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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Sovos Brands, Inc. (XNAS:SOVO) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SOVO
Name:
SOVOS BRANDS, INC. (XNAS:SOVO)
Sector:
4.02M
Industry:
Packaged Foods
CEO:
Total Employees:
608
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -134.67% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SOVOS BRANDS, INC.(SOVO) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND PACKAGED FOODS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
14.93
One Month Price Target:
$14.98
Six Month Price Target :
$15.21
Likely Price in One Year's Time:
Ticker:
$15.5
Likely Trading Range Today Under (Normal Volatility)
$14.81
Price Upper limit ($) :
$15.07
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$14.04
This week:
$12.94
This month :
$10.95
Other Primary facts
Market Cap:
1.52B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
100.91M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
8.8%
-13.54%
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:
$19.05
$17.15
$10.81
$12.71
Medium risk (<10%) entry points
Buy Call
Sell Call
$16.53
Buy Put:
Sell Put:
$16.12
$13.32
$13.74
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SOVO
Sharpe Ratio:
2.60%
Comparison:
SOVO, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 98.21% higher than the industry
& ratio is 13.97% higher than the market/S&P 500 average
Average Returns/Yield of
SOVO
Daily returns:
0.09%
Weekly returns:
0.43%
Monthly returns:
1.71%
Yearly returns:
8.42%
Comparison of returns:
Average annual returns/yield (last 3 years) is 143.07% above industry average
Classification:
SOVO, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.55
Statistical test of Returns:
SOVO has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.94%
Weekly Volatility:
6.58%
Monthly Volatility:
13.16%
Yearly Volatility:
45.57%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
-
-
Value at Risk Analysis (VaR)
Daily VaR:
-5.96%
Weekly VaR:
-13.32%
Monthly VaR:
-26.64%
How Much Can the price of
SOVO
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
-92.27%
This translates to price declining to:
$11.56
This translates to price declining to:
$1.15
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
SOVO is a 88.00% riskier investment compared to the market/S&P 500 & is 61.06% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 28.60% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SOVO
Beta in relation to market/S&P 500--0.57
Expected beta in 1 year's time:
-
Expected beta in 3 year's time:
-
Unlevered (debt free) Beta:
0.145
Beta in relation to Nasdaq (XNAS):
-0.039
Beta in relation to all global stocks::
0.02
Beta Comparison & Analysis
Beta of competitors/peers::
-
-
Average Industry Beta:
0.586
Beta is -3.40% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.134
Alpha is 970.43% above industry average alpha yield
Alpha is 855% higher than market/& is unsustainably high
Analysis of Cost of Capital of
SOVO
Equity cost of capital:
0.070
Equity cost of capital is -1.90% below industry mean WACC
Unlevered (without debt) cost of capital:
1.80%
Before-tax cost of debt:
5.81%
After-tax cost of debt:
4.59%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.59%
WACC is 6.08% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$7.08
Revenue growth rate per share of (3Y):
2.91
Annual revenue growth rate is 304.76% above the industry average
EPS:
-$0.07
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$0.30
-
-
Debt per share
$4.94
EBITDA per share
$0.65
Valuation Analysis Today of
SOVO
P/E Ratio:
2559.12
P/E Ratio of Competitors/Peers:
-
- & is 6522.94% higher than the industry
-
SOVO is -651.98% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.11
Price to sales ratio is -9.12% below the industry mean
P/B (Price to book value ratio):
2.91
Price to free cash flow: 49.83
-
Net income growth rate (3Y):
-109.30%
Net income growth rate is -1115.94% 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:
96.24%
Net debt to equity ratio:
83.34%
Debt to assets ratio:
41.85%
Net debt to assets ratio:
36.24%
Debt-to-asset ratio is -22.35% below industry average
Ability to repay debt:
Interest coverage ratio:
2.24
Interest coverage ratio is -99.09% less than industry average
Looking forward:
Debt growth rate:
37.97%
Annual debt growth is -86% lower 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:
-0.042
Statistical significance of correlation:
SOVO does not have a has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.429
Stock price is -109.69% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.429
Correlation of price movement with Nasdaq (^IXIC):
0.009
Covariance of price movement with the market:
0.008
Kurtosis
2.312
Returns are more concentrated around the mean (platykurtic), compared to a normal distribution
Skewness of returns:
-0.517
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
SOVO
Gross Profit Margin Ratio:
118%
Operating Profit Margin Ratio:
3.98%
Operating profit margin is -17.64% lower than the industry
Net Profit Margin Ratio:
118%
Effective Tax Rate:
-201.39%
Effective tax rate is -594.06% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-0.42%
Return on equity (ROE) is -103.78% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-0.18%
Return on assets (ROA) is -104.07% lower than the industry
Financial Leverage:
1.7x
Current Ratio:
2.17
Current ratio is -20.85% below industry average
Cash Conversion Cycle (days):
29.1
Cash conversion cycle is -40.71% below industry average
The remaining useful life of property plant & equipment is: 19.5 years
Stock based compensation to net income ratio:
-189.13%
In-depth Efficiency Analysis
Revenue generated per employee:
1.2M
Each employee generates 49% more revenue than industry average revenue per employee
EBITDA generated per employee:
107.3K
Each employee generates -5% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 3.6K
Each employee generates -107% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
6.6K
Each employee generates -278% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.6M
Each employee generates -278% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
SOVO
-
-
-
-
-
-
-
-
-
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
3/26/22
Revenue:
714.84M
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:
505.92M
208.92M
-
-
142.11M
-
27.73M
169.84M
-
29.13M
36.85M
65.26M
28.42M
- 2161.00K
- 717.00K
1.44M
- 2161.00K
Statement of Cash Flow
Date:
Period:
9.56M
Differed Income Tax :
306.00K
Stock Based Compensation :
4.09M
Change in Working Capital :
- 8203.00K
Accounts Receivables:
- 12065.00K
Other Working Capital:
-
Other Non-Cash Items:
1.40M
Net Cash Provided by Operating Activities:
11.20M
Investments in PP&E:
- 7180.00K
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):
3/26/22
2022
Q1
70.15M
-
70.15M
82.80M
49.86M
7.34M
210.15M
82.60M
437.45M
457.85M
-
-
2.24M
980.14M
-
1.19B
66.35M
3.38M
-
-
27.06M
96.79M
498.16M
431.00K
575.87M
-
672.66M
101.00K
- 45783.00K
-
563.31M
March 26, 2022 at 6:00:00 AM
675.76M
517.63M
1.19B
-
501.54M
431.4M
-
-
- 7180.00K
- 24.00K
-
-
-
-
- 24.00K
-
4.00M
70.15M
66.15M
11.20M
- 7180.00K
4.02M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
SOVO
2023
2024
2025
2026
2027
$15.55
$16.14
$16.75
$17.39
$18.05