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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Merit Medical Systems, Inc. (XNAS:MMSI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MMSI
Name:
MERIT MEDICAL SYSTEMS, INC. (XNAS:MMSI)
Sector:
2.14M
Industry:
Medical Instruments & Supplies
CEO:
Mr. Fred Lampropoulos
Total Employees:
6,446
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -1209.88% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MERIT MEDICAL SYSTEMS, INC.(MMSI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND MEDICAL INSTRUMENTS & SUPPLIES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
57.6
One Month Price Target:
$57.92
Six Month Price Target :
$59.53
Likely Price in One Year's Time:
Ticker:
$61.45
Likely Trading Range Today Under (Normal Volatility)
$57.41
Price Upper limit ($) :
$57.94
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$54.43
This week:
$50.52
This month :
$43.44
Other Primary facts
Market Cap:
3.27B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
56.76M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.16%
-23.05%
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:
$72.27
$65.43
$42.93
$49.77
Medium risk (<10%) entry points
Buy Call
Sell Call
$63.20
Buy Put:
Sell Put:
$61.74
$51.98
$53.46
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MMSI
Sharpe Ratio:
4.53%
Comparison:
MMSI, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 182.62% higher than the industry
& ratio is 98.54% higher than the market/S&P 500 average
Average Returns/Yield of
MMSI
Daily returns:
0.13%
Weekly returns:
0.66%
Monthly returns:
2.66%
Yearly returns:
14.68%
Comparison of returns:
Average annual returns/yield (last 3 years) is 117.20% above industry average
Classification:
MMSI, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.91
Statistical test of Returns:
MMSI has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.74%
Weekly Volatility:
6.13%
Monthly Volatility:
12.26%
Yearly Volatility:
42.46%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.30%
Volatility in last five trading days has been -52.50% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.50%
Weekly VaR:
-12.29%
Monthly VaR:
-24.58%
How Much Can the price of
MMSI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-85.14%
This translates to price declining to:
$45.96
This translates to price declining to:
$8.56
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
MMSI is a 73.48% riskier investment compared to the market/S&P 500 & is 48.62% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -5.59% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MMSI
Beta in relation to market/S&P 500--1.00
Expected beta in 1 year's time:
0.752
Expected beta in 3 year's time:
1.063
Unlevered (debt free) Beta:
0.797
Beta in relation to Nasdaq (XNAS):
0.689
Beta in relation to all global stocks::
0.891
Beta Comparison & Analysis
Beta of competitors/peers::
0.885
Beta is 12.56% higher than peers
Average Industry Beta:
0.989
Beta is 0.66% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
4.39%
Sustainable growth rate is -70.15% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.219
Alpha is 360.89% above industry average alpha yield
Alpha is 1395% higher than market/& is unsustainably high
Analysis of Cost of Capital of
MMSI
Equity cost of capital:
0.100
Equity cost of capital is 0.45% above industry mean WACC
Unlevered (without debt) cost of capital:
7.98%
Before-tax cost of debt:
1.46%
After-tax cost of debt:
1.16%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.16%
WACC is -5.73% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$19.40
Revenue growth rate per share of (3Y):
3.09
Annual revenue growth rate is -74.46% below industry average
EPS:
$0.83
Expected Annual growth rate of EPS (3Y):
103.28%
Expected future EPS growth rate is 793.09% higher than the Medical Instruments & Supplies industry
Free cash flow (FCF) per share:
$1.62
-
-
Debt per share
$5.35
EBITDA per share
$2.72
Valuation Analysis Today of
MMSI
P/E Ratio:
56.77
P/E Ratio of Competitors/Peers:
82.24
P/E ratio is -30.97% lower than main peers & is 13.79% higher than the industry
Stock price/value with industry average P/E ratio: $41.41
MMSI is 39.10% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.97
Price to sales ratio is -59.96% below the industry mean
P/B (Price to book value ratio):
3.09
Price to free cash flow: 35.47
Price to free cash flow ratio is -52.88% lower than the industry
Net income growth rate (3Y):
7.06%
Net income growth rate is -106.68% 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:
28.72%
Net debt to equity ratio:
25.49%
Debt to assets ratio:
18.62%
Net debt to assets ratio:
16.52%
Debt-to-asset ratio is -48.12% below industry average
Ability to repay debt:
Interest coverage ratio:
32.69
Interest coverage ratio is -53.92% less than industry average
Looking forward:
Debt growth rate:
-10.30%
Annual debt growth is -109% lower than industry average debt growth rate
Debt repayment rate in last quarter: 18.94%
Analysis of Key Statistics
Correlation of price movement with the market:
0.5
Statistical significance of correlation:
MMSI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.505
Stock price is -1.06% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.505
Correlation of price movement with Nasdaq (^IXIC):
-0.042
Covariance of price movement with the market:
-0.068
Kurtosis
11.844
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:
-0.179
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
MMSI
Gross Profit Margin Ratio:
180%
Operating Profit Margin Ratio:
5.63%
Operating profit margin is -57.97% lower than the industry
Net Profit Margin Ratio:
180%
Effective Tax Rate:
13.27%
Effective tax rate is -59.61% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
4.55%
Return on equity (ROE) is -109.97% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.95%
Return on assets (ROA) is -58.84% lower than the industry
Financial Leverage:
1.2x
Current Ratio:
2.35
Current ratio is -35.76% below industry average
Cash Conversion Cycle (days):
91.6
Cash conversion cycle is 73.82% above industry average
The remaining useful life of property plant & equipment is: 5.7 years
Stock based compensation to net income ratio:
9.66%
In-depth Efficiency Analysis
Revenue generated per employee:
170.8K
Each employee generates -52% less revenue than industry average revenue per employee
EBITDA generated per employee:
24.0K
Each employee generates -78% less EBITDA than industry average revenue per employee
Profit generated per employee:
7.5K
Each employee generates -90% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.3K
Each employee generates -106% less free cash flow than industry average revenue per employee
Assets/Capital per employee
178.7K
Each employee generates -106% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 23.83%
Growth rate in R&D investment/expenditure is 9102.78% higher than the industry
Competitors/Peer firms of
MMSI
APOLLO MEDICAL HOLDINGS, INC. (XNAS:AMEH)
ABCELLERA BIOLOGICS INC. (XNAS:ABCL)
Newegg Commerce, Inc. (XNAS:NEGG)
ADAPTIVE BIOTECHNOLOGIES CORPORATION (XNAS:ADPT)
Galapagos NV (XNAS:GLPG)
NEOGENOMICS, INC. (XNAS:NEO)
Lifestance Health Group Inc (XNAS:LFST)
AMICUS THERAPEUTICS, INC. (XNAS:FOLD)
I-MAB (XNAS:IMAB)
Current Analyst Ratings
Strong buy�17%
Buy�17%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.10B
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:
606.91M
494.35M
72.36M
-
338.68M
-
-
411.04M
401.00K
4.73M
94.36M
154.48M
61.96M
48.04M
55.39M
7.35M
48.04M
Statement of Cash Flow
Date:
Period:
23.05M
Differed Income Tax :
-
Stock Based Compensation :
4.64M
Change in Working Capital :
- 30717.00K
Accounts Receivables:
- 3851.00K
Other Working Capital:
- 1307.00K
Other Non-Cash Items:
4.49M
Net Cash Provided by Operating Activities:
12.01M
Investments in PP&E:
-
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):
3/31/22
2022
Q1
53.88M
-
53.88M
169.41M
231.45M
23.36M
478.09M
436.57M
361.46M
305.74M
-
6.18M
41.71M
1.15B
-
1.63B
58.10M
19.68M
3.66M
-
126.05M
203.83M
303.48M
32.63M
369.39M
-
573.22M
646.37M
416.80M
- 6653.0K
-
March 31, 2022 at 6:00:00 AM
1.02B
1.06B
1.63B
-
323.16M
269.3M
-
- 9868.00K
- 9868.00K
- 70899.00K
1.64M
-
-
55.02M
- 14240.00K
111.00K
- 11987.00K
55.76M
67.75M
12.01M
- 9868.00K
2.14M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
MMSI
2023
2024
2025
2026
2027
$61.76
$103.54
$110.46
$117.86
$125.74