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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
The Goodyear Tire & Rubber Company (XNAS:GT) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
GT
Name:
THE GOODYEAR TIRE & RUBBER COMPANY (XNAS:GT)
Sector:
- 987000.00K
Industry:
Auto Parts
CEO:
Mr. Richard Kramer
Total Employees:
72,000
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 151.06% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF THE GOODYEAR TIRE & RUBBER COMPANY(GT) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND AUTO PARTS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
13.57
One Month Price Target:
$13.71
Six Month Price Target :
$14.39
Likely Price in One Year's Time:
Ticker:
$15.2
Likely Trading Range Today Under (Normal Volatility)
$13.48
Price Upper limit ($) :
$13.67
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$12.44
This week:
$11.04
This month :
$8.5
Other Primary facts
Market Cap:
3.74B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
282.80M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
21.05%
-27.44%
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:
$18.83
$16.42
$8.31
$10.72
Medium risk (<10%) entry points
Buy Call
Sell Call
$15.63
Buy Put:
Sell Put:
$15.12
$11.50
$12.02
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
GT
Sharpe Ratio:
1.26%
Comparison:
GT, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 28.90% higher than the industry
& is -44.62% lower than the market/S&P 500 average
Average Returns/Yield of
GT
Daily returns:
0.06%
Weekly returns:
0.30%
Monthly returns:
1.21%
Yearly returns:
9.58%
Comparison of returns:
Average annual returns/yield (last 3 years) is 51.66% above industry average
Classification:
GT, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.55
Statistical test of Returns:
GT has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.09%
Weekly Volatility:
9.15%
Monthly Volatility:
18.31%
Yearly Volatility:
63.41%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.31%
Volatility in last five trading days has been -92.36% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-8.35%
Weekly VaR:
-18.66%
Monthly VaR:
-37.33%
How Much Can the price of
GT
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-32%
Worst case (decline):
>85%
This translates to price declining to:
$9.18
This translates to price declining to:
$2.04
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
GT is a 163.44% riskier investment compared to the market/S&P 500 & is 125.69% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 45.07% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
GT
Beta in relation to market/S&P 500--1.79
Expected beta in 1 year's time:
1.165
Expected beta in 3 year's time:
1.647
Unlevered (debt free) Beta:
0.552
Beta in relation to Nasdaq (XNAS):
1.067
Beta in relation to all global stocks::
0.758
Beta Comparison & Analysis
Beta of competitors/peers::
1.275
Beta is 40.55% higher than peers
Average Industry Beta:
1.212
Beta is 47.78% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
18.27%
Sustainable growth rate is -5.55% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.009
Alpha is -52.19% below industry average alpha yield
Alpha is -57% below the market average
Analysis of Cost of Capital of
GT
Equity cost of capital:
0.154
Equity cost of capital is 34.64% above industry mean WACC
Unlevered (without debt) cost of capital:
4.75%
Before-tax cost of debt:
4.38%
After-tax cost of debt:
3.46%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.46%
WACC is 17.92% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$66.74
Revenue growth rate per share of (3Y):
0.72
Annual revenue growth rate is -43.09% below industry average
EPS:
$3.01
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: -100.00%
Equity growth rate per share is 579.01% higher than the industry
Debt per share
$29.26
EBITDA per share
$6.90
Valuation Analysis Today of
GT
P/E Ratio:
4.09
P/E Ratio of Competitors/Peers:
975.1
P/E ratio is -99.58% lower than main peers & is -80.84% lower than the industry
Stock price/value with industry average P/E ratio: $64.27
GT is -78.89% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $358.71
Present value of the expected future dividends only: $2.07
P/S (Price to Sales ratio):
0.2
Price to sales ratio is -91.12% below the industry mean
P/B (Price to book value ratio):
0.72
-
-
Net income growth rate (3Y):
14.00%
Net income growth rate is -62.30% lower than the industry average net income growth rate
Dividend Analysis
-
Dividend yeild: 2.36%
Previous Dividend: $0.16
Previous adjusted dividend: $0.16
Previous Dividend: $0.32
-
-
Average dividend payment (long-term): $0.16
Average dividend increase/decrease (growth rate) % per period: 0.00%
-
-
-
Previous dividend payment date: 03/02/2020
Previous dividend record date: 02/03/2020
Previous dividend declaration date: 15/01/2020
Dividend History:
2020-01-31--$0.16
--$0.00
--$0.00
2019-10-31--$0.16
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
160.84%
Net debt to equity ratio:
162.25%
Debt to assets ratio:
36.58%
Net debt to assets ratio:
36.90%
Debt-to-asset ratio is -30.23% below industry average
Ability to repay debt:
Interest coverage ratio:
4.73
Interest coverage ratio is -89.10% less than industry average
Looking forward:
Debt growth rate:
-71.36%
Annual debt growth is -363% lower than industry average debt growth rate
Debt repayment rate in last quarter: 22.19%
Analysis of Key Statistics
Correlation of price movement with the market:
0.548
Statistical significance of correlation:
GT has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.534
Stock price is 2.52% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.534
Correlation of price movement with Nasdaq (^IXIC):
0.033
Covariance of price movement with the market:
0.079
Kurtosis
5.346
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:
-0.363
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
GT
Gross Profit Margin Ratio:
84%
Operating Profit Margin Ratio:
6.07%
Operating profit margin is -35.98% lower than the industry
Net Profit Margin Ratio:
84%
Effective Tax Rate:
-39.74%
Effective tax rate is -265.80% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
16.56%
Return on equity (ROE) is -22.73% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.77%
Return on assets (ROA) is -58.90% lower than the industry
Financial Leverage:
1.6x
Current Ratio:
1.23
Current ratio is -38.50% below industry average
Cash Conversion Cycle (days):
-37.1
Cash conversion cycle is -162.12% below industry average
The remaining useful life of property plant & equipment is: 5.4 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
262.2K
Each employee generates -19% less revenue than industry average revenue per employee
EBITDA generated per employee:
27.1K
Each employee generates -57% less EBITDA than industry average revenue per employee
Profit generated per employee:
11.8K
Each employee generates -65% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 13.7K
Each employee generates -307% less free cash flow than industry average revenue per employee
Assets/Capital per employee
195.3K
Each employee generates -307% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
GT
COLUMBIA SPORTSWEAR COMPANY (XNAS:COLM)
LIGHT & WONDER, INC. (XNAS:LNW)
TEXAS ROADHOUSE, INC. (XNAS:TXRH)
REYNOLDS CONSUMER PRODUCTS INC. (XNAS:REYN)
FOX FACTORY HOLDING CORP. (XNAS:FOXF)
BRP Inc. (XNAS:DOOO)
THE WENDY'S COMPANY (XNAS:WEN)
DRIVEN BRANDS HOLDINGS INC. (XNAS:DRVN)
GLOBAL-E ONLINE LTD (XNAS:GLBE)
Current Analyst Ratings
Strong buy�13%
Buy�17%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
18.88B
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:
14.91B
3.97B
-
-
2.82B
-
-
2.82B
64.00M
412.00M
930.00M
1.95B
1.15B
852.00M
614.00M
- 244000.00K
852.00M
Statement of Cash Flow
Date:
Period:
244.00M
Differed Income Tax :
3.00M
Stock Based Compensation :
-
Change in Working Capital :
- 1014000.00K
Accounts Receivables:
- 842000.00K
Other Working Capital:
- 31000.00K
Other Non-Cash Items:
- 40000.00K
Net Cash Provided by Operating Activities:
- 711000.00K
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 9000.00K
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
1.05B
-
1.05B
3.22B
4.03B
264.00M
8.56B
9.28B
1.01B
1.03B
-
1.58B
1.16B
14.06B
-
22.62B
4.34B
1.13B
-
-
1.48B
6.95B
8.28B
1.94B
10.36B
-
17.30B
282.00M
5.67B
- 3915000.0K
-
March 31, 2022 at 6:00:00 AM
17.73B
5.15B
22.45B
-
9.40B
8.3B
16.00M
- 307000.00K
- 300000.00K
- 2360000.00K
-
- 5000.00K
-
3.35B
982.00M
2.00M
- 27000.00K
1.14B
1.16B
- 711000.00K
- 276000.00K
- 987000.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
GT
2023
2024
2025
2026
2027
$15.28
$836.19
$936.86
$1,049.65
$1,176.01