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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Pacwest Bancorp (XNAS:PACW) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PACW
Name:
PACWEST BANCORP (XNAS:PACW)
Sector:
126.92M
Industry:
Banks�Regional
CEO:
Mr. Matthew Wagner
Total Employees:
2,200
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 89.16% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PACWEST BANCORP(PACW) 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 ($) :
25.88
One Month Price Target:
$26.08
Six Month Price Target :
$27.09
Likely Price in One Year's Time:
Ticker:
$28.3
Likely Trading Range Today Under (Normal Volatility)
$25.72
Price Upper limit ($) :
$26.04
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$23.96
This week:
$21.6
This month :
$17.31
Other Primary facts
Market Cap:
3.05B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
117.77M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
25.37%
-19.54%
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:
$34.78
$30.73
$16.98
$21.03
Medium risk (<10%) entry points
Buy Call
Sell Call
$29.41
Buy Put:
Sell Put:
$28.54
$22.34
$23.22
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PACW
Sharpe Ratio:
0.07%
Comparison:
PACW, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -94.05% lower than the industry
& is -96.79% lower than the market/S&P 500 average
Average Returns/Yield of
PACW
Daily returns:
0.01%
Weekly returns:
0.06%
Monthly returns:
0.23%
Yearly returns:
10.91%
Comparison of returns:
Average annual returns/yield (last 3 years) is -74.73% below industry average
Classification:
PACW, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.56
Statistical test of Returns:
PACW has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.61%
Weekly Volatility:
8.07%
Monthly Volatility:
16.15%
Yearly Volatility:
55.93%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.33%
Volatility in last five trading days has been -90.86% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.40%
Weekly VaR:
-16.55%
Monthly VaR:
-33.11%
How Much Can the price of
PACW
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-29%
Worst case (decline):
>85%
This translates to price declining to:
$18.34
This translates to price declining to:
$3.88
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
PACW is a 133.67% riskier investment compared to the market/S&P 500 & is 100.19% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 26.38% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PACW
Beta in relation to market/S&P 500--1.39
Expected beta in 1 year's time:
1.014
Expected beta in 3 year's time:
1.434
Unlevered (debt free) Beta:
1.135
Beta in relation to Nasdaq (XNAS):
0.944
Beta in relation to all global stocks::
0.989
Beta Comparison & Analysis
Beta of competitors/peers::
1.096
Beta is 26.88% higher than peers
Average Industry Beta:
0.964
Beta is 44.34% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
11.94%
Sustainable growth rate is 30.83% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.099
Alpha is -955.07% below industry average alpha yield
Alpha is -632% below the market average
Analysis of Cost of Capital of
PACW
Equity cost of capital:
0.127
Equity cost of capital is 30.01% above industry mean WACC
Unlevered (without debt) cost of capital:
10.35%
Before-tax cost of debt:
3.07%
After-tax cost of debt:
2.43%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.43%
WACC is 6.13% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$10.82
Revenue growth rate per share of (3Y):
0.83
Annual revenue growth rate is -57.05% below industry average
EPS:
$4.83
Expected Annual growth rate of EPS (3Y):
9.35%
Expected future EPS growth rate is -22.19% lower than the Banks�Regional industry
Free cash flow (FCF) per share:
$3.68
Balance sheet equity growth per share: -56.30%
Equity growth rate per share is -245.39% lower than the industry
Debt per share
$9.46
EBITDA per share
$7.93
Valuation Analysis Today of
PACW
P/E Ratio:
5.77
P/E Ratio of Competitors/Peers:
11.6
P/E ratio is -50.25% lower than main peers & is -53.49% lower than the industry
Stock price/value with industry average P/E ratio: $59.93
PACW is -56.82% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $13.88
Present value of the expected future dividends only: $5.09
P/S (Price to Sales ratio):
2.39
Price to sales ratio is -44.05% below the industry mean
P/B (Price to book value ratio):
0.83
Price to free cash flow: 7.04
Price to free cash flow ratio is -51.73% lower than the industry
Net income growth rate (3Y):
37.53%
Net income growth rate is -31.86% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 5.17%
Dividend yeild: 3.86%
Previous Dividend: $0.25
Previous adjusted dividend: $0.25
Previous Dividend: $1.00
Expected next dividend best case: $0.37
Expected next dividend worst case: $0.13
Average dividend payment (long-term): $0.31
Average dividend increase/decrease (growth rate) % per period: -5.83%
Expected next dividend payment date: 29/08/2022
Expected next dividend record date: 15/08/2022
Expected next dividend declaration date: 08/01/2022
Previous dividend payment date: 31/05/2022
Previous dividend record date: 16/05/2022
Previous dividend declaration date: 05/02/2022
Dividend History:
2022-05-13--$0.25
2021-11-12--$0.25
2021-05-14--$0.25
2022-02-14--$0.25
2021-08-16--$0.25
2021-02-26--$0.25
Dividend growth rate is -124.75% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
30.51%
Net debt to equity ratio:
-5.91%
Debt to assets ratio:
2.84%
Net debt to assets ratio:
-0.55%
Debt-to-asset ratio is -98.30% below industry average
Ability to repay debt:
Interest coverage ratio:
16.38
Interest coverage ratio is 1876.12% more than industry average
Looking forward:
Debt growth rate:
83.36%
Annual debt growth is 26222% higher 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:
0.624
Statistical significance of correlation:
PACW has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.501
Stock price is 24.56% 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):
0.047
Covariance of price movement with the market:
0.099
Kurtosis
6.695
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:
0.412
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
PACW
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
-
Effective Tax Rate:
26.11%
Effective tax rate is 21.18% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
15.80%
Return on equity (ROE) is 32.42% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.47%
Return on assets (ROA) is -36.25% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 9.7 years
Stock based compensation to net income ratio:
1.31%
In-depth Efficiency Analysis
Revenue generated per employee:
579.0K
Each employee generates 53% more revenue than industry average revenue per employee
EBITDA generated per employee:
424.5K
Each employee generates 88% more EBITDA than industry average revenue per employee
Profit generated per employee:
262.1K
Each employee generates 85% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
57.7K
Each employee generates -31% less free cash flow than industry average revenue per employee
Assets/Capital per employee
5.6M
Each employee generates -31% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
PACW
SLM CORPORATION (XNAS:SLM)
VALLEY NATIONAL BANCORP (XNAS:VLY)
KL ACQUISITION UNT (XNAS:KLAQU)
WINTRUST FINANCIAL CORPORATION (XNAS:WTFC)
SOUTHSTATE CORPORATION (XNAS:SSB)
ACE CONVERGENCE ACQUISITION UNT (XNAS:ACEVU)
Bank Ozk (XNAS:OZK)
GLACIER BANCORP, INC. (XNYS:GBCI)
HUDSON EXECUTIVE INVESTMENT UNT (XNAS:HIIIU)
Current Analyst Ratings
Strong buy�13%
Buy�17%
Hold�25%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.27B
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:
-
-
-
431.71M
431.71M
-
-
-
1.21B
57.02M
96.45M
933.96M
-
576.68M
780.48M
203.80M
576.68M
Statement of Cash Flow
Date:
Period:
24.67M
Differed Income Tax :
-
Stock Based Compensation :
7.56M
Change in Working Capital :
- 29235.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
11.09M
Net Cash Provided by Operating Activities:
134.21M
Investments in PP&E:
- 7287.00K
Net Acquisitions:
-
Purchases of Investments:
- 356196.00K
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
2.07B
9.98B
12.05B
280.89M
-
-
-
506.58M
1.41B
41.31M
10.40B
-
-
12.35B
51.60B
39.25B
519.27M
741.00M
-
-
-
1.26B
1.11B
-
1.11B
35.45B
35.60B
1.22M
1.14B
- 376475.0K
2.89B
March 31, 2022 at 6:00:00 AM
-
3.65B
39.25B
20.37B
1.85B
- 215801.0K
450.11M
- 1391250.00K
- 1304620.00K
-
-
- 4481.00K
- 29796.00K
- 781862.00K
- 816139.00K
-
- 1986553.00K
2.07B
4.06B
134.21M
- 7287.00K
126.92M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
PACW
2023
2024
2025
2026
2027
$28.44
$44.42
$48.58
$53.12
$58.08