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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Stagwell Inc. (XNAS:STGW) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
STGW
Name:
STAGWELL INC. (XNAS:STGW)
Sector:
- 55115.00K
Industry:
Advertising Agencies
CEO:
Total Employees:
9,100
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 1200.78% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF STAGWELL INC.(STGW) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ADVERTISING AGENCIES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
6.33
One Month Price Target:
$6.37
Six Month Price Target :
$6.55
Likely Price in One Year's Time:
Ticker:
$6.77
Likely Trading Range Today Under (Normal Volatility)
$6.29
Price Upper limit ($) :
$6.41
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$5.59
This week:
$4.68
This month :
$3.04
Other Primary facts
Market Cap:
1.90B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
296.56M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
78.26%
-30.61%
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:
$9.74
$8.15
$2.92
$4.51
Medium risk (<10%) entry points
Buy Call
Sell Call
$7.63
Buy Put:
Sell Put:
$7.29
$5.02
$5.37
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
STGW
Sharpe Ratio:
4.61%
Comparison:
STGW, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 144.03% higher than the industry
& ratio is 102.45% higher than the market/S&P 500 average
Average Returns/Yield of
STGW
Daily returns:
0.28%
Weekly returns:
1.38%
Monthly returns:
5.53%
Yearly returns:
23.80%
Comparison of returns:
Average annual returns/yield (last 3 years) is 178.71% above industry average
Classification:
STGW, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.21
Statistical test of Returns:
STGW has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
5.80%
Weekly Volatility:
12.97%
Monthly Volatility:
25.93%
Yearly Volatility:
89.83%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.55%
Volatility in last five trading days has been -56.03% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-11.63%
Weekly VaR:
-26.01%
Monthly VaR:
-52.02%
How Much Can the price of
STGW
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-43%
Worst case (decline):
>85%
This translates to price declining to:
$3.62
This translates to price declining to:
$0.95
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
STGW is a 267.14% riskier investment compared to the market/S&P 500 & is 214.53% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 49.19% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
STGW
Beta in relation to market/S&P 500--1.04
Expected beta in 1 year's time:
0.723
Expected beta in 3 year's time:
1.022
Unlevered (debt free) Beta:
0.253
Beta in relation to Nasdaq (XNAS):
0.732
Beta in relation to all global stocks::
0.935
Beta Comparison & Analysis
Beta of competitors/peers::
-
-
Average Industry Beta:
1.076
Beta is -3.46% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
92.87%
Sustainable growth rate is -874.14% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.561
Alpha is 322.13% above industry average alpha yield
Alpha is 3570% higher than market/& is unsustainably high
Analysis of Cost of Capital of
STGW
Equity cost of capital:
0.103
Equity cost of capital is -2.43% below industry mean WACC
Unlevered (without debt) cost of capital:
2.50%
Before-tax cost of debt:
3.37%
After-tax cost of debt:
2.66%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.66%
WACC is -14.10% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$5.40
Revenue growth rate per share of (3Y):
1.99
Annual revenue growth rate is 1065.32% above the industry average
EPS:
$0.03
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$1.27
Balance sheet equity growth per share: 24.12%
Equity growth rate per share is 113.60% higher than the industry
Debt per share
$5.26
EBITDA per share
$0.55
Valuation Analysis Today of
STGW
P/E Ratio:
258.58
P/E Ratio of Competitors/Peers:
-
- & is 149.80% higher than the industry
Stock price/value with industry average P/E ratio: $3.11
STGW is 103.84% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.17
Price to sales ratio is -66.65% below the industry mean
P/B (Price to book value ratio):
1.99
Price to free cash flow: 4.99
Price to free cash flow ratio is -4.71% lower than the industry
Net income growth rate (3Y):
-108.75%
Net income growth rate is 207.13% 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:
422.54%
Net debt to equity ratio:
405.00%
Debt to assets ratio:
38.53%
Net debt to assets ratio:
36.93%
Debt-to-asset ratio is -34.51% below industry average
Ability to repay debt:
Interest coverage ratio:
2.98
Interest coverage ratio is 233.11% more than industry average
Looking forward:
Debt growth rate:
89.25%
Annual debt growth is -77% lower than industry average debt growth rate
Debt repayment rate in last quarter: 11.83%
Analysis of Key Statistics
Correlation of price movement with the market:
0.265
Statistical significance of correlation:
STGW has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.498
Stock price is -46.83% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.498
Correlation of price movement with Nasdaq (^IXIC):
0.006
Covariance of price movement with the market:
0.019
Kurtosis
53.723
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:
3.994
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
STGW
Gross Profit Margin Ratio:
145%
Operating Profit Margin Ratio:
6.35%
Operating profit margin is -62.23% lower than the industry
Net Profit Margin Ratio:
145%
Effective Tax Rate:
26.53%
Effective tax rate is -43.67% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
5.31%
Return on equity (ROE) is -162.44% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.48%
Return on assets (ROA) is -100.07% lower than the industry
Financial Leverage:
1.6x
Current Ratio:
0.82
Current ratio is -68.82% below industry average
Cash Conversion Cycle (days):
0.1
Cash conversion cycle is -99.94% below industry average
The remaining useful life of property plant & equipment is: 11.5 years
Stock based compensation to net income ratio:
40.87%
In-depth Efficiency Analysis
Revenue generated per employee:
175.9K
Each employee generates -50% less revenue than industry average revenue per employee
EBITDA generated per employee:
18.0K
Each employee generates -78% less EBITDA than industry average revenue per employee
Profit generated per employee:
2.2K
Each employee generates -94% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 6.1K
Each employee generates -39% less free cash flow than industry average revenue per employee
Assets/Capital per employee
332.9K
Each employee generates -39% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
STGW
-
-
-
-
-
-
-
-
-
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.60B
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:
984.71M
616.20M
-
422.38M
544.15M
-
- 51489.86K
492.66M
-
54.93M
70.61M
163.94M
101.58M
19.63M
70.76M
18.77M
19.63M
Statement of Cash Flow
Date:
Period:
31.20M
Differed Income Tax :
- 1350.00K
Stock Based Compensation :
8.02M
Change in Working Capital :
- 119881.00K
Accounts Receivables:
- 70039.00K
Other Working Capital:
- 17760.00K
Other Non-Cash Items:
- 193.00K
Net Cash Provided by Operating Activities:
- 48577.00K
Investments in PP&E:
-
Net Acquisitions:
- 935.00K
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
135.15M
-
135.15M
818.22M
-
69.01M
1.02B
429.57M
1.65B
914.83M
-
-
33.58M
3.03B
-
4.05B
248.62M
70.36M
-
344.13M
585.30M
1.25B
1.56B
221.75M
1.86B
-
3.11B
137.00K
6.67M
- 10625.0K
-
March 31, 2022 at 6:00:00 AM
1.48B
369.48M
3.48B
-
1.63B
1.5B
-
- 7354.00K
- 8289.00K
- 209500.00K
-
- 14926.00K
-
230.96M
6.53M
1.48M
- 48856.00K
135.15M
184.01M
- 48577.00K
- 6538.00K
- 55115.00K
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
STGW
2023
2024
2025
2026
2027
$6.59
$7.05
$7.55
$8.07
$8.64