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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Homestreet, Inc. (XNAS:HMST) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
HMST
Name:
HOMESTREET, INC. (XNAS:HMST)
Sector:
122.45M
Industry:
Banks�Regional
CEO:
Mr. Mark Mason
Total Employees:
956
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 96.26% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF HOMESTREET, INC.(HMST) 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 ($) :
34.32
One Month Price Target:
$34.52
Six Month Price Target :
$35.54
Likely Price in One Year's Time:
Ticker:
$36.76
Likely Trading Range Today Under (Normal Volatility)
$34.18
Price Upper limit ($) :
$34.49
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$32.45
This week:
$30.14
This month :
$25.95
Other Primary facts
Market Cap:
636.57M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
18.72M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.4%
-14.94%
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:
$43.01
$39.02
$25.63
$29.62
Medium risk (<10%) entry points
Buy Call
Sell Call
$37.73
Buy Put:
Sell Put:
$36.88
$30.90
$31.76
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
HMST
Sharpe Ratio:
1.26%
Comparison:
HMST, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 2.74% higher than the industry
& is -44.63% lower than the market/S&P 500 average
Average Returns/Yield of
HMST
Daily returns:
0.04%
Weekly returns:
0.21%
Monthly returns:
0.85%
Yearly returns:
10.91%
Comparison of returns:
Average annual returns/yield (last 3 years) is -6.25% below industry average
Classification:
HMST, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.83
Statistical test of Returns:
HMST has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.68%
Weekly Volatility:
5.98%
Monthly Volatility:
11.97%
Yearly Volatility:
41.46%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.79%
Volatility in last five trading days has been -70.42% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.45%
Weekly VaR:
-12.19%
Monthly VaR:
-24.39%
How Much Can the price of
HMST
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-84.48%
This translates to price declining to:
$27.09
This translates to price declining to:
$5.33
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
HMST is a 72.13% riskier investment compared to the market/S&P 500 & is 47.46% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -6.32% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
HMST
Beta in relation to market/S&P 500--1.06
Expected beta in 1 year's time:
0.91
Expected beta in 3 year's time:
1.288
Unlevered (debt free) Beta:
0.817
Beta in relation to Nasdaq (XNAS):
0.635
Beta in relation to all global stocks::
0.8
Beta Comparison & Analysis
Beta of competitors/peers::
0.998
Beta is 5.80% higher than peers
Average Industry Beta:
0.964
Beta is 9.60% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
13.08%
Sustainable growth rate is 43.30% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.002
Alpha is -113.38% below industry average alpha yield
Alpha is -10% below the market average
Analysis of Cost of Capital of
HMST
Equity cost of capital:
0.104
Equity cost of capital is 6.50% above industry mean WACC
Unlevered (without debt) cost of capital:
8.03%
Before-tax cost of debt:
3.33%
After-tax cost of debt:
2.63%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.63%
WACC is -14.08% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$17.30
Revenue growth rate per share of (3Y):
1.07
Annual revenue growth rate is -88.62% below industry average
EPS:
$5.12
Expected Annual growth rate of EPS (3Y):
102.25%
Expected future EPS growth rate is 750.48% higher than the Banks�Regional industry
Free cash flow (FCF) per share:
$10.95
-
-
Debt per share
$11.97
EBITDA per share
$8.89
Valuation Analysis Today of
HMST
P/E Ratio:
7.32
P/E Ratio of Competitors/Peers:
11.46
P/E ratio is -36.12% lower than main peers & is -41.01% lower than the industry
Stock price/value with industry average P/E ratio: $63.53
HMST is -45.98% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.98
Price to sales ratio is -53.61% below the industry mean
P/B (Price to book value ratio):
1.07
Price to free cash flow: 3.13
-
Net income growth rate (3Y):
277.30%
Net income growth rate is 403.52% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 6.78%
Dividend yeild: 3.50%
Previous Dividend: $0.35
Previous adjusted dividend: $0.35
Previous Dividend: $1.20
Expected next dividend best case: $0.42
Expected next dividend worst case: $0.28
Average dividend payment (long-term): $0.22
Average dividend increase/decrease (growth rate) % per period: 10.67%
Expected next dividend payment date: 22/08/2022
Expected next dividend record date: 08/08/2022
Expected next dividend declaration date: 27/07/2022
Previous dividend payment date: 24/05/2022
Previous dividend record date: 05/10/2022
Previous dividend declaration date: 28/04/2022
Dividend History:
2022-05-09--$0.35
2021-11-08--$0.25
2021-05-10--$0.25
2022-02-08--$0.35
2021-08-09--$0.25
2021-02-08--$0.25
Dividend growth rate is -54.70% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
37.28%
Net debt to equity ratio:
70.40%
Debt to assets ratio:
2.98%
Net debt to assets ratio:
5.64%
Debt-to-asset ratio is -98.21% below industry average
Ability to repay debt:
Interest coverage ratio:
10.06
Interest coverage ratio is 1113.25% more than industry average
Looking forward:
Debt growth rate:
-62.77%
Annual debt growth is -19920% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.06%
Analysis of Key Statistics
Correlation of price movement with the market:
0.581
Statistical significance of correlation:
HMST has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.501
Stock price is 16.13% 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):
0.021
Covariance of price movement with the market:
0.033
Kurtosis
5.607
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:
0.197
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
HMST
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
11.71%
Operating profit margin is -67.31% lower than the industry
Net Profit Margin Ratio:
100%
Effective Tax Rate:
21.45%
Effective tax rate is -0.45% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
17.58%
Return on equity (ROE) is 47.38% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.41%
Return on assets (ROA) is -38.93% 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: 22.9 years
Stock based compensation to net income ratio:
1.02%
In-depth Efficiency Analysis
Revenue generated per employee:
338.7K
Each employee generates -11% less revenue than industry average revenue per employee
EBITDA generated per employee:
174.0K
Each employee generates -23% less EBITDA than industry average revenue per employee
Profit generated per employee:
110.6K
Each employee generates -22% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
128.1K
Each employee generates 54% more free cash flow than industry average revenue per employee
Assets/Capital per employee
1.3M
Each employee generates 54% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
HMST
LAKELAND BANCORP, INC. (XNAS:LBAI)
REPUBLIC BANCORP, INC. (XNAS:RBCAA)
BMTC GROUP INC. (XTSE:GBT)
MIDCAP FINANCIAL INVESTMENT CORPORATION (XNAS:MFIC)
WORLD ACCEPTANCE CORPORATION (XNAS:WRLD)
Washington Trust Bancorp, Inc. (XNAS:WASH)
PREFERRED BANK (XNAS:PFBC)
NATIONAL WESTERN LIFE GROUP, INC. (XNAS:NWLI)
NORTHFIELD BANCORP, INC. (XNAS:NFBK)
Current Analyst Ratings
Strong buy�0%
Buy�4%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
323.79M
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:
-
85.70M
-
189.50M
189.50M
-
- 37905.00K
10.40M
243.63M
16.55M
15.26M
166.38M
-
105.71M
134.58M
28.87M
105.71M
Statement of Cash Flow
Date:
Period:
4.55M
Differed Income Tax :
5.36M
Stock Based Compensation :
1.08M
Change in Working Capital :
- 9115.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
102.06M
Net Cash Provided by Operating Activities:
123.89M
Investments in PP&E:
- 1444.00K
Net Acquisitions:
-
Purchases of Investments:
- 161016.00K
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
73.86M
-
73.86M
-
-
-
-
56.27M
31.46M
111.66M
1.08B
-
-
1.28B
8.79B
7.51B
141.99M
273.00M
-
-
-
414.99M
224.14M
-
224.14M
6.72B
6.91B
223.72M
408.44M
- 30929.0K
-
March 31, 2022 at 6:00:00 AM
-
601.23M
7.51B
-
497.14M
423.3M
35.09M
- 336571.00K
- 463940.00K
- 145.00K
-
- 75000.00K
- 7164.00K
431.01M
348.70M
-
8.65M
73.86M
65.21M
123.89M
- 1444.00K
122.45M
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
HMST
2023
2024
2025
2026
2027
$36.94
$76.67
$82.11
$87.94
$94.18