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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Sterling Infrastructure, Inc. (XNAS:STRL) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
STRL
Name:
Sterling Infrastructure, Inc. (XNAS:STRL)
Sector:
4.21M
Industry:
Engineering & Construction
CEO:
Mr. Joseph Cutillo
Total Employees:
2,900
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -82.58% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF STERLING INFRASTRUCTURE, INC.(STRL) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ENGINEERING & CONSTRUCTION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
24.47
One Month Price Target:
$24.64
Six Month Price Target :
$25.49
Likely Price in One Year's Time:
Ticker:
$26.51
Likely Trading Range Today Under (Normal Volatility)
$24.36
Price Upper limit ($) :
$24.65
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$22.77
This week:
$20.68
This month :
$16.88
Other Primary facts
Market Cap:
734.78M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
30.30M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
18.6%
-19.26%
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:
$32.34
$28.69
$16.60
$20.25
Medium risk (<10%) entry points
Buy Call
Sell Call
$27.50
Buy Put:
Sell Put:
$26.72
$21.43
$22.22
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
STRL
Sharpe Ratio:
3.71%
Comparison:
STRL, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is -6.61% lower than the industry
& ratio is 62.76% higher than the market/S&P 500 average
Average Returns/Yield of
STRL
Daily returns:
0.14%
Weekly returns:
0.68%
Monthly returns:
2.73%
Yearly returns:
37.49%
Comparison of returns:
Average annual returns/yield (last 3 years) is -12.56% below industry average
Classification:
STRL, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.15
Statistical test of Returns:
STRL has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.44%
Weekly Volatility:
7.70%
Monthly Volatility:
15.40%
Yearly Volatility:
53.34%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.73%
Volatility in last five trading days has been -78.72% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.94%
Weekly VaR:
-15.51%
Monthly VaR:
-31.01%
How Much Can the price of
STRL
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-26%
Worst case (decline):
>85%
This translates to price declining to:
$18.14
This translates to price declining to:
$3.67
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
STRL is a 118.90% riskier investment compared to the market/S&P 500 & is 87.53% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 1.13% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
STRL
Beta in relation to market/S&P 500--1.24
Expected beta in 1 year's time:
0.708
Expected beta in 3 year's time:
1.001
Unlevered (debt free) Beta:
0.666
Beta in relation to Nasdaq (XNAS):
0.605
Beta in relation to all global stocks::
0.777
Beta Comparison & Analysis
Beta of competitors/peers::
0.901
Beta is 38.00% higher than peers
Average Industry Beta:
1.325
Beta is -6.19% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
19.81%
Sustainable growth rate is 43.36% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.211
Alpha is -16.41% below industry average alpha yield
Alpha is 1344% higher than market/& is unsustainably high
Analysis of Cost of Capital of
STRL
Equity cost of capital:
0.117
Equity cost of capital is -4.59% below industry mean WACC
Unlevered (without debt) cost of capital:
6.25%
Before-tax cost of debt:
3.70%
After-tax cost of debt:
2.92%
Overall debt rating:
Upper medium A grade (third highest grade),CO8<=0.0429,"Medium BBB grade (Fourth highest grade)
Weighted average cost of capital (WACC):
2.92%
WACC is -3.73% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$55.34
Revenue growth rate per share of (3Y):
1.96
Annual revenue growth rate is -14.71% below industry average
EPS:
$2.42
Expected Annual growth rate of EPS (3Y):
12.75%
Expected future EPS growth rate is -0.66% lower than the Engineering & Construction industry
Free cash flow (FCF) per share:
$2.72
-
-
Debt per share
$14.67
EBITDA per share
$5.07
Valuation Analysis Today of
STRL
P/E Ratio:
9.46
P/E Ratio of Competitors/Peers:
18.75
P/E ratio is -49.53% lower than main peers & is -67.37% lower than the industry
Stock price/value with industry average P/E ratio: $70.18
STRL is -65.13% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.44
Price to sales ratio is -92.83% below the industry mean
P/B (Price to book value ratio):
1.96
Price to free cash flow: 9.00
-
Net income growth rate (3Y):
133.96%
Net income growth rate is -1957.88% 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:
118.29%
Net debt to equity ratio:
107.67%
Debt to assets ratio:
35.78%
Net debt to assets ratio:
32.57%
Debt-to-asset ratio is -32.70% below industry average
Ability to repay debt:
Interest coverage ratio:
8.57
Interest coverage ratio is -64.78% less than industry average
Looking forward:
Debt growth rate:
27.96%
Annual debt growth is -83% lower than industry average debt growth rate
Debt repayment rate in last quarter: 1.32%
Analysis of Key Statistics
Correlation of price movement with the market:
0.407
Statistical significance of correlation:
STRL has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.523
Stock price is -22.23% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.523
Correlation of price movement with Nasdaq (^IXIC):
0.016
Covariance of price movement with the market:
0.032
Kurtosis
5.203
Returns have moderate 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:
0.087
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
STRL
Gross Profit Margin Ratio:
54%
Operating Profit Margin Ratio:
6.73%
Operating profit margin is -148.89% lower than the industry
Net Profit Margin Ratio:
54%
Effective Tax Rate:
26.81%
Effective tax rate is 29.52% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
18.98%
Return on equity (ROE) is 61.63% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.74%
Return on assets (ROA) is 39.47% higher than the industry
Financial Leverage:
1.6x
Current Ratio:
1.28
Current ratio is -54.36% below industry average
Cash Conversion Cycle (days):
14.9
Cash conversion cycle is -68.58% below industry average
The remaining useful life of property plant & equipment is: 9.9 years
Stock based compensation to net income ratio:
5.38%
In-depth Efficiency Analysis
Revenue generated per employee:
578.2K
Each employee generates -4% less revenue than industry average revenue per employee
EBITDA generated per employee:
53.0K
Each employee generates 41% more EBITDA than industry average revenue per employee
Profit generated per employee:
24.6K
Each employee generates -3869% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
1.5K
Each employee generates -123% less free cash flow than industry average revenue per employee
Assets/Capital per employee
278.2K
Each employee generates -123% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
STRL
CASS INFORMATION SYSTEMS, INC. (XNAS:CASS)
MUDRICK CAPITAL ACQUISITION CORPORATION II (XNAS:MUDS)
AMMO, INC. (XNAS:POWW)
BPYU
CRA INTERNATIONAL, INC. (XNAS:CRAI)
NAPCO SECURITY TECHNOLOGIES, INC. (XNAS:NSSC)
Air T Funding (XNAS:AIRTP)
UNIVERSAL LOGISTICS HOLDINGS, INC. (XNAS:ULH)
VEAC
Current Analyst Ratings
Strong buy�8%
Buy�0%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.68B
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:
1.45B
225.86M
-
84.48M
84.48M
-
24.45M
108.93M
48.00K
17.93M
37.66M
153.67M
112.80M
71.34M
99.72M
26.74M
71.34M
Statement of Cash Flow
Date:
Period:
11.77M
Differed Income Tax :
5.64M
Stock Based Compensation :
3.84M
Change in Working Capital :
- 19393.00K
Accounts Receivables:
5.70M
Other Working Capital:
- 2120.00K
Other Non-Cash Items:
- 2190.00K
Net Cash Provided by Operating Activities:
19.18M
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):
3/31/22
2022
Q1
80.40M
-
80.40M
333.55M
-
21.94M
435.89M
249.95M
252.35M
300.06M
-
-
4.49M
806.84M
-
1.24B
143.40M
40.49M
-
116.18M
39.45M
339.51M
444.66M
60.16M
525.58M
-
865.09M
302.00K
99.17M
- 160.0K
-
March 31, 2022 at 6:00:00 AM
1.56B
375.91M
1.24B
-
485.14M
404.7M
-
- 14563.00K
- 14563.00K
- 5928.00K
-
-
-
-
- 5928.00K
-
- 8298.00K
80.40M
88.69M
19.18M
- 14969.00K
4.21M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
STRL
2023
2024
2025
2026
2027
$26.64
$38.81
$42.05
$45.56
$49.37