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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Focus Financial Partners Inc. (XNAS:FOCS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
FOCS
Name:
FOCUS FINANCIAL PARTNERS INC. (XNAS:FOCS)
Sector:
- 7874.00K
Industry:
Asset Management
CEO:
Mr. Ruediger Adolf
Total Employees:
4,400
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -22.62% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF FOCUS FINANCIAL PARTNERS INC.(FOCS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ASSET MANAGEMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
37.58
One Month Price Target:
$37.85
Six Month Price Target :
$39.2
Likely Price in One Year's Time:
Ticker:
$40.82
Likely Trading Range Today Under (Normal Volatility)
$37.41
Price Upper limit ($) :
$37.82
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$35.14
This week:
$32.13
This month :
$26.68
Other Primary facts
Market Cap:
2.91B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
77.48M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
20.95%
-18.3%
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:
$48.89
$43.67
$26.27
$31.49
Medium risk (<10%) entry points
Buy Call
Sell Call
$41.97
Buy Put:
Sell Put:
$40.85
$33.18
$34.31
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
FOCS
Sharpe Ratio:
2.68%
Comparison:
FOCS, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 233.38% higher than the industry
& ratio is 17.61% higher than the market/S&P 500 average
Average Returns/Yield of
FOCS
Daily returns:
0.09%
Weekly returns:
0.47%
Monthly returns:
1.90%
Yearly returns:
9.18%
Comparison of returns:
Average annual returns/yield (last 3 years) is 147.70% above industry average
Classification:
FOCS, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.89
Statistical test of Returns:
FOCS has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.21%
Weekly Volatility:
7.17%
Monthly Volatility:
14.34%
Yearly Volatility:
49.66%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.21%
Volatility in last five trading days has been -31.05% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.49%
Weekly VaR:
-14.51%
Monthly VaR:
-29.02%
How Much Can the price of
FOCS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$28.35
This translates to price declining to:
$5.64
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
FOCS is a 104.81% riskier investment compared to the market/S&P 500 & is 75.46% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 23.36% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
FOCS
Beta in relation to market/S&P 500--1.28
Expected beta in 1 year's time:
0.78
Expected beta in 3 year's time:
1.104
Unlevered (debt free) Beta:
1.077
Beta in relation to Nasdaq (XNAS):
0.744
Beta in relation to all global stocks::
1.082
Beta Comparison & Analysis
Beta of competitors/peers::
1.218
Beta is 5.48% higher than peers
Average Industry Beta:
1.694
Beta is -24.18% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
1.04%
Sustainable growth rate is -96.31% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.108
Alpha is -293.74% below industry average alpha yield
Alpha is 687% higher than market/& is unsustainably high
Analysis of Cost of Capital of
FOCS
Equity cost of capital:
0.120
Equity cost of capital is -19.01% below industry mean WACC
Unlevered (without debt) cost of capital:
10.02%
Before-tax cost of debt:
2.28%
After-tax cost of debt:
1.80%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.80%
WACC is -17.52% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$25.04
Revenue growth rate per share of (3Y):
2.46
Annual revenue growth rate is -57.51% below industry average
EPS:
$0.61
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$3.98
Balance sheet equity growth per share: 785.90%
Equity growth rate per share is 3618.85% higher than the industry
Debt per share
$3.67
EBITDA per share
$4.59
Valuation Analysis Today of
FOCS
P/E Ratio:
34.91
P/E Ratio of Competitors/Peers:
235.79
P/E ratio is -85.20% lower than main peers & is 116.18% higher than the industry
Stock price/value with industry average P/E ratio: $9.85
FOCS is 281.52% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.5
Price to sales ratio is -78.10% below the industry mean
P/B (Price to book value ratio):
2.46
Price to free cash flow: 9.44
Price to free cash flow ratio is 23.66% higher than the industry
Net income growth rate (3Y):
-1427.71%
Net income growth rate is -1082.06% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 20.91%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
30.24%
Net debt to equity ratio:
255.61%
Debt to assets ratio:
6.05%
Net debt to assets ratio:
51.12%
Debt-to-asset ratio is -88.43% below industry average
Ability to repay debt:
Interest coverage ratio:
5.73
Interest coverage ratio is -90.37% less than industry average
Looking forward:
Debt growth rate:
17.46%
Annual debt growth is -353% lower than industry average debt growth rate
Debt repayment rate in last quarter: 2.12%
Analysis of Key Statistics
Correlation of price movement with the market:
0.48
Statistical significance of correlation:
FOCS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.576
Stock price is -16.74% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.576
Correlation of price movement with Nasdaq (^IXIC):
-0.045
Covariance of price movement with the market:
-0.084
Kurtosis
7.526
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:
0.205
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
FOCS
Gross Profit Margin Ratio:
161%
Operating Profit Margin Ratio:
8.32%
Operating profit margin is -82.30% lower than the industry
Net Profit Margin Ratio:
161%
Effective Tax Rate:
36.12%
Effective tax rate is 47.90% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
4.17%
Return on equity (ROE) is -83.50% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.83%
Return on assets (ROA) is -85.70% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
0.27
Current ratio is -93.02% below industry average
Cash Conversion Cycle (days):
34.9
Cash conversion cycle is -95.99% below industry average
The remaining useful life of property plant & equipment is: 14.9 years
Stock based compensation to net income ratio:
17.08%
In-depth Efficiency Analysis
Revenue generated per employee:
441.0K
Each employee generates -68% less revenue than industry average revenue per employee
EBITDA generated per employee:
80.8K
Each employee generates -111% less EBITDA than industry average revenue per employee
Profit generated per employee:
8.9K
Each employee generates -101% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 1.8K
Each employee generates -99% less free cash flow than industry average revenue per employee
Assets/Capital per employee
913.1K
Each employee generates -99% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
FOCS
VALLEY NATIONAL BANCORP (XNAS:VLYPP)
VALLEY NATIONAL BANCORP (XNAS:VLYPO)
TEXAS CAPITAL BANCSHARES, INC. (XNAS:TCBI)
SERVISFIRST BANCSHARES, INC. (XNYS:SFBS)
CATHAY GENERAL BANCORP (XNAS:CATY)
INVESTORS BANCORP, INC. (XNAS:ISBC)
INDEPENDENT BANK GROUP, INC. (XNAS:IBTX)
TRUPANION, INC. (XNAS:TRUP)
AMERICAN NATIONAL GROUP, INC. (XNAS:ANAT)
Current Analyst Ratings
Strong buy�0%
Buy�13%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.94B
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:
1.16B
781.27M
-
-
322.46M
-
210.81M
533.27M
378.00K
62.10M
219.79M
355.66M
161.52M
39.26M
95.55M
34.51M
39.26M
Statement of Cash Flow
Date:
Period:
63.91M
Differed Income Tax :
6.42M
Stock Based Compensation :
6.71M
Change in Working Capital :
- 113210.00K
Accounts Receivables:
- 10478.00K
Other Working Capital:
1.81M
Other Non-Cash Items:
- 7554.00K
Net Cash Provided by Operating Activities:
- 4642.00K
Investments in PP&E:
- 3232.00K
Net Acquisitions:
- 2603.00K
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
317.03M
-
317.03M
209.21M
-
162.00M
688.24M
302.90M
1.93B
1.53B
-
258.23M
3.58M
4.02B
-
4.71B
14.72M
2.44B
-
12.74M
104.76M
2.57B
284.61M
631.94M
953.06M
-
3.52B
769.00K
54.10M
20.5M
-
March 31, 2022 at 6:00:00 AM
1.69B
941.19M
4.46B
-
2.72B
2.4B
-
- 5232.00K
- 11067.00K
- 6174.00K
-
-
- 8209.00K
36.12M
21.74M
319.00K
6.35M
317.03M
310.68M
- 4642.00K
- 3232.00K
- 7874.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
FOCS
2023
2024
2025
2026
2027
$41.02
$72.56
$78.82
$85.63
$93.02