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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Sorrento Therapeutics, Inc. (XNAS:SRNE) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SRNE
Name:
SORRENTO THERAPEUTICS, INC. (XNAS:SRNE)
Sector:
- 85953.00K
Industry:
Biotechnology
CEO:
Dr. Henry Ji
Total Employees:
799
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 44.10% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SORRENTO THERAPEUTICS, INC.(SRNE) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BIOTECHNOLOGY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
2.01
One Month Price Target:
$2.04
Six Month Price Target :
$2.16
Likely Price in One Year's Time:
Ticker:
$2.32
Likely Trading Range Today Under (Normal Volatility)
$1.98
Price Upper limit ($) :
$2.04
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$1.65
This week:
$1.2
This month :
$.38
Other Primary facts
Market Cap:
854.91M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
449.95M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
158.02%
-25.13%
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:
$3.70
$2.92
$0.32
$1.10
Medium risk (<10%) entry points
Buy Call
Sell Call
$2.67
Buy Put:
Sell Put:
$2.50
$1.35
$1.52
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SRNE
Sharpe Ratio:
2.07%
Comparison:
SRNE, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 6.30% higher than the industry
& is -9.31% lower than the market/S&P 500 average
Average Returns/Yield of
SRNE
Daily returns:
0.19%
Weekly returns:
0.97%
Monthly returns:
3.87%
Yearly returns:
25.22%
Comparison of returns:
Average annual returns/yield (last 3 years) is 83.87% above industry average
Classification:
SRNE, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.71
Statistical test of Returns:
SRNE has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
8.92%
Weekly Volatility:
19.95%
Monthly Volatility:
39.90%
Yearly Volatility:
138.21%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
6.36%
Volatility in last five trading days has been -28.69% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-18.13%
Weekly VaR:
-40.54%
Monthly VaR:
-81.07%
How Much Can the price of
SRNE
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-69%
Worst case (decline):
>85%
This translates to price declining to:
$0.61
This translates to price declining to:
$0.30
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
SRNE is a 472.21% riskier investment compared to the market/S&P 500 & is 390.21% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 87.64% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SRNE
Beta in relation to market/S&P 500--2.27
Expected beta in 1 year's time:
1.31
Expected beta in 3 year's time:
1.853
Unlevered (debt free) Beta:
1.306
Beta in relation to Nasdaq (XNAS):
1.153
Beta in relation to all global stocks::
0.488
Beta Comparison & Analysis
Beta of competitors/peers::
1.284
Beta is 77.12% higher than peers
Average Industry Beta:
1.152
Beta is 97.50% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.276
Alpha is 94.92% above industry average alpha yield
Alpha is 1760% higher than market/& is unsustainably high
Analysis of Cost of Capital of
SRNE
Equity cost of capital:
0.187
Equity cost of capital is 69.68% above industry mean WACC
Unlevered (without debt) cost of capital:
10.75%
Before-tax cost of debt:
3.28%
After-tax cost of debt:
2.59%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.59%
WACC is 54.77% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$0.13
Revenue growth rate per share of (3Y):
4
Annual revenue growth rate is -97.33% below industry average
EPS:
-$1.55
Expected Annual growth rate of EPS (3Y):
-12.97%
Expected future EPS growth rate is -230.00% lower than the Biotechnology industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$0.40
EBITDA per share
-$1.07
Valuation Analysis Today of
SRNE
P/E Ratio:
-
P/E Ratio of Competitors/Peers:
177.21
-
-
SRNE is -101.45% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
15.86
Price to sales ratio is -60.85% below the industry mean
P/B (Price to book value ratio):
4
-
-
Net income growth rate (3Y):
-2.80%
Net income growth rate is -103.97% 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:
79.23%
Net debt to equity ratio:
60.46%
Debt to assets ratio:
20.98%
Net debt to assets ratio:
16.01%
Debt-to-asset ratio is -50.24% below industry average
Ability to repay debt:
Interest coverage ratio:
-59.09
Interest coverage ratio is -50.07% less than industry average
Looking forward:
Debt growth rate:
105.75%
Annual debt growth is -22% lower than industry average debt growth rate
Debt repayment rate in last quarter: 21.21%
Analysis of Key Statistics
Correlation of price movement with the market:
0.158
Statistical significance of correlation:
SRNE has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.34
Stock price is -53.61% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.34
Correlation of price movement with Nasdaq (^IXIC):
-0.084
Covariance of price movement with the market:
-0.435
Kurtosis
144.012
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:
8.597
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
SRNE
Gross Profit Margin Ratio:
294%
Operating Profit Margin Ratio:
-742.42%
Operating profit margin is 73.19% higher than the industry
Net Profit Margin Ratio:
294%
Effective Tax Rate:
6.32%
Effective tax rate is 10.75% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-208.20%
Return on equity (ROE) is 263.13% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-55.12%
Return on assets (ROA) is 170.18% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
1.62
Current ratio is -79.97% below industry average
Cash Conversion Cycle (days):
-658.4
Cash conversion cycle is -223.52% below industry average
The remaining useful life of property plant & equipment is: 10.8 years
Stock based compensation to net income ratio:
-4.41%
In-depth Efficiency Analysis
Revenue generated per employee:
71.4K
Each employee generates -96% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 603.9K
Each employee generates -257% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 590.3K
Each employee generates -561% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 107.6K
Each employee generates -173% less free cash flow than industry average revenue per employee
Assets/Capital per employee
656.5K
Each employee generates -173% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 85.85%
Growth rate in R&D investment/expenditure is -2492.84% lower than the industry
Competitors/Peer firms of
SRNE
Olink Holding AB (publ) (XNAS:OLK)
SILK ROAD MEDICAL, INC. (XNAS:SILK)
Accolade Inc (XNAS:ACCD)
ENANTA PHARMACEUTICALS, INC. (XNAS:ENTA)
AVID BIOSERVICES, INC. (XNAS:CDMO)
ADDUS HOMECARE CORPORATION (XNAS:ADUS)
ATARA BIOTHERAPEUTICS, INC. (XNAS:ATRA)
RADNET, INC. (XNAS:RDNT)
SHARECARE, INC. (XNAS:SHCR)
Current Analyst Ratings
Strong buy�4%
Buy�4%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
57.03M
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:
15.40M
41.63M
227.07M
-
197.79M
-
50.58M
475.43M
-
8.17M
12.84M
- 482490.00K
- 423429.00K
- 471650.00K
- 504127.00K
- 31847.00K
- 471650.00K
Statement of Cash Flow
Date:
Period:
3.30M
Differed Income Tax :
1.09M
Stock Based Compensation :
20.79M
Change in Working Capital :
- 4631.00K
Accounts Receivables:
- 5982.00K
Other Working Capital:
- 1530.00K
Other Non-Cash Items:
- 63365.00K
Net Cash Provided by Operating Activities:
- 83360.00K
Investments in PP&E:
- 2593.00K
Net Acquisitions:
- 11071.00K
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
111.91M
158.75M
270.66M
24.67M
14.09M
21.70M
331.12M
126.60M
79.53M
258.67M
50.67M
-
9.06M
524.52M
-
855.64M
25.02M
69.39M
-
673.00K
109.15M
204.23M
179.49M
124.54M
425.21M
-
629.44M
38.00K
- 1427419.00K
- 223.0K
-
March 31, 2022 at 6:00:00 AM
477.80M
226.54M
855.98M
209.42M
248.88M
137.0M
-
-
- 13664.00K
- 48316.00K
164.43M
-
-
57.25M
173.37M
- 1104.00K
75.24M
111.91M
36.67M
- 83360.00K
- 2593.00K
- 85953.00K
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
SRNE
2023
2024
2025
2026
2027
$2.33
$2.68
$3.09
$3.57
$4.11