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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Smart Global Holdings, Inc. (XNAS:SGH) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SGH
Name:
SMART GLOBAL HOLDINGS, INC. (XNAS:SGH)
Sector:
2.38M
Industry:
Semiconductors
CEO:
Mr. Ajay Shah
Total Employees:
3,900
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -123.09% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SMART GLOBAL HOLDINGS, INC.(SGH) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SEMICONDUCTORS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
17.32
One Month Price Target:
$17.45
Six Month Price Target :
$18.12
Likely Price in One Year's Time:
Ticker:
$18.91
Likely Trading Range Today Under (Normal Volatility)
$17.22
Price Upper limit ($) :
$17.45
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$15.99
This week:
$14.34
This month :
$11.35
Other Primary facts
Market Cap:
870.35M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
49.99M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
25.48%
-19.28%
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:
$23.51
$20.66
$11.13
$13.98
Medium risk (<10%) entry points
Buy Call
Sell Call
$19.73
Buy Put:
Sell Put:
$19.13
$14.90
$15.51
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SGH
Sharpe Ratio:
2.15%
Comparison:
SGH, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -30.48% lower than the industry
& is -5.55% lower than the market/S&P 500 average
Average Returns/Yield of
SGH
Daily returns:
0.09%
Weekly returns:
0.45%
Monthly returns:
1.81%
Yearly returns:
31.95%
Comparison of returns:
Average annual returns/yield (last 3 years) is -31.96% below industry average
Classification:
SGH, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.77
Statistical test of Returns:
SGH has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.80%
Weekly Volatility:
8.49%
Monthly Volatility:
16.97%
Yearly Volatility:
58.80%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.77%
Volatility in last five trading days has been -53.41% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.70%
Weekly VaR:
-17.23%
Monthly VaR:
-34.46%
How Much Can the price of
SGH
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-29%
Worst case (decline):
>85%
This translates to price declining to:
$12.22
This translates to price declining to:
$2.60
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
SGH is a 143.20% riskier investment compared to the market/S&P 500 & is 108.35% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 6.95% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SGH
Beta in relation to market/S&P 500--1.37
Expected beta in 1 year's time:
1.05
Expected beta in 3 year's time:
1.485
Unlevered (debt free) Beta:
0.75
Beta in relation to Nasdaq (XNAS):
1.306
Beta in relation to all global stocks::
1.009
Beta Comparison & Analysis
Beta of competitors/peers::
1.129
Beta is 21.13% higher than peers
Average Industry Beta:
1.41
Beta is -3.05% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
13.54%
Sustainable growth rate is -51.03% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.092
Alpha is -51.82% below industry average alpha yield
Alpha is 587% higher than market/& is unsustainably high
Analysis of Cost of Capital of
SGH
Equity cost of capital:
0.125
Equity cost of capital is -2.30% below industry mean WACC
Unlevered (without debt) cost of capital:
6.87%
Before-tax cost of debt:
4.85%
After-tax cost of debt:
3.83%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.83%
WACC is -5.39% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$36.99
Revenue growth rate per share of (3Y):
2.61
Annual revenue growth rate is -80.36% below industry average
EPS:
$1.62
Expected Annual growth rate of EPS (3Y):
-2.75%
Expected future EPS growth rate is -105.28% lower than the Semiconductors industry
Free cash flow (FCF) per share:
$1.92
-
-
Debt per share
$7.41
EBITDA per share
$3.80
Valuation Analysis Today of
SGH
P/E Ratio:
13.82
P/E Ratio of Competitors/Peers:
160.83
P/E ratio is -91.41% lower than main peers & is -66.68% lower than the industry
Stock price/value with industry average P/E ratio: $67.19
SGH is -74.22% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.47
Price to sales ratio is -94.24% below the industry mean
P/B (Price to book value ratio):
2.61
Price to free cash flow: 9.03
Price to free cash flow ratio is -74.02% lower than the industry
Net income growth rate (3Y):
-83.80%
Net income growth rate is 46.29% 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:
114.74%
Net debt to equity ratio:
53.66%
Debt to assets ratio:
27.99%
Net debt to assets ratio:
13.09%
Debt-to-asset ratio is -28.19% below industry average
Ability to repay debt:
Interest coverage ratio:
9.64
Interest coverage ratio is -70.58% less than industry average
Looking forward:
Debt growth rate:
79.63%
Annual debt growth is -13% lower than industry average debt growth rate
Debt repayment rate in last quarter: 11.89%
Analysis of Key Statistics
Correlation of price movement with the market:
0.618
Statistical significance of correlation:
SGH has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.627
Stock price is -1.48% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.627
Correlation of price movement with Nasdaq (^IXIC):
0.014
Covariance of price movement with the market:
0.031
Kurtosis
6.891
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:
0.248
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
SGH
Gross Profit Margin Ratio:
101%
Operating Profit Margin Ratio:
6.42%
Operating profit margin is -72.73% lower than the industry
Net Profit Margin Ratio:
101%
Effective Tax Rate:
28.35%
Effective tax rate is 87.84% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
20.82%
Return on equity (ROE) is -27.18% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.08%
Return on assets (ROA) is -61.41% lower than the industry
Financial Leverage:
1.4x
Current Ratio:
1.76
Current ratio is -56.57% below industry average
Cash Conversion Cycle (days):
-8
Cash conversion cycle is -114.45% below industry average
The remaining useful life of property plant & equipment is: 7.7 years
Stock based compensation to net income ratio:
14.54%
In-depth Efficiency Analysis
Revenue generated per employee:
474.2K
Each employee generates -23% less revenue than industry average revenue per employee
EBITDA generated per employee:
48.7K
Each employee generates -79% less EBITDA than industry average revenue per employee
Profit generated per employee:
17.2K
Each employee generates -89% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.6K
Each employee generates -98% less free cash flow than industry average revenue per employee
Assets/Capital per employee
97.4K
Each employee generates -98% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- -5.34%
Growth rate in R&D investment/expenditure is -137.74% lower than the industry
Competitors/Peer firms of
SGH
MESA LABORATORIES, INC. (XNAS:MLAB)
ACM RESEARCH, INC. (XNAS:ACMR)
ALKAMI TECHNOLOGY, INC. (XNAS:ALKT)
TTM TECHNOLOGIES, INC. (XNAS:TTMI)
STRATASYS LTD (XNAS:SSYS)
OSI SYSTEMS, INC. (XNAS:OSIS)
NAVITAS SEMICONDUCTOR CORPORATION (XNAS:NVTS)
REPAY HOLDINGS CORPORATION (XNAS:RPAY)
RADWARE LTD. (XNAS:RDWR)
Current Analyst Ratings
Strong buy�13%
Buy�13%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
5/27/22
Revenue:
1.85B
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:
1.38B
467.17M
73.49M
-
215.66M
-
2.18M
291.32M
-
19.71M
75.65M
190.08M
118.65M
67.25M
96.93M
27.48M
67.25M
Statement of Cash Flow
Date:
Period:
18.36M
Differed Income Tax :
209.00K
Stock Based Compensation :
9.78M
Change in Working Capital :
- 53028.00K
Accounts Receivables:
- 36053.00K
Other Working Capital:
209.00K
Other Non-Cash Items:
19.80M
Net Cash Provided by Operating Activities:
15.15M
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):
11/26/21
2022
Q1
233.05M
-
233.05M
344.11M
317.85M
48.83M
943.84M
186.62M
72.49M
95.33M
-
-
25.42M
379.86M
-
1.32B
373.46M
35.80M
19.30M
-
125.86M
535.12M
370.55M
85.75M
456.30M
-
991.41M
784.00K
204.81M
- 241055.0K
359.18M
November 26, 2021 at 12:00:00 AM
1.67B
322.94M
1.31B
-
406.35M
173.3M
-
- 13377.00K
- 13377.00K
- 50000.00K
5.03M
- 2666.00K
-
60.00M
12.36M
- 4068.00K
10.06M
233.05M
222.99M
15.15M
- 12766.00K
2.38M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
SGH
2023
2024
2025
2026
2027
$19.00
$88.01
$96.10
$104.93
$114.57