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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Laboratory Corporation Of America Holdings (XNYS:LH) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
LH
Name:
LABORATORY CORPORATION OF AMERICA HOLDINGS (XNYS:LH)
Sector:
238.80M
Industry:
Diagnostics & Research
CEO:
Mr. Adam Schechter
Total Employees:
75,500
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -1.12% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF LABORATORY CORPORATION OF AMERICA HOLDINGS(LH) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND DIAGNOSTICS & RESEARCH INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
225.74
One Month Price Target:
$227.09
Six Month Price Target :
$233.85
Likely Price in One Year's Time:
Ticker:
$241.97
Likely Trading Range Today Under (Normal Volatility)
$225.01
Price Upper limit ($) :
$226.79
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$215.17
This week:
$202.1
This month :
$178.46
Other Primary facts
Market Cap:
20.44B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
90.40M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.89%
-19.28%
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:
$274.78
$252.12
$176.70
$199.36
Medium risk (<10%) entry points
Buy Call
Sell Call
$244.75
Buy Put:
Sell Put:
$239.92
$206.67
$211.56
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
LH
Sharpe Ratio:
2.67%
Comparison:
LH, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 6.10% higher than the industry
& ratio is 17.22% higher than the market/S&P 500 average
Average Returns/Yield of
LH
Daily returns:
0.07%
Weekly returns:
0.35%
Monthly returns:
1.41%
Yearly returns:
27.92%
Comparison of returns:
Average annual returns/yield (last 3 years) is -39.22% below industry average
Classification:
LH, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.56
Statistical test of Returns:
LH has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.31%
Weekly Volatility:
5.18%
Monthly Volatility:
10.35%
Yearly Volatility:
35.86%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.86%
Volatility in last five trading days has been -62.67% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.68%
Weekly VaR:
-10.47%
Monthly VaR:
-20.95%
How Much Can the price of
LH
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-72.56%
This translates to price declining to:
$185.76
This translates to price declining to:
$61.95
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
LH is a 47.83% riskier investment compared to the market/S&P 500 & is 26.65% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -40.04% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
LH
Beta in relation to market/S&P 500--1.07
Expected beta in 1 year's time:
0.729
Expected beta in 3 year's time:
1.031
Unlevered (debt free) Beta:
0.745
Beta in relation to Nasdaq (XNAS):
0.722
Beta in relation to all global stocks::
0.949
Beta Comparison & Analysis
Beta of competitors/peers::
0.899
Beta is 18.93% higher than peers
Average Industry Beta:
1.181
Beta is -9.45% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
23.17%
Sustainable growth rate is -56.14% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.065
Alpha is -61.08% below industry average alpha yield
Alpha is 413% higher than market/& is unsustainably high
Analysis of Cost of Capital of
LH
Equity cost of capital:
0.105
Equity cost of capital is -6.80% below industry mean WACC
Unlevered (without debt) cost of capital:
7.30%
Before-tax cost of debt:
3.27%
After-tax cost of debt:
2.58%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.58%
WACC is -6.74% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$175.43
Revenue growth rate per share of (3Y):
1.9
Annual revenue growth rate is -58.60% below industry average
EPS:
$21.78
Expected Annual growth rate of EPS (3Y):
42.53%
Expected future EPS growth rate is 58.45% higher than the Diagnostics & Research industry
Free cash flow (FCF) per share:
$18.64
-
-
Debt per share
$67.37
EBITDA per share
$40.61
Valuation Analysis Today of
LH
P/E Ratio:
10.81
P/E Ratio of Competitors/Peers:
35.73
P/E ratio is -69.76% lower than main peers & is -70.93% lower than the industry
Stock price/value with industry average P/E ratio: $809.70
LH is -72.12% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.29
Price to sales ratio is -86.46% below the industry mean
P/B (Price to book value ratio):
1.9
Price to free cash flow: 12.11
Price to free cash flow ratio is -73.34% lower than the industry
Net income growth rate (3Y):
182.09%
Net income growth rate is -179.67% lower than the industry average net income growth rate
Dividend Analysis
-
Dividend yeild: 0.32%
Previous Dividend: $0.72
Previous adjusted dividend: $0.72
Previous Dividend: $0.72
-
-
Average dividend payment (long-term): $0.72
-
Expected next dividend payment date: 09/07/2022
Expected next dividend record date: 17/08/2022
Expected next dividend declaration date: 07/06/2022
Previous dividend payment date: 06/09/2022
Previous dividend record date: 19/05/2022
Previous dividend declaration date: 04/07/2022
Dividend History:
2022-05-18--$0.72
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
56.81%
Net debt to equity ratio:
47.18%
Debt to assets ratio:
29.38%
Net debt to assets ratio:
24.40%
Debt-to-asset ratio is -39.54% below industry average
Ability to repay debt:
Interest coverage ratio:
17.84
Interest coverage ratio is -163.60% less than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.648
Statistical significance of correlation:
LH has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.488
Stock price is 32.82% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.488
Correlation of price movement with Nasdaq (^IXIC):
-0.008
Covariance of price movement with the market:
-0.01
Kurtosis
14.002
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:
-0.779
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
LH
Gross Profit Margin Ratio:
133%
Operating Profit Margin Ratio:
18.22%
Operating profit margin is -116.20% lower than the industry
Net Profit Margin Ratio:
133%
Effective Tax Rate:
23.44%
Effective tax rate is 22.15% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
19.58%
Return on equity (ROE) is -6.80% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
10.13%
Return on assets (ROA) is -103.75% lower than the industry
Financial Leverage:
1.4x
Current Ratio:
1.98
Current ratio is -60.16% below industry average
Cash Conversion Cycle (days):
33
Cash conversion cycle is -33.45% below industry average
The remaining useful life of property plant & equipment is: 11.4 years
Stock based compensation to net income ratio:
1.82%
In-depth Efficiency Analysis
Revenue generated per employee:
210.1K
Each employee generates -44% less revenue than industry average revenue per employee
EBITDA generated per employee:
48.6K
Each employee generates 62% more EBITDA than industry average revenue per employee
Profit generated per employee:
27.8K
Each employee generates 74% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
3.2K
Each employee generates -245% less free cash flow than industry average revenue per employee
Assets/Capital per employee
205.3K
Each employee generates -245% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
LH
AMERISOURCEBERGEN CORPORATION (XNYS:ABC)
ZIMMER BIOMET HOLDINGS, INC. (XNYS:ZBH)
WEST PHARMACEUTICAL SERVICES, INC. (XNYS:WST)
PERKINELMER, INC. (XNYS:PKI)
Koninklijke Philips NV (XNYS:PHG)
WATERS CORPORATION (XNYS:WAT)
THE COOPER COMPANIES, INC. (XNYS:COO)
RESMED INC. (XASX:RMD)
BIO-B
Current Analyst Ratings
Strong buy�13%
Buy�42%
Hold�25%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
15.86B
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:
10.60B
5.26B
-
-
1.99B
-
344.60M
2.33B
-
205.80M
722.70M
3.67B
2.89B
2.10B
2.74B
643.40M
2.10B
Statement of Cash Flow
Date:
Period:
161.50M
Differed Income Tax :
- 19000.00K
Stock Based Compensation :
38.20M
Change in Working Capital :
- 363300.00K
Accounts Receivables:
20.40M
Other Working Capital:
- 2900.00K
Other Non-Cash Items:
46.50M
Net Cash Provided by Operating Activities:
356.00M
Investments in PP&E:
-
Net Acquisitions:
- 457300.00K
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):
3/31/22
2022
Q1
1.23B
-
1.23B
3.04B
440.70M
515.70M
5.23B
2.81B
8.17B
3.97B
62.20M
28.20M
462.60M
15.50B
-
20.73B
623.60M
201.50M
-
556.00M
1.26B
2.64B
6.09B
510.40M
7.37B
-
10.01B
8.50M
10.95B
- 264900.0K
-
March 31, 2022 at 6:00:00 AM
12.93B
10.72B
20.73B
-
6.29B
5.1B
400.00K
- 116200.00K
- 573100.00K
-
-
-
-
- 17700.00K
- 17700.00K
- 4400.00K
- 239200.00K
1.23B
1.47B
356.00M
- 117200.00K
238.80M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
LH
2023
2024
2025
2026
2027
$243.18
$549.23
$588.71
$631.02
$676.39