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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
H&E Equipment Services, Inc. (XNAS:HEES) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
HEES
Name:
H&E EQUIPMENT SERVICES, INC. (XNAS:HEES)
Sector:
- 16560.00K
Industry:
Rental & Leasing Services
CEO:
Mr. Bradley Barber
Total Employees:
2,157
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 784.78% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF H&E EQUIPMENT SERVICES, INC.(HEES) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RENTAL & LEASING SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
30.91
One Month Price Target:
$31.27
Six Month Price Target :
$33.1
Likely Price in One Year's Time:
Ticker:
$35.28
Likely Trading Range Today Under (Normal Volatility)
$30.73
Price Upper limit ($) :
$31.13
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$28.56
This week:
$25.65
This month :
$20.39
Other Primary facts
Market Cap:
1.12B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
36.16M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
21.59%
-18.31%
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:
$41.83
$36.82
$19.99
$25.00
Medium risk (<10%) entry points
Buy Call
Sell Call
$35.19
Buy Put:
Sell Put:
$34.12
$26.61
$27.70
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
HEES
Sharpe Ratio:
1.42%
Comparison:
HEES, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -52.63% lower than the industry
& is -37.69% lower than the market/S&P 500 average
Average Returns/Yield of
HEES
Daily returns:
0.06%
Weekly returns:
0.31%
Monthly returns:
1.24%
Yearly returns:
31.25%
Comparison of returns:
Average annual returns/yield (last 3 years) is -52.44% below industry average
Classification:
HEES, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.68
Statistical test of Returns:
HEES has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.74%
Weekly Volatility:
8.36%
Monthly Volatility:
16.71%
Yearly Volatility:
57.90%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.18%
Volatility in last five trading days has been -68.46% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.61%
Weekly VaR:
-17.02%
Monthly VaR:
-34.05%
How Much Can the price of
HEES
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-29%
Worst case (decline):
>85%
This translates to price declining to:
$21.82
This translates to price declining to:
$4.64
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
HEES is a 140.30% riskier investment compared to the market/S&P 500 & is 105.87% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 1.49% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
HEES
Beta in relation to market/S&P 500--2.10
Expected beta in 1 year's time:
1.112
Expected beta in 3 year's time:
1.572
Unlevered (debt free) Beta:
0.481
Beta in relation to Nasdaq (XNAS):
0.6
Beta in relation to all global stocks::
0.84
Beta Comparison & Analysis
Beta of competitors/peers::
1.07
Beta is 96.74% higher than peers
Average Industry Beta:
1.628
Beta is 29.28% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.027
Alpha is -115.98% below industry average alpha yield
Alpha is -172% below the market average
Analysis of Cost of Capital of
HEES
Equity cost of capital:
0.176
Equity cost of capital is 22.84% above industry mean WACC
Unlevered (without debt) cost of capital:
4.01%
Before-tax cost of debt:
3.79%
After-tax cost of debt:
2.99%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
2.99%
WACC is 2.42% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$31.66
Revenue growth rate per share of (3Y):
3.59
Annual revenue growth rate is -163.19% below industry average
EPS:
$3.14
Expected Annual growth rate of EPS (3Y):
-11.93%
Expected future EPS growth rate is -203.33% lower than the Rental & Leasing Services industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: 0.11%
Equity growth rate per share is -99.57% lower than the industry
Debt per share
$39.23
EBITDA per share
$11.82
Valuation Analysis Today of
HEES
P/E Ratio:
12.45
P/E Ratio of Competitors/Peers:
83.59
P/E ratio is -85.10% lower than main peers & is -30.93% lower than the industry
Stock price/value with industry average P/E ratio: $56.61
HEES is -45.40% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $22.55
Present value of the expected future dividends only: $6.26
P/S (Price to Sales ratio):
0.98
Price to sales ratio is -48.15% below the industry mean
P/B (Price to book value ratio):
3.59
-
Price to free cash flow ratio is -72.78% lower than the industry
Net income growth rate (3Y):
-21.81%
Net income growth rate is -109.57% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 12.66%
Dividend yeild: 3.56%
Previous Dividend: $0.28
Previous adjusted dividend: $0.28
Previous Dividend: $1.10
-
-
Average dividend payment (long-term): $0.28
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 09/08/2022
Expected next dividend record date: 25/08/2022
Expected next dividend declaration date: 08/10/2022
Previous dividend payment date: 06/10/2022
Previous dividend record date: 27/05/2022
Previous dividend declaration date: 05/12/2022
Dividend History:
2022-05-26--$0.28
2021-11-22--$0.28
2021-06-01--$0.28
2022-02-28--$0.28
2021-08-26--$0.28
2021-02-25--$0.28
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
455.90%
Net debt to equity ratio:
342.84%
Debt to assets ratio:
66.81%
Net debt to assets ratio:
50.24%
Debt-to-asset ratio is -10.76% below industry average
Ability to repay debt:
Interest coverage ratio:
7.95
Interest coverage ratio is -119.99% less than industry average
Looking forward:
Debt growth rate:
0.80%
Annual debt growth is -96% lower than industry average debt growth rate
Debt repayment rate in last quarter: 16.69%
Analysis of Key Statistics
Correlation of price movement with the market:
0.381
Statistical significance of correlation:
HEES has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.547
Stock price is -30.33% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.547
Correlation of price movement with Nasdaq (^IXIC):
0.009
Covariance of price movement with the market:
0.019
Kurtosis
3.723
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:
0.141
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
HEES
Gross Profit Margin Ratio:
160%
Operating Profit Margin Ratio:
13.65%
Operating profit margin is 40.17% higher than the industry
Net Profit Margin Ratio:
160%
Effective Tax Rate:
25.92%
Effective tax rate is 13.98% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
25.23%
Return on equity (ROE) is -152.60% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.70%
Return on assets (ROA) is -5.95% lower than the industry
Financial Leverage:
3.0x
Current Ratio:
3.43
Current ratio is 168.83% above industry average
Cash Conversion Cycle (days):
13.9
Cash conversion cycle is -36.61% below industry average
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
2.14%
In-depth Efficiency Analysis
Revenue generated per employee:
530.8K
Each employee generates -77% less revenue than industry average revenue per employee
EBITDA generated per employee:
198.1K
Each employee generates -100% less EBITDA than industry average revenue per employee
Profit generated per employee:
36.4K
Each employee generates -100% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 7.7K
Each employee generates -104% less free cash flow than industry average revenue per employee
Assets/Capital per employee
686.4K
Each employee generates -104% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
HEES
TRIMAS CORPORATION (XNAS:TRS)
MARTEN TRANSPORT, LTD. (XNAS:MRTN)
COLUMBUS MCKINNON CORPORATION (XNAS:CMCO)
Raven Property Group Limited (MISX:RAVN)
US ECOLOGY, INC. (XNAS:ECOL)
HEARTLAND EXPRESS, INC. (XNAS:HTLD)
MATTHEWS INTERNATIONAL CORPORATION (XNAS:MATW)
FORTERRA, INC. (XNAS:FRTA)
KFORCE INC. (XNAS:KFRC)
Current Analyst Ratings
Strong buy�8%
Buy�4%
Hold�8%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.14B
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:
689.83M
455.08M
-
-
306.56M
-
-
306.56M
-
53.76M
267.52M
427.27M
156.31M
78.52M
105.99M
27.47M
78.52M
Statement of Cash Flow
Date:
Period:
67.87M
Differed Income Tax :
4.90M
Stock Based Compensation :
1.68M
Change in Working Capital :
- 47131.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
- 5129.00K
Net Cash Provided by Operating Activities:
38.49M
Investments in PP&E:
- 55045.00K
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):
3/31/22
2022
Q1
351.80M
-
351.80M
161.10M
103.36M
26.48M
642.74M
1.39B
63.14M
24.00M
-
-
1.28M
1.48B
-
2.12B
112.86M
-
-
-
74.63M
187.49M
1.42B
-
1.62B
-
1.81B
403.00K
133.08M
-
177.68M
March 31, 2022 at 6:00:00 AM
996.38M
311.16M
2.12B
-
1.42B
1.1B
-
21.35M
- 33699.00K
- 284165.00K
-
- 343.00K
- 9942.00K
284.17M
- 10285.00K
-
- 5499.00K
351.80M
357.30M
38.49M
- 55045.00K
- 16560.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
HEES
2023
2024
2025
2026
2027
$35.46
$100.96
$115.24
$131.54
$150.15