statistically significant correlation with the market

Average Correlation of  the industry with the market:

0.34

Stock price is 42.83% more correlated with the market, compared to the industry average correlation

R Squared (percentage of price movement explained by movement of the market): 

0.34

Correlation of price movement with Nasdaq (^IXIC):

-0.063

Covariance  of price movement with the market:

-0.187

Kurtosis 

5.917

Returns have moderate 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:

0.775

Returns are right (positive) skewed; mean returns are greater than median and mode returns

Fundamental Analysis & Dupont Analysis of

FATE

Gross Profit Margin Ratio:

100%

Operating Profit Margin Ratio:

-388.55%

Operating profit margin is -9.36% lower than the industry

Net Profit Margin Ratio:

100%

Effective Tax Rate:

-

-

Dupont Method

Net Profit Margin

Return on Equity Ratio (ROE):

×

ROA

=

×

-36.75%

Return on equity (ROE) is -35.91% lower than the industry

Financial Leverage

Asset Turnover Ratio (ROA):

-27.12%

Return on assets (ROA) is 32.90% higher than the industry

Financial Leverage:

1.1x

Current Ratio:

7.69

Current ratio is -5.01% below industry average

Cash Conversion Cycle (days):

0

-

The remaining useful life of property plant & equipment is: 3.2 years

Stock based compensation to net income ratio:

-8.31%

In-depth Efficiency  Analysis