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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
The Rmr Group Inc. (XNAS:RMR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
RMR
Name:
THE RMR GROUP INC. (XNAS:RMR)
Sector:
34.80M
Industry:
Real Estate Services
CEO:
Mr. Adam Portnoy
Total Employees:
37,000
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 201.87% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF THE RMR GROUP INC.(RMR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND REAL ESTATE SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
25.96
One Month Price Target:
$26.18
Six Month Price Target :
$27.26
Likely Price in One Year's Time:
Ticker:
$28.56
Likely Trading Range Today Under (Normal Volatility)
$25.83
Price Upper limit ($) :
$26.07
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$24.49
This week:
$22.67
This month :
$19.38
Other Primary facts
Market Cap:
813.66M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
31.50M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.2%
-17.87%
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:
$32.80
$29.71
$19.12
$22.21
Medium risk (<10%) entry points
Buy Call
Sell Call
$28.71
Buy Put:
Sell Put:
$28.05
$23.20
$23.87
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
RMR
Sharpe Ratio:
-1.89%
Comparison:
RMR, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -216.02% lower than the industry
& is -182.88% lower than the market/S&P 500 average
Average Returns/Yield of
RMR
Daily returns:
-0.04%
Weekly returns:
-0.21%
Monthly returns:
-0.86%
Yearly returns:
16.44%
Comparison of returns:
Average annual returns/yield (last 3 years) is -162.64% below industry average
Classification:
RMR, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.27
Statistical test of Returns:
RMR has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.74%
Weekly Volatility:
6.12%
Monthly Volatility:
12.25%
Yearly Volatility:
42.43%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.62%
Volatility in last five trading days has been -40.99% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.67%
Weekly VaR:
-12.67%
Monthly VaR:
-25.35%
How Much Can the price of
RMR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
-87.81%
This translates to price declining to:
$20.01
This translates to price declining to:
$3.17
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
RMR is a 78.90% riskier investment compared to the market/S&P 500 & is 53.27% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -21.91% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
RMR
Beta in relation to market/S&P 500--1.49
Expected beta in 1 year's time:
0.809
Expected beta in 3 year's time:
1.145
Unlevered (debt free) Beta:
1.327
Beta in relation to Nasdaq (XNAS):
0.656
Beta in relation to all global stocks::
0.716
Beta Comparison & Analysis
Beta of competitors/peers::
0.872
Beta is 70.78% higher than peers
Average Industry Beta:
1.462
Beta is 1.90% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.237
Alpha is -823.39% below industry average alpha yield
Alpha is -1506% below the market average
Analysis of Cost of Capital of
RMR
Equity cost of capital:
0.134
Equity cost of capital is 1.44% above industry mean WACC
Unlevered (without debt) cost of capital:
11.90%
Before-tax cost of debt:
0.20%
After-tax cost of debt:
0.16%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.16%
WACC is 46.31% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$22.16
Revenue growth rate per share of (3Y):
2.31
Annual revenue growth rate is -55.74% below industry average
EPS:
$2.21
Expected Annual growth rate of EPS (3Y):
-22.70%
Expected future EPS growth rate is -216.12% lower than the Real Estate Services industry
Free cash flow (FCF) per share:
$5.10
Balance sheet equity growth per share: 754.47%
Equity growth rate per share is 1124.64% higher than the industry
Debt per share
$0.90
EBITDA per share
$1.63
Valuation Analysis Today of
RMR
P/E Ratio:
11.96
P/E Ratio of Competitors/Peers:
140.6
P/E ratio is -91.49% lower than main peers & is -60.26% lower than the industry
Stock price/value with industry average P/E ratio: $66.53
RMR is -60.98% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.17
Price to sales ratio is -77.59% below the industry mean
P/B (Price to book value ratio):
2.31
Price to free cash flow: 5.09
-
Net income growth rate (3Y):
-63.26%
Net income growth rate is -262.29% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 17.26%
Dividend yeild: 31.43%
Previous Dividend: $0.40
Previous adjusted dividend: $0.40
Previous Dividend: $8.16
Expected next dividend best case: $2.06
Expected next dividend worst case: -$1.26
Average dividend payment (long-term): $0.98
Average dividend increase/decrease (growth rate) % per period: 150.25%
Expected next dividend payment date: 17/08/2022
Expected next dividend record date: 25/07/2022
Expected next dividend declaration date: 13/07/2022
Previous dividend payment date: 19/05/2022
Previous dividend record date: 25/04/2022
Previous dividend declaration date: 14/04/2022
Dividend History:
2022-04-22--$0.40
2021-10-22--$0.38
2021-07-23--$0.38
2022-01-21--$0.38
2021-09-02--$7.00
2021-04-23--$0.38
Dividend growth rate is 274.17% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
14.31%
Net debt to equity ratio:
-75.22%
Debt to assets ratio:
5.41%
Net debt to assets ratio:
-28.44%
Debt-to-asset ratio is -89.91% below industry average
Ability to repay debt:
Interest coverage ratio:
776.2
Interest coverage ratio is 2667.39% more than industry average
Looking forward:
Debt growth rate:
-6.50%
Annual debt growth is -103% 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:
0.552
Statistical significance of correlation:
RMR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.544
Stock price is 1.44% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.544
Correlation of price movement with Nasdaq (^IXIC):
0.023
Covariance of price movement with the market:
0.036
Kurtosis
6.123
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:
-0.471
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
RMR
Gross Profit Margin Ratio:
73%
Operating Profit Margin Ratio:
11.98%
Operating profit margin is 18.57% higher than the industry
Net Profit Margin Ratio:
73%
Effective Tax Rate:
14.40%
Effective tax rate is -24.17% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
18.37%
Return on equity (ROE) is 57.16% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
6.95%
Return on assets (ROA) is 43.95% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
3.02
Current ratio is -59.25% below industry average
Cash Conversion Cycle (days):
31.6
Cash conversion cycle is 331.21% above industry average
The remaining useful life of property plant & equipment is: 7.4 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
18.9K
Each employee generates -98% less revenue than industry average revenue per employee
EBITDA generated per employee:
1.4K
Each employee generates -99% less EBITDA than industry average revenue per employee
Profit generated per employee:
1.0K
Each employee generates -99% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.9K
Each employee generates -101% less free cash flow than industry average revenue per employee
Assets/Capital per employee
6.8K
Each employee generates -101% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
RMR
GOODM
GLADSTONE LAND CORPORATION (XNAS:LAND)
FRP HOLDINGS, INC. (XNAS:FRPH)
CREATIVE MEDIA & COMMUNITY TRUST CORPORATION. (XNAS:CMCTP)
IRSA Propiedades Comerciales SA (XNAS:IRCP)
Fathom Holdings Inc (XNAS:FTHM)
LANDSEA HOMES CORPORATION (XNAS:LSEA)
LMRKO
LMRKP
Current Analyst Ratings
Strong buy�4%
Buy�0%
Hold�13%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
697.95M
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:
571.56M
126.39M
-
40.65M
40.65M
-
962.00K
41.62M
448.00K
66.00K
962.00K
51.23M
83.62M
36.29M
96.57M
13.91M
36.29M
Statement of Cash Flow
Date:
Period:
236.00K
Differed Income Tax :
498.00K
Stock Based Compensation :
-
Change in Working Capital :
14.23M
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
11.96M
Net Cash Provided by Operating Activities:
34.97M
Investments in PP&E:
- 165.00K
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):
12/31/21
2022
Q1
181.89M
-
181.89M
83.91M
-
4.93M
270.73M
33.76M
-
-
40.67M
18.17M
156.98M
251.67M
-
522.40M
22.31M
5.06M
-
-
62.30M
89.67M
28.26M
50.60M
78.86M
-
168.53M
31.00K
86.96M
-
-
December 31, 2021 at 12:00:00 AM
613.18M
197.51M
366.04M
-
33.32M
- 148569.0K
-
-
- 165.00K
-
-
- 8.00K
- 6264.00K
- 6479.00K
- 12751.00K
-
22.05M
181.89M
159.84M
34.97M
- 165.00K
34.80M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
RMR
2023
2024
2025
2026
2027
$28.70
$91.32
$100.46
$110.52
$121.58