_edited.png)
RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Heritage Commerce Corp (XNAS:HTBK) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
HTBK
Name:
HERITAGE COMMERCE CORP (XNAS:HTBK)
Sector:
16.56M
Industry:
Banks�Regional
CEO:
Mr. Keith Wilton
Total Employees:
332
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 213.17% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF HERITAGE COMMERCE CORP(HTBK) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BANKS�REGIONAL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
11.39
One Month Price Target:
$11.45
Six Month Price Target :
$11.77
Likely Price in One Year's Time:
Ticker:
$12.15
Likely Trading Range Today Under (Normal Volatility)
$11.34
Price Upper limit ($) :
$11.45
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$10.71
This week:
$9.87
This month :
$8.34
Other Primary facts
Market Cap:
675.24M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
60.67M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.03%
-17.8%
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:
$14.55
$13.11
$8.23
$9.67
Medium risk (<10%) entry points
Buy Call
Sell Call
$12.64
Buy Put:
Sell Put:
$12.33
$10.14
$10.45
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
HTBK
Sharpe Ratio:
0.76%
Comparison:
HTBK, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -38.08% lower than the industry
& is -66.63% lower than the market/S&P 500 average
Average Returns/Yield of
HTBK
Daily returns:
0.03%
Weekly returns:
0.16%
Monthly returns:
0.62%
Yearly returns:
10.91%
Comparison of returns:
Average annual returns/yield (last 3 years) is -31.56% below industry average
Classification:
HTBK, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.71
Statistical test of Returns:
HTBK has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.93%
Weekly Volatility:
6.55%
Monthly Volatility:
13.09%
Yearly Volatility:
45.35%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.75%
Volatility in last five trading days has been -74.34% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.98%
Weekly VaR:
-13.37%
Monthly VaR:
-26.74%
How Much Can the price of
HTBK
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
-92.65%
This translates to price declining to:
$8.74
This translates to price declining to:
$0.84
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
HTBK is a 88.76% riskier investment compared to the market/S&P 500 & is 61.71% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 2.47% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
HTBK
Beta in relation to market/S&P 500--0.99
Expected beta in 1 year's time:
0.622
Expected beta in 3 year's time:
0.88
Unlevered (debt free) Beta:
0.948
Beta in relation to Nasdaq (XNAS):
0.51
Beta in relation to all global stocks::
0.974
Beta Comparison & Analysis
Beta of competitors/peers::
1.046
Beta is -5.03% lower than peers
Average Industry Beta:
0.964
Beta is 3.10% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
2.78%
Sustainable growth rate is -69.57% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.025
Alpha is -314.44% below industry average alpha yield
Alpha is -158% below the market average
Analysis of Cost of Capital of
HTBK
Equity cost of capital:
0.100
Equity cost of capital is 2.10% above industry mean WACC
Unlevered (without debt) cost of capital:
9.50%
Before-tax cost of debt:
17.54%
After-tax cost of debt:
13.86%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
13.86%
WACC is -13.10% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$2.62
Revenue growth rate per share of (3Y):
1.15
Annual revenue growth rate is -162.78% below industry average
EPS:
$0.81
Expected Annual growth rate of EPS (3Y):
-3.16%
Expected future EPS growth rate is -126.32% lower than the Banks�Regional industry
Free cash flow (FCF) per share:
$1.02
Balance sheet equity growth per share: 16.47%
Equity growth rate per share is -57.46% lower than the industry
Debt per share
$0.66
EBITDA per share
$1.31
Valuation Analysis Today of
HTBK
P/E Ratio:
12.52
P/E Ratio of Competitors/Peers:
24.57
P/E ratio is -49.02% lower than main peers & is 0.92% higher than the industry
Stock price/value with industry average P/E ratio: $10.05
HTBK is 13.32% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $20.00
Present value of the expected future dividends only: $5.75
P/S (Price to Sales ratio):
4.34
Price to sales ratio is 1.47% above the industry mean
P/B (Price to book value ratio):
1.15
Price to free cash flow: 11.13
-
Net income growth rate (3Y):
-7.15%
Net income growth rate is -112.98% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 15.90%
Dividend yeild: 4.57%
Previous Dividend: $0.13
Previous adjusted dividend: $0.13
Previous Dividend: $0.52
Expected next dividend best case: $0.13
Expected next dividend worst case: $0.13
Average dividend payment (long-term): $0.13
Average dividend increase/decrease (growth rate) % per period: 0.83%
Expected next dividend payment date: 24/08/2022
Expected next dividend record date: 08/10/2022
Expected next dividend declaration date: 27/07/2022
Previous dividend payment date: 26/05/2022
Previous dividend record date: 05/12/2022
Previous dividend declaration date: 28/04/2022
Dividend History:
2022-05-11--$0.13
2021-11-08--$0.13
2021-05-12--$0.13
2022-02-09--$0.13
2021-08-11--$0.13
2021-02-11--$0.13
Dividend growth rate is -96.48% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
6.65%
Net debt to equity ratio:
-195.85%
Debt to assets ratio:
0.74%
Net debt to assets ratio:
-21.69%
Debt-to-asset ratio is -99.56% below industry average
Ability to repay debt:
Interest coverage ratio:
11.32
Interest coverage ratio is 1265.79% more than industry average
Looking forward:
Debt growth rate:
0.47%
Annual debt growth is 47% higher 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:
0.463
Statistical significance of correlation:
HTBK has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.501
Stock price is -7.44% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.501
Correlation of price movement with Nasdaq (^IXIC):
0.031
Covariance of price movement with the market:
0.052
Kurtosis
6.078
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:
-0.004
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
HTBK
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
-
Effective Tax Rate:
27.77%
Effective tax rate is 28.87% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
8.21%
Return on equity (ROE) is -31.16% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.91%
Return on assets (ROA) is -60.53% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 1.4 years
Stock based compensation to net income ratio:
1.35%
In-depth Efficiency Analysis
Revenue generated per employee:
479.6K
Each employee generates 26% more revenue than industry average revenue per employee
EBITDA generated per employee:
239.1K
Each employee generates 6% more EBITDA than industry average revenue per employee
Profit generated per employee:
148.7K
Each employee generates 5% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
49.9K
Each employee generates -40% less free cash flow than industry average revenue per employee
Assets/Capital per employee
3.1M
Each employee generates -40% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
HTBK
TWCT
E.MERGE TECHNOLOGY ACQUISITION CORP. (XNAS:ETAC)
HUDSON EXECUTIVE INVESTMENT CORP. III (XNAS:HIII)
BLUCORA, INC. (XNAS:BCOR)
TRUSTCO BANK CORP N Y (XNAS:TRST)
FLUSHING FINANCIAL CORPORATION (XNAS:FFIC)
AGC
AMTBB
AMERANT BANCORP INC. (XNAS:AMTB)
Current Analyst Ratings
Strong buy�8%
Buy�4%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
159.24M
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:
-
-
-
60.81M
60.81M
-
-
-
156.40M
7.01M
4.03M
79.39M
-
49.36M
68.34M
18.98M
49.36M
Statement of Cash Flow
Date:
Period:
942.00K
Differed Income Tax :
-
Stock Based Compensation :
667.00K
Change in Working Capital :
1.58M
Accounts Receivables:
7.05M
Other Working Capital:
-
Other Non-Cash Items:
730.00K
Net Cash Provided by Operating Activities:
16.78M
Investments in PP&E:
- 224.00K
Net Acquisitions:
-
Purchases of Investments:
- 131266.00K
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
1.22B
111.22M
1.33B
79.29M
-
-
-
9.58M
167.63M
13.01M
848.04M
-
-
1.04B
6.47B
5.43B
96.45M
-
-
-
-
-
39.99M
-
39.99M
4.87B
4.83B
498.76M
116.35M
- 14054.0K
-
March 31, 2022 at 6:00:00 AM
-
601.06M
5.43B
959.26M
39.99M
- 1177178.0K
38.81M
63.80M
- 28880.00K
-
-
-
- 7848.00K
- 69106.00K
- 76954.00K
-
- 89051.00K
1.22B
1.31B
16.78M
- 224.00K
16.56M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
HTBK
2023
2024
2025
2026
2027
$14.87
$15.86
$16.92
$18.05
$19.25