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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Home Bancshares, Inc. (XNYS:HOMB) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
HOMB
Name:
HOME BANCSHARES, INC. (XNYS:HOMB)
Sector:
87.42M
Industry:
Banks�Regional
CEO:
Mr. John Allison
Total Employees:
1,992
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -557.88% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF HOME BANCSHARES, INC.(HOMB) 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 ($) :
22.97
One Month Price Target:
$23.13
Six Month Price Target :
$23.9
Likely Price in One Year's Time:
Ticker:
$24.84
Likely Trading Range Today Under (Normal Volatility)
$22.87
Price Upper limit ($) :
$23.11
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$21.54
This week:
$19.77
This month :
$16.57
Other Primary facts
Market Cap:
4.57B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
205.07M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.68%
-15.75%
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:
$29.61
$26.55
$16.33
$19.39
Medium risk (<10%) entry points
Buy Call
Sell Call
$25.56
Buy Put:
Sell Put:
$24.90
$20.37
$21.04
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
HOMB
Sharpe Ratio:
2.15%
Comparison:
HOMB, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 75.03% higher than the industry
& is -5.67% lower than the market/S&P 500 average
Average Returns/Yield of
HOMB
Daily returns:
0.07%
Weekly returns:
0.37%
Monthly returns:
1.50%
Yearly returns:
10.91%
Comparison of returns:
Average annual returns/yield (last 3 years) is 64.63% above industry average
Classification:
HOMB, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.77
Statistical test of Returns:
HOMB has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.07%
Weekly Volatility:
6.86%
Monthly Volatility:
13.73%
Yearly Volatility:
47.55%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.45%
Volatility in last five trading days has been -85.31% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.23%
Weekly VaR:
-13.93%
Monthly VaR:
-27.86%
How Much Can the price of
HOMB
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-24%
Worst case (decline):
>85%
This translates to price declining to:
$17.51
This translates to price declining to:
$3.45
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
HOMB is a 96.61% riskier investment compared to the market/S&P 500 & is 68.43% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 7.45% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
HOMB
Beta in relation to market/S&P 500--1.21
Expected beta in 1 year's time:
0.75
Expected beta in 3 year's time:
1.061
Unlevered (debt free) Beta:
0.928
Beta in relation to Nasdaq (XNAS):
0.658
Beta in relation to all global stocks::
1.079
Beta Comparison & Analysis
Beta of competitors/peers::
1.061
Beta is 14.04% higher than peers
Average Industry Beta:
0.964
Beta is 25.59% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
8.23%
Sustainable growth rate is -9.82% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.065
Alpha is 462.22% above industry average alpha yield
Alpha is 415% higher than market/& is unsustainably high
Analysis of Cost of Capital of
HOMB
Equity cost of capital:
0.114
Equity cost of capital is 17.32% above industry mean WACC
Unlevered (without debt) cost of capital:
8.77%
Before-tax cost of debt:
4.81%
After-tax cost of debt:
3.80%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.80%
WACC is -4.24% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$3.26
Revenue growth rate per share of (3Y):
1.75
Annual revenue growth rate is -55.49% below industry average
EPS:
$1.98
Expected Annual growth rate of EPS (3Y):
4.69%
Expected future EPS growth rate is -60.96% lower than the Banks�Regional industry
Free cash flow (FCF) per share:
$2.10
Balance sheet equity growth per share: 22.27%
Equity growth rate per share is -42.49% lower than the industry
Debt per share
$5.21
EBITDA per share
$2.21
Valuation Analysis Today of
HOMB
P/E Ratio:
16.71
P/E Ratio of Competitors/Peers:
345.86
P/E ratio is -95.17% lower than main peers & is 34.64% higher than the industry
Stock price/value with industry average P/E ratio: $24.57
HOMB is -6.51% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $106.48
Present value of the expected future dividends only: $7.04
P/S (Price to Sales ratio):
7.05
Price to sales ratio is 64.91% above the industry mean
P/B (Price to book value ratio):
1.75
Price to free cash flow: 10.96
Price to free cash flow ratio is -37.87% lower than the industry
Net income growth rate (3Y):
12.55%
Net income growth rate is -77.22% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 9.25%
Dividend yeild: 2.66%
Previous Dividend: $0.17
Previous adjusted dividend: $0.17
Previous Dividend: $0.61
Expected next dividend best case: $0.18
Expected next dividend worst case: $0.15
Average dividend payment (long-term): $0.14
Average dividend increase/decrease (growth rate) % per period: 2.55%
Expected next dividend payment date: 09/06/2022
Expected next dividend record date: 16/08/2022
Expected next dividend declaration date: 26/07/2022
Previous dividend payment date: 06/08/2022
Previous dividend record date: 18/05/2022
Previous dividend declaration date: 27/04/2022
Dividend History:
2022-05-17--$0.17
2021-11-16--$0.14
2021-05-11--$0.14
2022-02-15--$0.17
2021-08-10--$0.14
2021-02-16--$0.14
Dividend growth rate is -89.17% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
39.75%
Net debt to equity ratio:
-94.97%
Debt to assets ratio:
5.74%
Net debt to assets ratio:
-13.70%
Debt-to-asset ratio is -96.56% below industry average
Ability to repay debt:
Interest coverage ratio:
8.8
Interest coverage ratio is 962.20% more than industry average
Looking forward:
Debt growth rate:
0.10%
Annual debt growth is -69% 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:
0.534
Statistical significance of correlation:
HOMB has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.501
Stock price is 6.57% more 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
Covariance of price movement with the market:
0.001
Kurtosis
5.677
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:
0.318
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
HOMB
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
-
Effective Tax Rate:
23.32%
Effective tax rate is 8.22% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
10.88%
Return on equity (ROE) is -8.80% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.57%
Return on assets (ROA) is -31.87% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
0.72%
In-depth Efficiency Analysis
Revenue generated per employee:
335.3K
Each employee generates -12% less revenue than industry average revenue per employee
EBITDA generated per employee:
227.1K
Each employee generates 1% more EBITDA than industry average revenue per employee
Profit generated per employee:
146.7K
Each employee generates 4% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
43.9K
Each employee generates -47% less free cash flow than industry average revenue per employee
Assets/Capital per employee
2.4M
Each employee generates -47% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
HOMB
INVESTORS BANCORP, INC. (XNAS:ISBC)
GOOSEHEAD INSURANCE, INC. (XNAS:GSHD)
PACIFIC PREMIER BANCORP, INC. (XNAS:PPBI)
Brighthouse Financial, Inc. (XNAS:BHFAP)
ENSTAR GROUP LIMITED (XNAS:ESGRP)
UNITED COMMUNITY BANKS, INC. (XNAS:UCBI)
GORES METROPOULOS II UNT (XNAS:GMIIU)
TRUPANION, INC. (XNAS:TRUP)
EASTERN BANKSHARES, INC. (XNAS:EBC)
Current Analyst Ratings
Strong buy�4%
Buy�8%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
667.87M
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:
-
-
-
213.06M
218.14M
5.08M
-
-
607.42M
51.39M
19.85M
452.44M
-
292.31M
381.20M
88.89M
292.31M
Statement of Cash Flow
Date:
Period:
5.09M
Differed Income Tax :
2.38M
Stock Based Compensation :
2.11M
Change in Working Capital :
16.17M
Accounts Receivables:
217.00K
Other Working Capital:
-
Other Non-Cash Items:
- 1159.00K
Net Cash Provided by Operating Activities:
89.49M
Investments in PP&E:
- 2067.00K
Net Acquisitions:
-
Purchases of Investments:
- 651848.00K
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
3.62B
2.96B
6.58B
46.93M
-
-
-
274.50M
973.03M
23.62M
3.46B
-
-
4.73B
23.35B
18.62B
131.34M
-
-
-
-
-
1.07B
-
1.07B
17.00B
15.93B
1.64M
1.30B
- 104557.0K
-
March 31, 2022 at 6:00:00 AM
-
2.69B
18.62B
6.41B
1.07B
- 2551590.0K
150.72M
- 213215.00K
- 716414.00K
-
-
- 4089.00K
- 27043.00K
627.20M
596.07M
-
- 30857.00K
3.62B
3.65B
89.49M
- 2067.00K
87.42M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
HOMB
2023
2024
2025
2026
2027
$24.96
$219.96
$237.85
$257.19
$278.11