_edited.png)
RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Flowserve Corporation (XNYS:FLS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
FLS
Name:
FLOWSERVE CORPORATION (XNYS:FLS)
Sector:
- 40825.00K
Industry:
Specialty Industrial Machinery
CEO:
Mr. R. Scott Rowe
Total Employees:
15,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -13.80% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF FLOWSERVE CORPORATION(FLS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY INDUSTRIAL MACHINERY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
30.12
One Month Price Target:
$30.39
Six Month Price Target :
$31.72
Likely Price in One Year's Time:
Ticker:
$33.33
Likely Trading Range Today Under (Normal Volatility)
$29.96
Price Upper limit ($) :
$30.26
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$28.32
This week:
$26.09
This month :
$22.06
Other Primary facts
Market Cap:
3.92B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
130.69M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.15%
-18.24%
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:
$38.49
$34.70
$21.75
$25.54
Medium risk (<10%) entry points
Buy Call
Sell Call
$33.47
Buy Put:
Sell Put:
$32.66
$26.76
$27.58
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
FLS
Sharpe Ratio:
-1.20%
Comparison:
FLS, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -163.41% lower than the industry
& is -152.71% lower than the market/S&P 500 average
Average Returns/Yield of
FLS
Daily returns:
-0.03%
Weekly returns:
-0.13%
Monthly returns:
-0.52%
Yearly returns:
16.25%
Comparison of returns:
Average annual returns/yield (last 3 years) is -138.42% below industry average
Classification:
FLS, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.74
Statistical test of Returns:
FLS has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.90%
Weekly Volatility:
6.49%
Monthly Volatility:
12.97%
Yearly Volatility:
44.95%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.61%
Volatility in last five trading days has been -78.97% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.98%
Weekly VaR:
-13.38%
Monthly VaR:
-26.76%
How Much Can the price of
FLS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-24%
Worst case (decline):
-92.71%
This translates to price declining to:
$22.90
This translates to price declining to:
$2.20
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
FLS is a 88.90% riskier investment compared to the market/S&P 500 & is 61.83% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 6.05% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
FLS
Beta in relation to market/S&P 500--1.58
Expected beta in 1 year's time:
0.856
Expected beta in 3 year's time:
1.211
Unlevered (debt free) Beta:
0.866
Beta in relation to Nasdaq (XNAS):
0.768
Beta in relation to all global stocks::
0.8
Beta Comparison & Analysis
Beta of competitors/peers::
1.174
Beta is 34.92% higher than peers
Average Industry Beta:
1.281
Beta is 23.60% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
3.57%
Sustainable growth rate is -76.05% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.202
Alpha is -568.50% below industry average alpha yield
Alpha is -1289% below the market average
Analysis of Cost of Capital of
FLS
Equity cost of capital:
0.140
Equity cost of capital is 17.37% above industry mean WACC
Unlevered (without debt) cost of capital:
7.65%
Before-tax cost of debt:
3.46%
After-tax cost of debt:
2.73%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.73%
WACC is -73.05% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$26.82
Revenue growth rate per share of (3Y):
2.2
Annual revenue growth rate is -135.41% below industry average
EPS:
$0.73
Expected Annual growth rate of EPS (3Y):
-20.90%
Expected future EPS growth rate is -785.42% lower than the Specialty Industrial Machinery industry
Free cash flow (FCF) per share:
$0.99
Balance sheet equity growth per share: 5.64%
Equity growth rate per share is -47.78% lower than the industry
Debt per share
$10.80
EBITDA per share
$1.85
Valuation Analysis Today of
FLS
P/E Ratio:
41.35
P/E Ratio of Competitors/Peers:
12.9
P/E ratio is 220.66% higher than main peers & is 50.29% higher than the industry
Stock price/value with industry average P/E ratio: $20.09
FLS is 49.96% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $13.00
Present value of the expected future dividends only: $5.97
P/S (Price to Sales ratio):
1.12
Price to sales ratio is -72.93% below the industry mean
P/B (Price to book value ratio):
2.2
Price to free cash flow: 30.49
Price to free cash flow ratio is -26.46% lower than the industry
Net income growth rate (3Y):
5.66%
Net income growth rate is 320.83% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 27.20%
Dividend yeild: 2.66%
Previous Dividend: $0.20
Previous adjusted dividend: $0.20
Previous Dividend: $0.80
Expected next dividend best case: $0.20
Expected next dividend worst case: $0.20
Average dividend payment (long-term): $0.20
Average dividend increase/decrease (growth rate) % per period: 0.53%
Expected next dividend payment date: 10/06/2022
Expected next dividend record date: 22/09/2022
-
Previous dividend payment date: 07/08/2022
Previous dividend record date: 24/06/2022
-
Dividend History:
2022-06-23--$0.20
2021-12-29--$0.20
2021-06-24--$0.20
2022-03-24--$0.20
2021-09-23--$0.20
2021-03-25--$0.20
Dividend growth rate is -84.80% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
80.44%
Net debt to equity ratio:
52.05%
Debt to assets ratio:
30.02%
Net debt to assets ratio:
19.42%
Debt-to-asset ratio is -44.37% below industry average
Ability to repay debt:
Interest coverage ratio:
4.7
Interest coverage ratio is -75.90% less than industry average
Looking forward:
Debt growth rate:
-22.49%
Annual debt growth is -130% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.54%
Analysis of Key Statistics
Correlation of price movement with the market:
0.631
Statistical significance of correlation:
FLS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.635
Stock price is -0.71% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.635
Correlation of price movement with Nasdaq (^IXIC):
0.034
Covariance of price movement with the market:
0.057
Kurtosis
4.454
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:
-0.368
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
FLS
Gross Profit Margin Ratio:
115%
Operating Profit Margin Ratio:
6.33%
Operating profit margin is -126.16% lower than the industry
Net Profit Margin Ratio:
115%
Effective Tax Rate:
-3.14%
Effective tax rate is -116.79% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
5.47%
Return on equity (ROE) is 62.88% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.04%
Return on assets (ROA) is -56.48% lower than the industry
Financial Leverage:
1.4x
Current Ratio:
2.07
Current ratio is -31.44% below industry average
Cash Conversion Cycle (days):
40.6
Cash conversion cycle is -34.01% below industry average
The remaining useful life of property plant & equipment is: 6.8 years
Stock based compensation to net income ratio:
11.46%
In-depth Efficiency Analysis
Revenue generated per employee:
233.7K
Each employee generates -94% less revenue than industry average revenue per employee
EBITDA generated per employee:
16.2K
Each employee generates -98% less EBITDA than industry average revenue per employee
Profit generated per employee:
6.4K
Each employee generates -98% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 2.7K
Each employee generates -105% less free cash flow than industry average revenue per employee
Assets/Capital per employee
155.1K
Each employee generates -105% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
FLS
TRITON INTERNATIONAL LIMITED (XNYS:TRTN)
CORE & MAIN, INC. (XNYS:CNM)
RYDER SYSTEM, INC. (XNYS:R)
WNS (HOLDINGS) LIMITED (XNYS:WNS)
KORN FERRY (XNYS:KFY)
APPLIED INDUSTRIAL TECHNOLOGIES, INC. (XNYS:AIT)
KIRBY CORPORATION (XNYS:KEX)
AL-PA
NAMVIET JOINT - STOCK COMPANY (XSTC:NAV)
Current Analyst Ratings
Strong buy�8%
Buy�8%
Hold�54%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
3.50B
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:
2.50B
1.01B
-
-
804.90M
-
-
804.90M
3.11M
51.53M
97.98M
242.36M
222.02M
96.05M
102.14M
- 3205.00K
96.05M
Statement of Cash Flow
Date:
Period:
23.54M
Differed Income Tax :
-
Stock Based Compensation :
11.01M
Change in Working Capital :
- 54542.00K
Accounts Receivables:
5.04M
Other Working Capital:
12.48M
Other Non-Cash Items:
6.89M
Net Cash Provided by Operating Activities:
- 26773.00K
Investments in PP&E:
-
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):
3/31/22
2022
Q1
575.80M
-
575.80M
930.26M
722.38M
148.43M
2.38B
693.93M
1.19B
148.46M
-
31.69M
265.85M
2.33B
-
4.70B
418.72M
77.55M
-
204.16M
447.18M
1.15B
1.41B
352.70M
1.76B
-
2.91B
220.99M
3.65B
- 570931.0K
-
March 31, 2022 at 6:00:00 AM
3.30B
1.75B
4.67B
-
1.49B
913.4M
-
- 12218.00K
- 12218.00K
- 7593.00K
-
-
- 26128.00K
- 4670.00K
- 38391.00K
- 5275.00K
- 82657.00K
575.80M
658.45M
- 26773.00K
- 14052.00K
- 40825.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
FLS
2023
2024
2025
2026
2027
$28.66
$31.71
$35.09
$38.82
$42.95