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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Switch, Inc. (XNYS:SWCH) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SWCH
Name:
SWITCH, INC. (XNYS:SWCH)
Sector:
- 94463.00K
Industry:
Information Technology Services
CEO:
Mr. Rob Roy
Total Employees:
829
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -99.04% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SWITCH, INC.(SWCH) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INFORMATION TECHNOLOGY SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
33.92
One Month Price Target:
$34.04
Six Month Price Target :
$34.64
Likely Price in One Year's Time:
Ticker:
$35.37
Likely Trading Range Today Under (Normal Volatility)
$33.84
Price Upper limit ($) :
$34.1
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$32.37
This week:
$30.45
This month :
$26.97
Other Primary facts
Market Cap:
8.31B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
244.90M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.74%
-13.16%
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:
$41.11
$37.73
$26.73
$30.11
Medium risk (<10%) entry points
Buy Call
Sell Call
$36.63
Buy Put:
Sell Put:
$35.91
$31.20
$31.93
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SWCH
Sharpe Ratio:
6.04%
Comparison:
SWCH, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 233.09% higher than the industry
& ratio is 164.83% higher than the market/S&P 500 average
Average Returns/Yield of
SWCH
Daily returns:
0.15%
Weekly returns:
0.74%
Monthly returns:
2.96%
Yearly returns:
14.44%
Comparison of returns:
Average annual returns/yield (last 3 years) is 145.69% above industry average
Classification:
SWCH, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.23
Statistical test of Returns:
SWCH has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.30%
Weekly Volatility:
5.15%
Monthly Volatility:
10.29%
Yearly Volatility:
35.65%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.11%
Volatility in last five trading days has been -95.17% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.58%
Weekly VaR:
-10.24%
Monthly VaR:
-20.48%
How Much Can the price of
SWCH
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-70.94%
This translates to price declining to:
$28.35
This translates to price declining to:
$9.86
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
SWCH is a 44.53% riskier investment compared to the market/S&P 500 & is 23.82% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -24.14% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SWCH
Beta in relation to market/S&P 500--0.64
Expected beta in 1 year's time:
0.561
Expected beta in 3 year's time:
0.793
Unlevered (debt free) Beta:
0.125
Beta in relation to Nasdaq (XNAS):
0.635
Beta in relation to all global stocks::
0.567
Beta Comparison & Analysis
Beta of competitors/peers::
1.262
Beta is -49.69% lower than peers
Average Industry Beta:
1.209
Beta is -47.46% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.280
Alpha is 830.32% above industry average alpha yield
Alpha is 1780% higher than market/& is unsustainably high
Analysis of Cost of Capital of
SWCH
Equity cost of capital:
0.075
Equity cost of capital is -34.38% below industry mean WACC
Unlevered (without debt) cost of capital:
1.47%
Before-tax cost of debt:
2.88%
After-tax cost of debt:
2.28%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.28%
WACC is -48.01% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$2.56
Revenue growth rate per share of (3Y):
13.28
Annual revenue growth rate is -300.71% below industry average
EPS:
$0.04
Expected Annual growth rate of EPS (3Y):
-30.66%
Expected future EPS growth rate is -1003.96% lower than the Information Technology Services industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: 1387.22%
Equity growth rate per share is 4324.99% higher than the industry
Debt per share
$7.35
EBITDA per share
$1.02
Valuation Analysis Today of
SWCH
P/E Ratio:
22.25
P/E Ratio of Competitors/Peers:
28.05
P/E ratio is -20.70% lower than main peers & is -53.13% lower than the industry
Stock price/value with industry average P/E ratio: $1.90
SWCH is 1686.47% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $969.35
Present value of the expected future dividends only: $248.93
P/S (Price to Sales ratio):
13.27
Price to sales ratio is 263.49% above the industry mean
P/B (Price to book value ratio):
13.28
-
-
Net income growth rate (3Y):
-42.34%
Net income growth rate is -100.05% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 119.00%
Dividend yeild: 0.61%
Previous Dividend: $0.05
Previous adjusted dividend: $0.05
Previous Dividend: $0.21
Expected next dividend best case: $0.06
Expected next dividend worst case: $0.04
Average dividend payment (long-term): $0.05
Average dividend increase/decrease (growth rate) % per period: 7.41%
Expected next dividend payment date: 09/05/2022
Expected next dividend record date: 22/08/2022
Expected next dividend declaration date: 08/08/2022
Previous dividend payment date: 06/06/2022
Previous dividend record date: 24/05/2022
Previous dividend declaration date: 05/10/2022
Dividend History:
2022-05-23--$0.05
2021-11-18--$0.05
2021-05-24--$0.05
2022-03-10--$0.05
2021-08-18--$0.05
2021-03-15--$0.05
Dividend growth rate is -202.93% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
531.40%
Net debt to equity ratio:
525.26%
Debt to assets ratio:
60.02%
Net debt to assets ratio:
59.33%
Debt-to-asset ratio is -5.40% below industry average
Ability to repay debt:
Interest coverage ratio:
4.81
Interest coverage ratio is -88.49% less than industry average
Looking forward:
Debt growth rate:
71.78%
Annual debt growth is 1108% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.06%
Analysis of Key Statistics
Correlation of price movement with the market:
0.48
Statistical significance of correlation:
SWCH has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.596
Stock price is -19.42% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.596
Correlation of price movement with Nasdaq (^IXIC):
0.029
Covariance of price movement with the market:
0.038
Kurtosis
14.254
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:
0.326
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
SWCH
Gross Profit Margin Ratio:
169%
Operating Profit Margin Ratio:
9.44%
Operating profit margin is -236.02% lower than the industry
Net Profit Margin Ratio:
169%
Effective Tax Rate:
22.90%
Effective tax rate is -13.28% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
1.94%
Return on equity (ROE) is -96.56% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.22%
Return on assets (ROA) is 156.36% higher than the industry
Financial Leverage:
2.5x
Current Ratio:
0.52
Current ratio is -77.45% below industry average
Cash Conversion Cycle (days):
-48.1
Cash conversion cycle is -228.22% below industry average
The remaining useful life of property plant & equipment is: 0.9 years
Stock based compensation to net income ratio:
101.78%
In-depth Efficiency Analysis
Revenue generated per employee:
754.9K
Each employee generates 79% more revenue than industry average revenue per employee
EBITDA generated per employee:
302.2K
Each employee generates 575% more EBITDA than industry average revenue per employee
Profit generated per employee:
7.9K
Each employee generates -7% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 113.9K
Each employee generates 1611% more free cash flow than industry average revenue per employee
Assets/Capital per employee
3.5M
Each employee generates 1611% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
SWCH
CACI INTERNATIONAL INC. (XNYS:CACI)
ANAPLAN, INC. (XNYS:PLAN)
CCC INTELLIGENT SOLUTIONS HOLDINGS INC. (XNYS:CCCS)
AllianzIM US LC B10 Jul (ARCX:AZAL)
WORKIVA INC. (XNYS:WK)
WEX INC. (XNYS:WEX)
IRONSOURCE LTD (XNYS:IS)
LPL FINANCIAL HOLDINGS INC. (XNAS:LPLA)
NCR CORPORATION (XNYS:NCR)
Current Analyst Ratings
Strong buy�8%
Buy�13%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
625.79M
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:
362.44M
263.35M
-
-
169.25M
-
-
169.25M
-
52.08M
187.67M
250.56M
59.10M
6.56M
18.54M
4.24M
6.56M
Statement of Cash Flow
Date:
Period:
49.78M
Differed Income Tax :
4.24M
Stock Based Compensation :
6.68M
Change in Working Capital :
- 13140.00K
Accounts Receivables:
- 6603.00K
Other Working Capital:
4.22M
Other Non-Cash Items:
- 14982.00K
Net Cash Provided by Operating Activities:
56.51M
Investments in PP&E:
- 150433.00K
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):
3/31/22
2022
Q1
27.49M
-
27.49M
24.77M
-
17.97M
70.24M
2.32B
106.35M
124.35M
-
306.75M
74.32M
2.93B
-
3.00B
21.81M
6.71M
-
37.87M
68.14M
134.53M
1.80B
413.43M
2.24B
-
2.37B
245.00K
- 18188.00K
- 568.0K
357.29M
March 31, 2022 at 6:00:00 AM
531.69M
338.78M
2.71B
-
1.81B
1.8B
-
- 164.00K
- 150597.00K
- 1031.00K
-
-
- 7811.00K
82.10M
73.25M
-
- 20832.00K
29.38M
50.22M
56.51M
- 150975.00K
- 94463.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
SWCH
2023
2024
2025
2026
2027
$35.55
$23.41
$24.41
$25.45
$26.54