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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Texas Capital Bancshares, Inc. (XNAS:TCBI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
TCBI
Name:
TEXAS CAPITAL BANCSHARES, INC. (XNAS:TCBI)
Sector:
72.92M
Industry:
Banks�Regional
CEO:
Mr. C. Keith Cargill
Total Employees:
1,751
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -286.94% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF TEXAS CAPITAL BANCSHARES, INC.(TCBI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BANKS�REGIONAL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
58
One Month Price Target:
$58.49
Six Month Price Target :
$60.92
Likely Price in One Year's Time:
Ticker:
$63.84
Likely Trading Range Today Under (Normal Volatility)
$57.68
Price Upper limit ($) :
$58.39
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$53.71
This week:
$48.41
This month :
$38.82
Other Primary facts
Market Cap:
2.95B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
49.88M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.72%
-24.37%
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:
$77.90
$68.78
$38.10
$47.22
Medium risk (<10%) entry points
Buy Call
Sell Call
$65.81
Buy Put:
Sell Put:
$63.86
$50.17
$52.14
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
TCBI
Sharpe Ratio:
1.41%
Comparison:
TCBI, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 14.88% higher than the industry
& is -38.09% lower than the market/S&P 500 average
Average Returns/Yield of
TCBI
Daily returns:
0.06%
Weekly returns:
0.30%
Monthly returns:
1.20%
Yearly returns:
10.91%
Comparison of returns:
Average annual returns/yield (last 3 years) is 32.13% above industry average
Classification:
TCBI, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.94
Statistical test of Returns:
TCBI has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.63%
Weekly Volatility:
8.12%
Monthly Volatility:
16.23%
Yearly Volatility:
56.23%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.09%
Volatility in last five trading days has been -97.54% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.39%
Weekly VaR:
-16.53%
Monthly VaR:
-33.07%
How Much Can the price of
TCBI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-29%
Worst case (decline):
>85%
This translates to price declining to:
$41.44
This translates to price declining to:
$8.70
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
TCBI is a 133.40% riskier investment compared to the market/S&P 500 & is 99.95% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 27.06% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
TCBI
Beta in relation to market/S&P 500--1.50
Expected beta in 1 year's time:
0.917
Expected beta in 3 year's time:
1.297
Unlevered (debt free) Beta:
1.222
Beta in relation to Nasdaq (XNAS):
0.649
Beta in relation to all global stocks::
1.083
Beta Comparison & Analysis
Beta of competitors/peers::
1.115
Beta is 34.30% higher than peers
Average Industry Beta:
0.964
Beta is 55.43% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
8.04%
Sustainable growth rate is -11.92% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.010
Alpha is -13.20% below industry average alpha yield
Alpha is 64% compared to market & is healthy
Analysis of Cost of Capital of
TCBI
Equity cost of capital:
0.134
Equity cost of capital is 37.52% above industry mean WACC
Unlevered (without debt) cost of capital:
10.94%
Before-tax cost of debt:
4.43%
After-tax cost of debt:
3.50%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.50%
WACC is 10.18% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$17.27
Revenue growth rate per share of (3Y):
0.94
Annual revenue growth rate is -137.44% below industry average
EPS:
$3.96
Expected Annual growth rate of EPS (3Y):
-9.62%
Expected future EPS growth rate is -179.99% lower than the Banks�Regional industry
Free cash flow (FCF) per share:
$10.28
Balance sheet equity growth per share: 89.90%
Equity growth rate per share is 132.17% higher than the industry
Debt per share
$18.63
EBITDA per share
$9.50
Valuation Analysis Today of
TCBI
P/E Ratio:
17.96
P/E Ratio of Competitors/Peers:
8.94
P/E ratio is 100.92% higher than main peers & is 44.72% higher than the industry
Stock price/value with industry average P/E ratio: $49.14
TCBI is 18.03% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
3.36
Price to sales ratio is -21.48% below the industry mean
P/B (Price to book value ratio):
0.94
Price to free cash flow: 5.64
-
Net income growth rate (3Y):
-16.51%
Net income growth rate is -129.98% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 1.98%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
30.08%
Net debt to equity ratio:
68.66%
Debt to assets ratio:
2.99%
Net debt to assets ratio:
6.83%
Debt-to-asset ratio is -98.20% below industry average
Ability to repay debt:
Interest coverage ratio:
4.54
Interest coverage ratio is 447.80% more than industry average
Looking forward:
Debt growth rate:
-7.87%
Annual debt growth is -2584% 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:
0.448
Statistical significance of correlation:
TCBI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.501
Stock price is -10.47% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.501
Correlation of price movement with Nasdaq (^IXIC):
0.013
Covariance of price movement with the market:
0.028
Kurtosis
7.673
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:
-0.359
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
TCBI
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
38.56%
Operating profit margin is 7.68% higher than the industry
Net Profit Margin Ratio:
-
Effective Tax Rate:
25.10%
Effective tax rate is 16.50% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
7.03%
Return on equity (ROE) is -41.04% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.70%
Return on assets (ROA) is -69.66% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
2.37
Current ratio is -96.05% below industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 6.6 years
Stock based compensation to net income ratio:
2.57%
In-depth Efficiency Analysis
Revenue generated per employee:
492.1K
Each employee generates 30% more revenue than industry average revenue per employee
EBITDA generated per employee:
270.7K
Each employee generates 20% more EBITDA than industry average revenue per employee
Profit generated per employee:
124.1K
Each employee generates -12% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
41.6K
Each employee generates -50% less free cash flow than industry average revenue per employee
Assets/Capital per employee
9.8K
Each employee generates -50% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
TCBI
VIRTU FINANCIAL, INC. (XNAS:VIRT)
THE BEAUTY HEALTH COMPANY (XNAS:SKIN)
PROSPECT CAPITAL CORPORATION (XNAS:PSEC)
INDEPENDENT BANK GROUP, INC. (XNAS:IBTX)
VALLEY NATIONAL BANCORP (XNAS:VLYPO)
FIRST CITIZENS BANCSHARES, INC. (XNAS:FCNCP)
OLD NATIONAL BANCORP (XNAS:ONB)
AGCUU
Mr. Cooper Group Inc. (XNAS:COOP)
Current Analyst Ratings
Strong buy�8%
Buy�13%
Hold�54%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
861.66M
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:
-
-
-
337.04M
350.32M
13.29M
-
4.98M
856.70M
104.39M
77.94M
473.97M
-
217.34M
295.94M
74.29M
217.34M
Statement of Cash Flow
Date:
Period:
10.60M
Differed Income Tax :
-
Stock Based Compensation :
5.59M
Change in Working Capital :
18.51M
Accounts Receivables:
-
Other Working Capital:
1.96B
Other Non-Cash Items:
2.88M
Net Cash Provided by Operating Activities:
72.92M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 376415.00K
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
234.85M
2.59B
2.83B
556.15M
-
-
3.38B
-
-
-
-
-
-
17.16M
27.72B
31.09B
-
1.43B
- 205425.00K
-
-
1.43B
929.41M
25.64B
26.57B
-
28.00B
-
1.98B
- 205425.0K
1.31B
March 31, 2022 at 6:00:00 AM
-
3.09B
31.09B
-
2.36B
2.1B
-
1.24B
866.10M
-
-
-
- 4313.00K
- 3509838.00K
- 3514151.00K
-
- 2575126.00K
5.37B
7.95B
72.92M
-
72.92M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
TCBI
2023
2024
2025
2026
2027
$63.97
$70.40
$77.49
$85.29
$93.88