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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
T. Rowe Price Group, Inc. (XNAS:TROW) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
TROW
Name:
T. ROWE PRICE GROUP, INC. (XNAS:TROW)
Sector:
1.05B
Industry:
Asset Management
CEO:
Mr. William Stromberg
Total Employees:
7,529
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -56.32% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF T. ROWE PRICE GROUP, INC.(TROW) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ASSET MANAGEMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
118.34
One Month Price Target:
$119.2
Six Month Price Target :
$123.52
Likely Price in One Year's Time:
Ticker:
$128.69
Likely Trading Range Today Under (Normal Volatility)
$117.89
Price Upper limit ($) :
$118.85
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$112.57
This week:
$105.44
This month :
$92.54
Other Primary facts
Market Cap:
26.78B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
225.69M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.01%
-13.07%
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:
$145.12
$132.89
$91.56
$103.79
Medium risk (<10%) entry points
Buy Call
Sell Call
$128.91
Buy Put:
Sell Put:
$126.30
$107.74
$110.38
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
TROW
Sharpe Ratio:
0.56%
Comparison:
TROW, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -30.89% lower than the industry
& is -75.62% lower than the market/S&P 500 average
Average Returns/Yield of
TROW
Daily returns:
0.02%
Weekly returns:
0.11%
Monthly returns:
0.44%
Yearly returns:
9.18%
Comparison of returns:
Average annual returns/yield (last 3 years) is -42.24% below industry average
Classification:
TROW, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.83
Statistical test of Returns:
TROW has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.38%
Weekly Volatility:
5.33%
Monthly Volatility:
10.66%
Yearly Volatility:
36.94%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.65%
Volatility in last five trading days has been -72.64% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.88%
Weekly VaR:
-10.90%
Monthly VaR:
-21.80%
How Much Can the price of
TROW
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-75.53%
This translates to price declining to:
$95.82
This translates to price declining to:
$28.96
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
TROW is a 53.88% riskier investment compared to the market/S&P 500 & is 31.83% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -8.24% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
TROW
Beta in relation to market/S&P 500--1.30
Expected beta in 1 year's time:
0.995
Expected beta in 3 year's time:
1.408
Unlevered (debt free) Beta:
1.279
Beta in relation to Nasdaq (XNAS):
0.979
Beta in relation to all global stocks::
0.812
Beta Comparison & Analysis
Beta of competitors/peers::
1.379
Beta is -5.55% lower than peers
Average Industry Beta:
1.694
Beta is -23.15% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
23.72%
Sustainable growth rate is -15.84% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.068
Alpha is 21.40% above industry average alpha yield
Alpha is -431% below the market average
Analysis of Cost of Capital of
TROW
Equity cost of capital:
0.121
Equity cost of capital is -18.21% below industry mean WACC
Unlevered (without debt) cost of capital:
11.85%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$34.15
Revenue growth rate per share of (3Y):
2.64
Annual revenue growth rate is -55.19% below industry average
EPS:
$12.36
Expected Annual growth rate of EPS (3Y):
14.15%
Expected future EPS growth rate is -49.04% lower than the Asset Management industry
Free cash flow (FCF) per share:
$14.57
Balance sheet equity growth per share: 159.34%
Equity growth rate per share is 654.00% higher than the industry
Debt per share
$0.94
EBITDA per share
$17.46
Valuation Analysis Today of
TROW
P/E Ratio:
11.42
P/E Ratio of Competitors/Peers:
13.99
P/E ratio is -18.37% lower than main peers & is -29.25% lower than the industry
Stock price/value with industry average P/E ratio: $199.59
TROW is -40.71% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
3.46
Price to sales ratio is -49.43% below the industry mean
P/B (Price to book value ratio):
2.64
Price to free cash flow: 8.12
Price to free cash flow ratio is -6.97% lower than the industry
Net income growth rate (3Y):
77.60%
Net income growth rate is -46.62% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 9.62%
Dividend yeild: 3.85%
Previous Dividend: $1.20
Previous adjusted dividend: $1.20
Previous Dividend: $4.56
Expected next dividend best case: $1.70
Expected next dividend worst case: $0.70
Average dividend payment (long-term): $1.21
Average dividend increase/decrease (growth rate) % per period: 14.85%
Expected next dividend payment date: 27/09/2022
Expected next dividend record date: 13/09/2022
-
Previous dividend payment date: 29/06/2022
Previous dividend record date: 15/06/2022
-
Dividend History:
2022-06-14--$1.20
2021-12-15--$1.08
2021-06-24--$3.00
2022-03-14--$1.20
2021-09-14--$1.08
2021-06-14--$1.08
Dividend growth rate is 168.95% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
2.34%
Net debt to equity ratio:
-19.72%
Debt to assets ratio:
1.72%
Net debt to assets ratio:
-14.46%
Debt-to-asset ratio is -96.72% below industry average
Ability to repay debt:
Interest coverage ratio:
-
-
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.816
Statistical significance of correlation:
TROW has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.576
Stock price is 41.59% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.576
Correlation of price movement with Nasdaq (^IXIC):
-0.008
Covariance of price movement with the market:
-0.011
Kurtosis
7.468
Returns have a significant 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:
0.044
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
TROW
Gross Profit Margin Ratio:
243%
Operating Profit Margin Ratio:
47.93%
Operating profit margin is 1.89% higher than the industry
Net Profit Margin Ratio:
243%
Effective Tax Rate:
22.57%
Effective tax rate is -7.59% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
32.04%
Return on equity (ROE) is 26.76% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
23.50%
Return on assets (ROA) is 302.67% higher than the industry
Financial Leverage:
1.0x
Current Ratio:
4.62
Current ratio is 20.33% above industry average
Cash Conversion Cycle (days):
50.3
Cash conversion cycle is -94.20% below industry average
The remaining useful life of property plant & equipment is: 2.0 years
Stock based compensation to net income ratio:
2.19%
In-depth Efficiency Analysis
Revenue generated per employee:
1.0M
Each employee generates -26% less revenue than industry average revenue per employee
EBITDA generated per employee:
523.4K
Each employee generates -169% less EBITDA than industry average revenue per employee
Profit generated per employee:
385.4K
Each employee generates -131% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
139.3K
Each employee generates -216% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.3M
Each employee generates -216% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
TROW
SVB FINANCIAL GROUP (XNAS:SIVB)
FIFTH THIRD BANCORP (XNAS:FITB)
Nasdaq, Inc. (XNAS:NDAQ)
Willis Towers Watson Public Limited Company (XNAS:WTW)
HBANN
NORTHERN TRUST CORPORATION (XNAS:NTRS)
GRAB HOLDINGS LIMITED (XNAS:GRAB)
HUNTINGTON BANCSHARES INCORPORATED (XNAS:HBAN)
ANZU SPECIAL ACQUISITION I UNT (XNAS:ANZUU)
Current Analyst Ratings
Strong buy�8%
Buy�8%
Hold�38%
Sell�13%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
7.71B
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:
3.03B
4.68B
-
878.20M
982.90M
104.70M
-
982.90M
-
-
209.50M
3.94B
3.69B
2.90B
3.68B
830.10M
2.90B
Statement of Cash Flow
Date:
Period:
54.50M
Differed Income Tax :
-
Stock Based Compensation :
63.60M
Change in Working Capital :
238.00M
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
232.90M
Net Cash Provided by Operating Activities:
1.10B
Investments in PP&E:
- 54900.00K
Net Acquisitions:
-
Purchases of Investments:
- 11900.00K
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
2.00B
-
2.00B
919.50M
-
-
2.92B
900.80M
2.64B
886.30M
4.54B
-
462.50M
9.43B
-
12.35B
417.30M
-
214.60M
-
214.60M
631.90M
211.80M
1.39B
1.60B
-
2.23B
45.50M
8.37B
- 31500.0K
668.20M
March 31, 2022 at 6:00:00 AM
4.01B
9.05B
11.29B
-
211.80M
- 1785700.0K
64.90M
5.70M
3.80M
-
-
- 320100.00K
- 279200.00K
- 44800.00K
- 644100.00K
- 2700.00K
460.40M
2.08B
1.62B
1.10B
- 54900.00K
1.05B
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
TROW
2023
2024
2025
2026
2027
$129.33
$184.98
$201.16
$218.76
$237.91