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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Mohawk Industries, Inc. (XNYS:MHK) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MHK
Name:
MOHAWK INDUSTRIES, INC. (XNYS:MHK)
Sector:
- 74516.00K
Industry:
Furnishings, Fixtures & Appliances
CEO:
Mr. Jeffrey Lorberbaum
Total Employees:
43,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -187.78% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MOHAWK INDUSTRIES, INC.(MHK) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND FURNISHINGS, FIXTURES & APPLIANCES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
108.85
One Month Price Target:
$109.63
Six Month Price Target :
$113.53
Likely Price in One Year's Time:
Ticker:
$118.21
Likely Trading Range Today Under (Normal Volatility)
$108.25
Price Upper limit ($) :
$109.51
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$101.22
This week:
$91.79
This month :
$74.74
Other Primary facts
Market Cap:
6.74B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
63.53M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
22.04%
-24.25%
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:
$144.26
$128.10
$73.44
$89.60
Medium risk (<10%) entry points
Buy Call
Sell Call
$122.84
Buy Put:
Sell Put:
$119.39
$94.82
$98.31
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MHK
Sharpe Ratio:
0.50%
Comparison:
MHK, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -54.86% lower than the industry
& is -77.98% lower than the market/S&P 500 average
Average Returns/Yield of
MHK
Daily returns:
0.03%
Weekly returns:
0.13%
Monthly returns:
0.52%
Yearly returns:
14.35%
Comparison of returns:
Average annual returns/yield (last 3 years) is -56.45% below industry average
Classification:
MHK, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.26
Statistical test of Returns:
MHK has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.42%
Weekly Volatility:
7.66%
Monthly Volatility:
15.32%
Yearly Volatility:
53.06%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.41%
Volatility in last five trading days has been -58.89% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.01%
Weekly VaR:
-15.67%
Monthly VaR:
-31.34%
How Much Can the price of
MHK
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-27%
Worst case (decline):
>85%
This translates to price declining to:
$79.00
This translates to price declining to:
$16.33
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
MHK is a 121.18% riskier investment compared to the market/S&P 500 & is 89.49% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -13.28% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MHK
Beta in relation to market/S&P 500--1.28
Expected beta in 1 year's time:
0.836
Expected beta in 3 year's time:
1.182
Unlevered (debt free) Beta:
1.128
Beta in relation to Nasdaq (XNAS):
0.887
Beta in relation to all global stocks::
0.868
Beta Comparison & Analysis
Beta of competitors/peers::
1.492
Beta is -14.26% lower than peers
Average Industry Beta:
1.707
Beta is -25.07% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
12.00%
Sustainable growth rate is -64.12% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.057
Alpha is 1049.03% above industry average alpha yield
Alpha is -360% below the market average
Analysis of Cost of Capital of
MHK
Equity cost of capital:
0.119
Equity cost of capital is -19.75% below industry mean WACC
Unlevered (without debt) cost of capital:
10.50%
Before-tax cost of debt:
1.76%
After-tax cost of debt:
1.39%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.39%
WACC is 8.08% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$181.75
Revenue growth rate per share of (3Y):
0.83
Annual revenue growth rate is -55.54% below industry average
EPS:
$15.33
Expected Annual growth rate of EPS (3Y):
13.05%
Expected future EPS growth rate is 7.36% higher than the Furnishings, Fixtures & Appliances industry
Free cash flow (FCF) per share:
$5.92
-
-
Debt per share
$21.75
EBITDA per share
$28.11
Valuation Analysis Today of
MHK
P/E Ratio:
7.3
P/E Ratio of Competitors/Peers:
20.87
P/E ratio is -65.01% lower than main peers & is -54.85% lower than the industry
Stock price/value with industry average P/E ratio: $247.92
MHK is -56.10% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.6
Price to sales ratio is -34.65% below the industry mean
P/B (Price to book value ratio):
0.83
Price to free cash flow: 18.38
-
Net income growth rate (3Y):
30.17%
Net income growth rate is -139.93% 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:
16.67%
Net debt to equity ratio:
33.81%
Debt to assets ratio:
9.60%
Net debt to assets ratio:
19.48%
Debt-to-asset ratio is -87.07% below industry average
Ability to repay debt:
Interest coverage ratio:
33.39
Interest coverage ratio is -63.20% less than industry average
Looking forward:
Debt growth rate:
-11.10%
Annual debt growth is -105% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.578
Statistical significance of correlation:
MHK has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.556
Stock price is 3.91% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.556
Correlation of price movement with Nasdaq (^IXIC):
0.006
Covariance of price movement with the market:
0.012
Kurtosis
9.507
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:
-0.141
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
MHK
Gross Profit Margin Ratio:
114%
Operating Profit Margin Ratio:
11.59%
Operating profit margin is 56.69% higher than the industry
Net Profit Margin Ratio:
114%
Effective Tax Rate:
19.36%
Effective tax rate is 4.86% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
12.57%
Return on equity (ROE) is -57.14% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.24%
Return on assets (ROA) is -19.19% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
1.44
Current ratio is -7.56% below industry average
Cash Conversion Cycle (days):
87.1
Cash conversion cycle is 55.25% above industry average
The remaining useful life of property plant & equipment is: 7.5 years
Stock based compensation to net income ratio:
0.54%
In-depth Efficiency Analysis
Revenue generated per employee:
268.5K
Each employee generates -39% less revenue than industry average revenue per employee
EBITDA generated per employee:
41.5K
Each employee generates 10% more EBITDA than industry average revenue per employee
Profit generated per employee:
24.2K
Each employee generates 15% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 1.7K
Each employee generates -87% less free cash flow than industry average revenue per employee
Assets/Capital per employee
205.2K
Each employee generates -87% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
MHK
FLOOR & DECOR HOLDINGS, INC. (XNYS:FND)
BORGWARNER INC. (XNYS:BWA)
WESTROCK COMPANY (XNYS:WRK)
INTERCONTINENTAL HOTELS GROUP PLC (XNYS:IHG)
LEAR CORPORATION (XNYS:LEA)
WILLIAMS-SONOMA, INC. (XNYS:WSM)
SERVICE CORPORATION INTERNATIONAL (XNYS:SCI)
FARFETCH LIMITED (XNYS:FTCH)
TAPESTRY, INC. (XNYS:TPR)
Current Analyst Ratings
Strong buy�29%
Buy�42%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/2/22
Revenue:
11.55B
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:
8.27B
3.28B
-
-
1.94B
-
-
1.94B
-
53.49M
440.50M
1.79B
1.34B
1.04B
1.29B
250.20M
1.04B
Statement of Cash Flow
Date:
Period:
148.47M
Differed Income Tax :
13.99M
Stock Based Compensation :
5.66M
Change in Working Capital :
- 598896.00K
Accounts Receivables:
-
Other Working Capital:
1.69B
Other Non-Cash Items:
240.41M
Net Cash Provided by Operating Activities:
54.95M
Investments in PP&E:
- 129470.00K
Net Acquisitions:
951.00K
Purchases of Investments:
- 933000.00K
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):
4/2/22
2022
Q1
230.56M
310.00M
540.56M
2.04B
2.51B
466.24M
5.56B
4.94B
2.58B
883.53M
-
421.72M
-
8.82B
-
14.39B
-
1.65B
-
-
2.22B
3.87B
1.38B
-
2.23B
-
6.10B
-
-
- 1048599.0K
-
April 2, 2022 at 6:00:00 AM
10.21B
8.29B
14.39B
-
3.03B
2.8B
-
946.00M
- 115519.00K
-
-
- 306577.00K
-
315.53M
8.96M
13.27M
- 38336.00K
230.56M
268.90M
54.95M
- 129470.00K
- 74516.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
MHK
2023
2024
2025
2026
2027
$118.80
$212.77
$231.06
$250.92
$272.49