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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Insmed Incorporated (XNAS:INSM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
INSM
Name:
INSMED INCORPORATED (XNAS:INSM)
Sector:
- 106862.00K
Industry:
Biotechnology
CEO:
Mr. William Lewis
Total Employees:
613
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 19.49% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF INSMED INCORPORATED(INSM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BIOTECHNOLOGY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
24.55
One Month Price Target:
$24.79
Six Month Price Target :
$25.97
Likely Price in One Year's Time:
Ticker:
$27.4
Likely Trading Range Today Under (Normal Volatility)
$24.4
Price Upper limit ($) :
$24.75
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$22.41
This week:
$19.77
This month :
$14.99
Other Primary facts
Market Cap:
2.88B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
119.98M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
40.6%
-24.07%
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:
$34.46
$29.90
$14.64
$19.20
Medium risk (<10%) entry points
Buy Call
Sell Call
$28.42
Buy Put:
Sell Put:
$27.44
$20.67
$21.66
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
INSM
Sharpe Ratio:
2.14%
Comparison:
INSM, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 10.16% higher than the industry
& is -6.02% lower than the market/S&P 500 average
Average Returns/Yield of
INSM
Daily returns:
0.10%
Weekly returns:
0.50%
Monthly returns:
2.01%
Yearly returns:
25.22%
Comparison of returns:
Average annual returns/yield (last 3 years) is -4.20% below industry average
Classification:
INSM, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.94
Statistical test of Returns:
INSM has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.29%
Weekly Volatility:
9.59%
Monthly Volatility:
19.17%
Yearly Volatility:
66.42%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
3.04%
Volatility in last five trading days has been -29.09% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-8.70%
Weekly VaR:
-19.46%
Monthly VaR:
-38.93%
How Much Can the price of
INSM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-33%
Worst case (decline):
>85%
This translates to price declining to:
$16.38
This translates to price declining to:
$3.68
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
INSM is a 174.75% riskier investment compared to the market/S&P 500 & is 135.37% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -9.82% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
INSM
Beta in relation to market/S&P 500--1.73
Expected beta in 1 year's time:
0.773
Expected beta in 3 year's time:
1.094
Unlevered (debt free) Beta:
0.22
Beta in relation to Nasdaq (XNAS):
0.853
Beta in relation to all global stocks::
0.969
Beta Comparison & Analysis
Beta of competitors/peers::
1.286
Beta is 34.33% higher than peers
Average Industry Beta:
1.152
Beta is 49.99% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.092
Alpha is -35.27% below industry average alpha yield
Alpha is 584% higher than market/& is unsustainably high
Analysis of Cost of Capital of
INSM
Equity cost of capital:
0.150
Equity cost of capital is 35.73% above industry mean WACC
Unlevered (without debt) cost of capital:
1.90%
Before-tax cost of debt:
4.05%
After-tax cost of debt:
3.20%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.20%
WACC is -29.03% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$1.68
Revenue growth rate per share of (3Y):
24.57
Annual revenue growth rate is 111.98% above the industry average
EPS:
-$3.78
Expected Annual growth rate of EPS (3Y):
8.83%
Expected future EPS growth rate is -11.51% lower than the Biotechnology industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$6.89
EBITDA per share
-$3.27
Valuation Analysis Today of
INSM
P/E Ratio:
-
P/E Ratio of Competitors/Peers:
102.98
-
-
INSM is -107.24% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
14.63
Price to sales ratio is -63.89% below the industry mean
P/B (Price to book value ratio):
24.57
-
-
Net income growth rate (3Y):
-8.07%
Net income growth rate is -111.44% lower than the industry average net income growth rate
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:
689.47%
Net debt to equity ratio:
267.42%
Debt to assets ratio:
71.67%
Net debt to assets ratio:
27.80%
Debt-to-asset ratio is 69.99% above industry average
Ability to repay debt:
Interest coverage ratio:
-11.59
Interest coverage ratio is -90.20% less than industry average
Looking forward:
Debt growth rate:
51.24%
Annual debt growth is -62% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.04%
Analysis of Key Statistics
Correlation of price movement with the market:
0.373
Statistical significance of correlation:
INSM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.34
Stock price is 9.74% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.34
Correlation of price movement with Nasdaq (^IXIC):
-0.035
Covariance of price movement with the market:
-0.086
Kurtosis
14.112
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
1.107
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
INSM
Gross Profit Margin Ratio:
308%
Operating Profit Margin Ratio:
-189.27%
Operating profit margin is -55.85% lower than the industry
Net Profit Margin Ratio:
308%
Effective Tax Rate:
0.37%
Effective tax rate is -93.57% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-365.06%
Return on equity (ROE) is 536.73% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-37.95%
Return on assets (ROA) is 85.99% higher than the industry
Financial Leverage:
3.5x
Current Ratio:
6.04
Current ratio is -25.42% below industry average
Cash Conversion Cycle (days):
-112.1
Cash conversion cycle is -121.02% below industry average
The remaining useful life of property plant & equipment is: 12.9 years
Stock based compensation to net income ratio:
-2.93%
In-depth Efficiency Analysis
Revenue generated per employee:
328.5K
Each employee generates -80% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 640.0K
Each employee generates -266% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 713.9K
Each employee generates -658% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 174.3K
Each employee generates -218% less free cash flow than industry average revenue per employee
Assets/Capital per employee
647.9K
Each employee generates -218% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 50.56%
Growth rate in R&D investment/expenditure is -1509.18% lower than the industry
Competitors/Peer firms of
INSM
Tilray Brands, Inc. (XNAS:TLRY)
OPKO HEALTH, INC. (XNAS:OPK)
IRHYTHM TECHNOLOGIES, INC. (XNAS:IRTC)
EQRx, Inc. (XNAS:EQRX)
CYTOKINETICS, INCORPORATED (XNAS:CYTK)
ADAPTHEALTH CORP. (XNAS:AHCO)
1LIFE HEALTHCARE, INC (XNAS:ONEM)
ZENTALIS PHARMACEUTICALS, INC. (XNAS:ZNTL)
I-MAB (XNAS:IMAB)
Current Analyst Ratings
Strong buy�13%
Buy�17%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
201.35M
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:
46.50M
154.86M
295.71M
239.47M
239.47M
-
5.05M
540.23M
-
33.84M
13.08M
- 392323.00K
- 381094.00K
- 437634.00K
- 439246.00K
- 1612.00K
- 437634.00K
Statement of Cash Flow
Date:
Period:
2.55M
Differed Income Tax :
-
Stock Based Compensation :
12.82M
Change in Working Capital :
- 18214.00K
Accounts Receivables:
- 1798.00K
Other Working Capital:
- 22978.00K
Other Non-Cash Items:
- 7698.00K
Net Cash Provided by Operating Activities:
- 105161.00K
Investments in PP&E:
- 1701.00K
Net Acquisitions:
-
Purchases of Investments:
- 99706.00K
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
515.70M
119.42M
635.12M
25.72M
64.15M
31.15M
756.14M
101.77M
136.11M
72.55M
29.55M
-
57.20M
397.18M
-
1.15B
48.57M
9.75M
-
-
66.93M
125.25M
826.54M
81.65M
908.19M
-
1.03B
1.19M
- 2309665.00K
- 230.0K
-
March 31, 2022 at 6:00:00 AM
586.73M
119.88M
1.15B
148.97M
836.29M
320.6M
-
-
- 101407.00K
- 359.00K
-
-
-
6.82M
6.46M
- 969.00K
- 201078.00K
515.70M
716.78M
- 105161.00K
- 1701.00K
- 106862.00K
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
INSM
2023
2024
2025
2026
2027
$27.49
$30.68
$34.24
$38.21
$42.65