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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Iaa, Inc. (XNYS:IAA) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
IAA
Name:
IAA, INC. (XNYS:IAA)
Sector:
66.80M
Industry:
Specialty Business Services
CEO:
Mr. John W. Kett
Total Employees:
4,446
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 483.35% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF IAA, INC.(IAA) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY BUSINESS SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
37.34
One Month Price Target:
$37.63
Six Month Price Target :
$39.1
Likely Price in One Year's Time:
Ticker:
$40.87
Likely Trading Range Today Under (Normal Volatility)
$37.17
Price Upper limit ($) :
$37.52
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$35.19
This week:
$32.54
This month :
$27.74
Other Primary facts
Market Cap:
4.99B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
133.75M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.31%
-22.15%
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:
$47.31
$42.77
$27.37
$31.91
Medium risk (<10%) entry points
Buy Call
Sell Call
$41.29
Buy Put:
Sell Put:
$40.32
$33.38
$34.36
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
IAA
Sharpe Ratio:
0.07%
Comparison:
IAA, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -87.58% lower than the industry
& is -96.79% lower than the market/S&P 500 average
Average Returns/Yield of
IAA
Daily returns:
0.01%
Weekly returns:
0.05%
Monthly returns:
0.22%
Yearly returns:
5.18%
Comparison of returns:
Average annual returns/yield (last 3 years) is -49.52% below industry average
Classification:
IAA, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.56
Statistical test of Returns:
IAA has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.80%
Weekly Volatility:
6.27%
Monthly Volatility:
12.54%
Yearly Volatility:
43.44%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.14%
Volatility in last five trading days has been -59.47% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.75%
Weekly VaR:
-12.85%
Monthly VaR:
-25.71%
How Much Can the price of
IAA
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
-89.06%
This translates to price declining to:
$28.90
This translates to price declining to:
$4.09
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
IAA is a 81.45% riskier investment compared to the market/S&P 500 & is 55.44% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 6.61% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
IAA
Beta in relation to market/S&P 500--1.41
Expected beta in 1 year's time:
-
Expected beta in 3 year's time:
-
Unlevered (debt free) Beta:
0.272
Beta in relation to Nasdaq (XNAS):
0.896
Beta in relation to all global stocks::
0.726
Beta Comparison & Analysis
Beta of competitors/peers::
1.588
Beta is -11.52% lower than peers
Average Industry Beta:
1.172
Beta is 19.86% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
154.79%
Sustainable growth rate is 339.32% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.102
Alpha is 69.39% above industry average alpha yield
Alpha is -647% below the market average
Analysis of Cost of Capital of
IAA
Equity cost of capital:
0.128
Equity cost of capital is 14.26% above industry mean WACC
Unlevered (without debt) cost of capital:
2.47%
Before-tax cost of debt:
2.33%
After-tax cost of debt:
1.84%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.84%
WACC is -43.39% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$14.74
Revenue growth rate per share of (3Y):
12.61
-
EPS:
$2.25
Expected Annual growth rate of EPS (3Y):
14.56%
Expected future EPS growth rate is 102.76% higher than the Specialty Business Services industry
Free cash flow (FCF) per share:
$1.11
-
-
Debt per share
$16.26
EBITDA per share
$4.10
Valuation Analysis Today of
IAA
P/E Ratio:
16.59
P/E Ratio of Competitors/Peers:
34.92
P/E ratio is -52.48% lower than main peers & is -40.57% lower than the industry
Stock price/value with industry average P/E ratio: $62.81
IAA is -40.55% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.53
Price to sales ratio is -27.62% below the industry mean
P/B (Price to book value ratio):
12.61
Price to free cash flow: 33.64
Price to free cash flow ratio is -34.19% lower than the industry
Net income growth rate (3Y):
-
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
549.14%
Net debt to equity ratio:
572.55%
Debt to assets ratio:
68.91%
Net debt to assets ratio:
71.85%
Debt-to-asset ratio is 10.87% above industry average
Ability to repay debt:
Interest coverage ratio:
9.8
Interest coverage ratio is 164.60% more than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 2.79%
Analysis of Key Statistics
Correlation of price movement with the market:
0.636
Statistical significance of correlation:
IAA has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.646
Stock price is -1.48% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.646
Correlation of price movement with Nasdaq (^IXIC):
-0.013
Covariance of price movement with the market:
-0.021
Kurtosis
9.767
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:
-0.921
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
IAA
Gross Profit Margin Ratio:
154%
Operating Profit Margin Ratio:
23.19%
Operating profit margin is 107.10% higher than the industry
Net Profit Margin Ratio:
154%
Effective Tax Rate:
23.98%
Effective tax rate is 37.30% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
76.62%
Return on equity (ROE) is 130.79% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
9.61%
Return on assets (ROA) is 61.84% higher than the industry
Financial Leverage:
3.2x
Current Ratio:
1.52
Current ratio is -23.90% below industry average
Cash Conversion Cycle (days):
38.9
Cash conversion cycle is 49.14% above industry average
The remaining useful life of property plant & equipment is: 2.6 years
Stock based compensation to net income ratio:
0.96%
In-depth Efficiency Analysis
Revenue generated per employee:
443.4K
Each employee generates 61% more revenue than industry average revenue per employee
EBITDA generated per employee:
123.2K
Each employee generates 40% more EBITDA than industry average revenue per employee
Profit generated per employee:
68.2K
Each employee generates 36% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
15.0K
Each employee generates 7% more free cash flow than industry average revenue per employee
Assets/Capital per employee
545.2K
Each employee generates 7% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
IAA
ADT INC. (XNYS:ADT)
Vertiv Holdings Co (XNYS:VRT)
THE AZEK COMPANY INC. (XNYS:AZEK)
ADVANCED DRAINAGE SYSTEMS, INC. (XNYS:WMS)
DONALDSON COMPANY, INC. (XNYS:DCI)
TFI International Inc. (XNYS:TFII)
MASTEC, INC. (XNYS:MTZ)
AerCap Holdings NV (XNYS:AER)
LOUISIANA-PACIFIC CORPORATION (XNYS:LPX)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
4/3/22
Revenue:
1.97B
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:
1.22B
753.20M
-
-
203.20M
-
92.80M
296.00M
-
55.90M
92.80M
547.80M
457.20M
303.40M
399.10M
95.70M
303.40M
Statement of Cash Flow
Date:
Period:
26.10M
Differed Income Tax :
- 700.00K
Stock Based Compensation :
2.90M
Change in Working Capital :
- 5100.00K
Accounts Receivables:
7.90M
Other Working Capital:
-
Other Non-Cash Items:
- 7000.00K
Net Cash Provided by Operating Activities:
97.70M
Investments in PP&E:
- 30900.00K
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):
4/3/22
2022
Q1
136.20M
-
136.20M
448.10M
-
147.40M
731.70M
1.41B
790.70M
195.10M
-
-
30.70M
2.42B
-
3.16B
130.20M
228.90M
-
-
121.50M
480.60M
2.17B
30.30M
2.28B
-
2.76B
1.30M
443.60M
- 21500.0K
- 27400.00K
April 3, 2022 at 6:00:00 AM
1.51B
396.00M
3.16B
-
2.40B
2.3B
-
36.10M
5.20M
- 62400.00K
-
- 8400.00K
-
- 58000.00K
- 128800.00K
- 300.00K
- 26200.00K
136.20M
162.40M
97.70M
- 30900.00K
66.80M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
IAA
2023
2024
2025
2026
2027
$41.07
$64.28
$70.35
$76.99
$84.26