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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Live Oak Bancshares, Inc. (XNAS:LOB) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
LOB
Name:
LIVE OAK BANCSHARES, INC. (XNAS:LOB)
Sector:
136.40M
Industry:
Banks�Regional
CEO:
Mr. James Mahan
Total Employees:
891
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF LIVE OAK BANCSHARES, INC.(LOB) 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 ($) :
33.84
One Month Price Target:
$34.13
Six Month Price Target :
$35.58
Likely Price in One Year's Time:
Ticker:
$37.33
Likely Trading Range Today Under (Normal Volatility)
$33.67
Price Upper limit ($) :
$34.11
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$31.25
This week:
$28.06
This month :
$22.27
Other Primary facts
Market Cap:
1.48B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
43.87M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
18.1%
-17.8%
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:
$45.83
$40.26
$21.85
$27.42
Medium risk (<10%) entry points
Buy Call
Sell Call
$38.45
Buy Put:
Sell Put:
$37.26
$29.22
$30.42
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
LOB
Sharpe Ratio:
3.84%
Comparison:
LOB, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 212.23% higher than the industry
& ratio is 68.28% higher than the market/S&P 500 average
Average Returns/Yield of
LOB
Daily returns:
0.15%
Weekly returns:
0.77%
Monthly returns:
3.09%
Yearly returns:
10.91%
Comparison of returns:
Average annual returns/yield (last 3 years) is 239.79% above industry average
Classification:
LOB, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.73
Statistical test of Returns:
LOB has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.80%
Weekly Volatility:
8.49%
Monthly Volatility:
16.98%
Yearly Volatility:
58.82%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
3.33%
Volatility in last five trading days has been -12.29% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.64%
Weekly VaR:
-17.09%
Monthly VaR:
-34.18%
How Much Can the price of
LOB
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-28%
Worst case (decline):
>85%
This translates to price declining to:
$24.21
This translates to price declining to:
$5.08
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
LOB is a 141.25% riskier investment compared to the market/S&P 500 & is 106.68% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 32.92% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
LOB
Beta in relation to market/S&P 500--1.53
Expected beta in 1 year's time:
0.859
Expected beta in 3 year's time:
1.215
Unlevered (debt free) Beta:
1.288
Beta in relation to Nasdaq (XNAS):
1.107
Beta in relation to all global stocks::
0.902
Beta Comparison & Analysis
Beta of competitors/peers::
1.646
Beta is -6.76% lower than peers
Average Industry Beta:
0.964
Beta is 59.23% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
24.40%
Sustainable growth rate is 167.26% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.234
Alpha is 1918.17% above industry average alpha yield
Alpha is 1490% higher than market/& is unsustainably high
Analysis of Cost of Capital of
LOB
Equity cost of capital:
0.137
Equity cost of capital is 40.09% above industry mean WACC
Unlevered (without debt) cost of capital:
11.47%
Before-tax cost of debt:
31.06%
After-tax cost of debt:
24.54%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
24.54%
WACC is 21.06% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$10.39
Revenue growth rate per share of (3Y):
2.08
Annual revenue growth rate is 230.49% above the industry average
EPS:
$3.59
Expected Annual growth rate of EPS (3Y):
102.02%
Expected future EPS growth rate is 748.56% higher than the Banks�Regional industry
Free cash flow (FCF) per share:
$4.20
Balance sheet equity growth per share: 3204.33%
Equity growth rate per share is 8175.11% higher than the industry
Debt per share
$4.03
EBITDA per share
$6.55
Valuation Analysis Today of
LOB
P/E Ratio:
7.8
P/E Ratio of Competitors/Peers:
19.67
P/E ratio is -60.36% lower than main peers & is -37.16% lower than the industry
Stock price/value with industry average P/E ratio: $44.55
LOB is -24.04% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $16.70
Present value of the expected future dividends only: $0.88
P/S (Price to Sales ratio):
3.26
Price to sales ratio is -23.82% below the industry mean
P/B (Price to book value ratio):
2.08
Price to free cash flow: 8.06
Price to free cash flow ratio is 1109.65% higher than the industry
Net income growth rate (3Y):
198.95%
Net income growth rate is 261.25% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 0.81%
Dividend yeild: 0.35%
Previous Dividend: $0.03
Previous adjusted dividend: $0.03
Previous Dividend: $0.12
-
-
Average dividend payment (long-term): $0.03
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 09/12/2022
Expected next dividend record date: 29/08/2022
Expected next dividend declaration date: 15/08/2022
Previous dividend payment date: 14/06/2022
Previous dividend record date: 31/05/2022
Previous dividend declaration date: 17/05/2022
Dividend History:
2022-05-27--$0.03
2021-11-26--$0.03
2021-05-24--$0.03
2022-02-28--$0.03
2021-09-03--$0.03
2021-03-08--$0.03
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
24.80%
Net debt to equity ratio:
-39.97%
Debt to assets ratio:
2.05%
Net debt to assets ratio:
-3.31%
Debt-to-asset ratio is -98.77% below industry average
Ability to repay debt:
Interest coverage ratio:
4.7
Interest coverage ratio is 466.75% more than industry average
Looking forward:
Debt growth rate:
-79.36%
Annual debt growth is -25159% lower than industry average debt growth rate
Debt repayment rate in last quarter: 42.99%
Analysis of Key Statistics
Correlation of price movement with the market:
0.597
Statistical significance of correlation:
LOB has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.501
Stock price is 19.29% 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):
-0.023
Covariance of price movement with the market:
-0.052
Kurtosis
3.712
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:
-0.077
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
LOB
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
100%
Effective Tax Rate:
22.85%
Effective tax rate is 6.04% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
22.72%
Return on equity (ROE) is 90.46% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.88%
Return on assets (ROA) is -18.41% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
-
Stock based compensation to net income ratio:
3.06%
In-depth Efficiency Analysis
Revenue generated per employee:
511.5K
Each employee generates 35% more revenue than industry average revenue per employee
EBITDA generated per employee:
322.4K
Each employee generates 43% more EBITDA than industry average revenue per employee
Profit generated per employee:
181.9K
Each employee generates 29% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
153.1K
Each employee generates 84% more free cash flow than industry average revenue per employee
Assets/Capital per employee
0.0K
Each employee generates 84% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
LOB
Mr. Cooper Group Inc. (XNAS:COOP)
FULTON FINANCIAL CORPORATION (XNAS:FULT)
TCBIP
FIRST INTERSTATE BANCSYSTEM, INC. (XNAS:FIBK)
FREEDOM HOLDING CORP. (XNAS:FRHC)
Calamos Strat Tot Ret (XNAS:CSQ)
UNITED COMMUNITY BANKS, INC. (XNAS:UCBI)
MARATHON DIGITAL HOLDINGS, INC. (XNAS:MARA)
FIRSTCASH HOLDINGS, INC. (XNAS:FCFS)
Current Analyst Ratings
Strong buy�0%
Buy�8%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
455.73M
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:
-
105.02M
-
166.74M
172.82M
6.08M
- 38205.00K
5.00M
365.77M
61.16M
16.03M
287.27M
-
162.08M
210.08M
48.00M
162.08M
Statement of Cash Flow
Date:
Period:
5.41M
Differed Income Tax :
6.78M
Stock Based Compensation :
4.95M
Change in Working Capital :
- 4367.00K
Accounts Receivables:
-
Other Working Capital:
- 12.00K
Other Non-Cash Items:
109.16M
Net Cash Provided by Operating Activities:
156.44M
Investments in PP&E:
- 20036.00K
Net Acquisitions:
-
Purchases of Investments:
- 37837.00K
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
482.03M
844.58M
1.33B
-
-
-
-
254.87M
-
-
844.58M
-
-
-
8.62B
8.62B
-
19.98M
-
-
-
19.98M
176.93M
-
176.93M
8.06B
7.91B
315.61M
434.23M
- 36506.0K
-
March 31, 2022 at 6:00:00 AM
-
713.33M
8.62B
1.69B
196.91M
- 285117.0K
47.30M
- 242630.00K
- 253206.00K
- 133404.00K
-
-
- 1312.00K
535.50M
400.79M
-
304.02M
507.77M
203.75M
156.44M
- 20036.00K
136.40M
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
LOB
2023
2024
2025
2026
2027
$37.52
$80.68
$88.99
$98.17
$108.29