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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Purple Innovation, Inc. (XNAS:PRPL) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PRPL
Name:
PURPLE INNOVATION, INC. (XNAS:PRPL)
Sector:
- 57359.00K
Industry:
Furnishings, Fixtures & Appliances
CEO:
Mr. Joseph Megibow
Total Employees:
1,800
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -108.00% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PURPLE INNOVATION, INC.(PRPL) 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 ($) :
3.11
One Month Price Target:
$3.14
Six Month Price Target :
$3.31
Likely Price in One Year's Time:
Ticker:
$3.51
Likely Trading Range Today Under (Normal Volatility)
$3.08
Price Upper limit ($) :
$3.14
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$2.76
This week:
$2.33
This month :
$1.56
Other Primary facts
Market Cap:
221.34M
Market Cap Classification:
Micro Cap
Number of Shares
IPO Date:
83.21M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
27.94%
-32.59%
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:
$4.72
$3.99
$1.50
$2.23
Medium risk (<10%) entry points
Buy Call
Sell Call
$3.75
Buy Put:
Sell Put:
$3.59
$2.47
$2.63
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PRPL
Sharpe Ratio:
0.11%
Comparison:
PRPL, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -90.12% lower than the industry
& is -95.18% lower than the market/S&P 500 average
Average Returns/Yield of
PRPL
Daily returns:
0.01%
Weekly returns:
0.07%
Monthly returns:
0.30%
Yearly returns:
14.35%
Comparison of returns:
Average annual returns/yield (last 3 years) is -75.21% below industry average
Classification:
PRPL, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.78
Statistical test of Returns:
PRPL has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
5.44%
Weekly Volatility:
12.16%
Monthly Volatility:
24.31%
Yearly Volatility:
84.22%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
12.87%
Volatility in last five trading days has been 136.71% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-11.15%
Weekly VaR:
-24.93%
Monthly VaR:
-49.87%
How Much Can the price of
PRPL
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-44%
Worst case (decline):
>85%
This translates to price declining to:
$1.74
This translates to price declining to:
$0.47
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
PRPL is a 251.95% riskier investment compared to the market/S&P 500 & is 201.51% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 37.67% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PRPL
Beta in relation to market/S&P 500--1.90
Expected beta in 1 year's time:
1.246
Expected beta in 3 year's time:
1.762
Unlevered (debt free) Beta:
1.313
Beta in relation to Nasdaq (XNAS):
1.399
Beta in relation to all global stocks::
0.74
Beta Comparison & Analysis
Beta of competitors/peers::
1.589
Beta is 19.82% higher than peers
Average Industry Beta:
1.707
Beta is 11.52% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
14.68%
Sustainable growth rate is -56.13% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.126
Alpha is 2463.57% above industry average alpha yield
Alpha is -804% below the market average
Analysis of Cost of Capital of
PRPL
Equity cost of capital:
0.162
Equity cost of capital is 9.08% above industry mean WACC
Unlevered (without debt) cost of capital:
11.17%
Before-tax cost of debt:
1.72%
After-tax cost of debt:
1.36%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.36%
WACC is 45.55% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$8.21
Revenue growth rate per share of (3Y):
1.14
Annual revenue growth rate is -237.76% below industry average
EPS:
-$0.45
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
-
-
-
Debt per share
$1.52
EBITDA per share
-$0.29
Valuation Analysis Today of
PRPL
P/E Ratio:
-
P/E Ratio of Competitors/Peers:
22.45
-
-
PRPL is -142.73% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.38
Price to sales ratio is -58.66% below the industry mean
P/B (Price to book value ratio):
1.14
-
-
Net income growth rate (3Y):
-111.91%
Net income growth rate is 48.13% higher than the average industry 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:
56.20%
Net debt to equity ratio:
32.29%
Debt to assets ratio:
19.77%
Net debt to assets ratio:
11.36%
Debt-to-asset ratio is -73.38% below industry average
Ability to repay debt:
Interest coverage ratio:
-10.22
Interest coverage ratio is -111.27% less than industry average
Looking forward:
Debt growth rate:
325.26%
Annual debt growth is 40% higher than industry average debt growth rate
Debt repayment rate in last quarter: 31.22%
Analysis of Key Statistics
Correlation of price movement with the market:
0.428
Statistical significance of correlation:
PRPL has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.556
Stock price is -23.04% less 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):
-0.088
Covariance of price movement with the market:
-0.279
Kurtosis
5.091
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:
-0.005
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
PRPL
Gross Profit Margin Ratio:
151%
Operating Profit Margin Ratio:
-8.58%
Operating profit margin is -216.04% lower than the industry
Net Profit Margin Ratio:
151%
Effective Tax Rate:
20.01%
Effective tax rate is 8.38% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-13.43%
Return on equity (ROE) is -145.81% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-4.73%
Return on assets (ROA) is -152.75% lower than the industry
Financial Leverage:
1.2x
Current Ratio:
1.89
Current ratio is 21.43% above industry average
Cash Conversion Cycle (days):
-34.1
Cash conversion cycle is -160.82% below industry average
The remaining useful life of property plant & equipment is: 0.7 years
Stock based compensation to net income ratio:
-1.79%
In-depth Efficiency Analysis
Revenue generated per employee:
379.4K
Each employee generates -13% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 13.3K
Each employee generates -135% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 16.8K
Each employee generates -180% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 31.9K
Each employee generates 141% more free cash flow than industry average revenue per employee
Assets/Capital per employee
239.3K
Each employee generates 141% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 16.52%
Growth rate in R&D investment/expenditure is -1049.74% lower than the industry
Competitors/Peer firms of
PRPL
THE REALREAL, INC. (XNAS:REAL)
CAVCO INDUSTRIES, INC. (XNAS:CVCO)
DAVE & BUSTER'S ENTERTAINMENT, INC. (XNAS:PLAY)
1-800-FLOWERS.COM, INC. (XNAS:FLWS)
CANOO INC.. (XNAS:GOEV)
AMERICAN WOODMARK CORPORATION (XNAS:AMWD)
MALIBU BOATS, INC. (XNAS:MBUU)
XPEL, INC. (XNAS:XPEL)
THE HONEST COMPANY, INC. (XNAS:HNST)
Current Analyst Ratings
Strong buy�4%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
682.98M
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:
423.90M
259.08M
7.36M
75.46M
310.34M
234.88M
- 3842.00K
313.86M
-
2.34M
11.77M
- 23873.00K
- 58621.00K
- 30295.00K
- 38378.00K
- 7679.00K
- 30295.00K
Statement of Cash Flow
Date:
Period:
3.84M
Differed Income Tax :
- 1912.00K
Stock Based Compensation :
542.00K
Change in Working Capital :
- 31195.00K
Accounts Receivables:
- 3576.00K
Other Working Capital:
- 3236.00K
Other Non-Cash Items:
- 1927.00K
Net Cash Provided by Operating Activities:
- 44281.00K
Investments in PP&E:
- 12631.00K
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
62.70M
-
62.70M
29.01M
105.83M
12.75M
210.28M
195.52M
-
-
-
219.70M
1.26M
430.67M
-
640.95M
62.88M
8.77M
3.56M
4.86M
34.86M
111.38M
126.75M
176.54M
303.29M
-
414.66M
8.00K
- 275327.00K
-
-
March 31, 2022 at 6:00:00 AM
737.76M
225.51M
640.17M
-
135.52M
72.8M
-
- 447.00K
- 13078.00K
- 57531.00K
93.13M
-
-
- 7153.00K
28.44M
-
- 28918.00K
62.70M
91.62M
- 44281.00K
- 13078.00K
- 57359.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
PRPL
2023
2024
2025
2026
2027
$3.53
$0.86
$0.97
$1.10
$1.24