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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Solarwinds Corp (XNYS:SWI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SWI
Name:
SolarWinds Corp (XNYS:SWI)
Sector:
35.96M
Industry:
Software�Infrastructure
CEO:
Mr. Kevin Thompson
Total Employees:
2,215
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -105.33% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SOLARWINDS CORP(SWI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�INFRASTRUCTURE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
8.76
One Month Price Target:
$8.81
Six Month Price Target :
$9.03
Likely Price in One Year's Time:
Ticker:
$9.31
Likely Trading Range Today Under (Normal Volatility)
$8.7
Price Upper limit ($) :
$8.8
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$8.15
This week:
$7.39
This month :
$6.02
Other Primary facts
Market Cap:
1.37B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
160.91M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.8%
-39.72%
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:
$11.61
$10.35
$5.91
$7.17
Medium risk (<10%) entry points
Buy Call
Sell Call
$9.93
Buy Put:
Sell Put:
$9.66
$7.58
$7.86
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SWI
Sharpe Ratio:
-4.68%
Comparison:
SWI, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -386.07% lower than the industry
& is -305.20% lower than the market/S&P 500 average
Average Returns/Yield of
SWI
Daily returns:
-0.15%
Weekly returns:
-0.74%
Monthly returns:
-2.95%
Yearly returns:
14.38%
Comparison of returns:
Average annual returns/yield (last 3 years) is -345.88% below industry average
Classification:
SWI, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.19
Statistical test of Returns:
SWI has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.34%
Weekly Volatility:
7.47%
Monthly Volatility:
14.94%
Yearly Volatility:
51.74%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.16%
Volatility in last five trading days has been -35.37% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.01%
Weekly VaR:
-15.67%
Monthly VaR:
-31.33%
How Much Can the price of
SWI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-29%
Worst case (decline):
>85%
This translates to price declining to:
$6.18
This translates to price declining to:
$1.31
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
SWI is a 121.15% riskier investment compared to the market/S&P 500 & is 89.46% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 0.24% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SWI
Beta in relation to market/S&P 500--0.93
Expected beta in 1 year's time:
0.864
Expected beta in 3 year's time:
1.222
Unlevered (debt free) Beta:
0.626
Beta in relation to Nasdaq (XNAS):
0.837
Beta in relation to all global stocks::
0.75
Beta Comparison & Analysis
Beta of competitors/peers::
1.149
Beta is -18.77% lower than peers
Average Industry Beta:
1.112
Beta is -16.03% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
38.16%
Sustainable growth rate is -89.67% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.449
Alpha is -1341.37% below industry average alpha yield
Alpha is -2859% below the market average
Analysis of Cost of Capital of
SWI
Equity cost of capital:
0.095
Equity cost of capital is -11.34% below industry mean WACC
Unlevered (without debt) cost of capital:
6.40%
Before-tax cost of debt:
3.26%
After-tax cost of debt:
2.58%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.58%
WACC is -11.64% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$5.01
Revenue growth rate per share of (3Y):
0.62
Annual revenue growth rate is -183.69% below industry average
EPS:
-$0.31
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$0.98
-
-
Debt per share
$12.05
EBITDA per share
$1.14
Valuation Analysis Today of
SWI
P/E Ratio:
0
P/E Ratio of Competitors/Peers:
12.45
P/E ratio is -100.00% lower than main peers & is higher than the industry
-
SWI is -143.32% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.75
Price to sales ratio is -84.09% below the industry mean
P/B (Price to book value ratio):
0.62
Price to free cash flow: 8.91
Price to free cash flow ratio is -74.18% lower than the industry
Net income growth rate (3Y):
-77.25%
Net income growth rate is -100.91% lower than the industry average net income growth rate
Dividend Analysis
-
Dividend yeild: 34.25%
Previous Dividend: $3.00
Previous adjusted dividend: $3.00
Previous Dividend: $3.00
-
-
Average dividend payment (long-term): $3.00
-
-
-
-
Previous dividend payment date: 24/08/2021
Previous dividend record date: 08/09/2021
Previous dividend declaration date: 30/07/2021
Dividend History:
2021-08-06--$3.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
85.13%
Net debt to equity ratio:
53.67%
Debt to assets ratio:
40.71%
Net debt to assets ratio:
25.67%
Debt-to-asset ratio is -41.61% below industry average
Ability to repay debt:
Interest coverage ratio:
2.84
Interest coverage ratio is -101.34% less than industry average
Looking forward:
Debt growth rate:
-2.74%
Annual debt growth is -103% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.26%
Analysis of Key Statistics
Correlation of price movement with the market:
0.445
Statistical significance of correlation:
SWI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.48
Stock price is -7.30% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.48
Correlation of price movement with Nasdaq (^IXIC):
-0.039
Covariance of price movement with the market:
-0.076
Kurtosis
32.989
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-2.813
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
SWI
Gross Profit Margin Ratio:
291%
Operating Profit Margin Ratio:
0.07%
Operating profit margin is -100.57% lower than the industry
Net Profit Margin Ratio:
291%
Effective Tax Rate:
42.33%
Effective tax rate is 35.11% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-2.15%
Return on equity (ROE) is -102.01% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-1.03%
Return on assets (ROA) is -72.88% lower than the industry
Financial Leverage:
1.7x
Current Ratio:
2.13
Current ratio is -8.65% below industry average
Cash Conversion Cycle (days):
28.6
Cash conversion cycle is -74.60% below industry average
The remaining useful life of property plant & equipment is: 8.3 years
Stock based compensation to net income ratio:
-31.22%
In-depth Efficiency Analysis
Revenue generated per employee:
364.3K
Each employee generates -8% less revenue than industry average revenue per employee
EBITDA generated per employee:
82.5K
Each employee generates 26% more EBITDA than industry average revenue per employee
Profit generated per employee:
- 22.1K
Each employee generates -205% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
16.2K
Each employee generates -18% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.8M
Each employee generates -18% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- -19.33%
Growth rate in R&D investment/expenditure is 645.62% higher than the industry
Competitors/Peer firms of
SWI
PURE STORAGE, INC. (XNYS:PSTG)
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION (XNYS:SAIC)
ALTERYX, INC. (XNYS:AYX)
Q2 HOLDINGS, INC. (XNYS:QTWO)
OneConnect Financial Technology Co Ltd (XNYS:OCFT)
Daqo New Energy Corp. (XNYS:DQ)
C3.AI, INC. (XNYS:AI)
DoubleVerify Holdings Inc (XNYS:DV)
VIZIO HOLDING CORP. (XNYS:VZIO)
Current Analyst Ratings
Strong buy�13%
Buy�29%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
806.83M
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:
218.83M
588.00M
112.15M
152.45M
416.51M
264.06M
58.79M
587.45M
-
64.44M
194.38M
182.69M
549.00K
- 48907.00K
- 64309.00K
- 27221.00K
- 48907.00K
Statement of Cash Flow
Date:
Period:
33.93M
Differed Income Tax :
- 6392.00K
Stock Based Compensation :
15.27M
Change in Working Capital :
- 934.00K
Accounts Receivables:
- 3332.00K
Other Working Capital:
3.88M
Other Non-Cash Items:
3.05M
Net Cash Provided by Operating Activities:
40.26M
Investments in PP&E:
- 1180.00K
Net Acquisitions:
- 6500.00K
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
751.22M
-
751.22M
99.57M
-
22.56M
873.35M
99.35M
3.30B
311.87M
-
141.51M
36.20M
3.89B
-
4.76B
7.19M
34.84M
6.48M
329.02M
39.65M
410.69M
1.94B
88.79M
2.07B
-
2.48B
160.00K
- 285011.00K
- 15589.0K
2.58B
March 31, 2022 at 6:00:00 AM
806.28M
2.28B
4.76B
-
1.97B
1.2B
-
- 3120.00K
- 10800.00K
- 4975.00K
-
- 6419.00K
-
1.77M
- 9629.00K
- 727.00K
19.10M
751.22M
732.12M
40.26M
- 4300.00K
35.96M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
SWI
2023
2024
2025
2026
2027
$7.18
$7.63
$8.11
$8.62
$9.16