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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
The Simply Good Foods Company (XNAS:SMPL) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SMPL
Name:
THE SIMPLY GOOD FOODS COMPANY (XNAS:SMPL)
Sector:
- 10206.00K
Industry:
Packaged Foods
CEO:
Mr. Joseph Scalzo
Total Employees:
263
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -139.82% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF THE SIMPLY GOOD FOODS COMPANY(SMPL) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND PACKAGED FOODS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
29.66
One Month Price Target:
$29.8
Six Month Price Target :
$30.47
Likely Price in One Year's Time:
Ticker:
$31.29
Likely Trading Range Today Under (Normal Volatility)
$29.53
Price Upper limit ($) :
$29.82
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$27.92
This week:
$25.77
This month :
$21.87
Other Primary facts
Market Cap:
2.97B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
100.37M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.58%
-13.38%
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:
$37.74
$34.03
$21.58
$25.29
Medium risk (<10%) entry points
Buy Call
Sell Call
$32.83
Buy Put:
Sell Put:
$32.04
$26.48
$27.28
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SMPL
Sharpe Ratio:
1.44%
Comparison:
SMPL, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 9.97% higher than the industry
& is -36.77% lower than the market/S&P 500 average
Average Returns/Yield of
SMPL
Daily returns:
0.05%
Weekly returns:
0.25%
Monthly returns:
1.01%
Yearly returns:
8.42%
Comparison of returns:
Average annual returns/yield (last 3 years) is 43.68% above industry average
Classification:
SMPL, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.66
Statistical test of Returns:
SMPL has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.88%
Weekly Volatility:
6.45%
Monthly Volatility:
12.89%
Yearly Volatility:
44.66%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.72%
Volatility in last five trading days has been -74.98% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.87%
Weekly VaR:
-13.13%
Monthly VaR:
-26.25%
How Much Can the price of
SMPL
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
-90.95%
This translates to price declining to:
$22.94
This translates to price declining to:
$2.69
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
SMPL is a 85.30% riskier investment compared to the market/S&P 500 & is 58.74% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 26.04% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SMPL
Beta in relation to market/S&P 500--0.82
Expected beta in 1 year's time:
0.705
Expected beta in 3 year's time:
0.997
Unlevered (debt free) Beta:
0.658
Beta in relation to Nasdaq (XNAS):
0.771
Beta in relation to all global stocks::
0.582
Beta Comparison & Analysis
Beta of competitors/peers::
0.806
Beta is 1.48% higher than peers
Average Industry Beta:
0.586
Beta is 39.56% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
5.32%
Sustainable growth rate is -41.28% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.033
Alpha is 166.47% above industry average alpha yield
Alpha is 213% higher than market/& is unsustainably high
Analysis of Cost of Capital of
SMPL
Equity cost of capital:
0.088
Equity cost of capital is 22.16% above industry mean WACC
Unlevered (without debt) cost of capital:
7.04%
Before-tax cost of debt:
5.55%
After-tax cost of debt:
4.39%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.39%
WACC is 38.59% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$11.50
Revenue growth rate per share of (3Y):
2.46
Annual revenue growth rate is 102.25% above the industry average
EPS:
$0.97
Expected Annual growth rate of EPS (3Y):
3.28%
Expected future EPS growth rate is -81.81% lower than the Packaged Foods industry
Free cash flow (FCF) per share:
$0.97
-
-
Debt per share
$4.25
EBITDA per share
$1.89
Valuation Analysis Today of
SMPL
P/E Ratio:
30.7
P/E Ratio of Competitors/Peers:
79.65
P/E ratio is -61.46% lower than main peers & is -20.56% lower than the industry
Stock price/value with industry average P/E ratio: $37.48
SMPL is -20.87% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.58
Price to sales ratio is 11.21% above the industry mean
P/B (Price to book value ratio):
2.46
Price to free cash flow: 30.64
Price to free cash flow ratio is 7.51% higher than the industry
Net income growth rate (3Y):
-57.23%
Net income growth rate is -631.92% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
35.30%
Net debt to equity ratio:
32.40%
Debt to assets ratio:
20.90%
Net debt to assets ratio:
19.18%
Debt-to-asset ratio is -61.23% below industry average
Ability to repay debt:
Interest coverage ratio:
7.99
Interest coverage ratio is -96.76% less than industry average
Looking forward:
Debt growth rate:
-23.75%
Annual debt growth is -109% lower than industry average debt growth rate
Debt repayment rate in last quarter: 5.55%
Analysis of Key Statistics
Correlation of price movement with the market:
0.51
Statistical significance of correlation:
SMPL has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.429
Stock price is 18.97% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.429
Correlation of price movement with Nasdaq (^IXIC):
0.031
Covariance of price movement with the market:
0.051
Kurtosis
3.2
Returns are, approximately, normally distributed (mesokurtic)
Skewness of returns:
0.229
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
SMPL
Gross Profit Margin Ratio:
156%
Operating Profit Margin Ratio:
17.33%
Operating profit margin is 259.04% higher than the industry
Net Profit Margin Ratio:
156%
Effective Tax Rate:
31.08%
Effective tax rate is -23.75% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
7.99%
Return on equity (ROE) is -27.64% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.73%
Return on assets (ROA) is 5.96% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
3.56
Current ratio is 29.83% above industry average
Cash Conversion Cycle (days):
33.3
Cash conversion cycle is -32.23% below industry average
The remaining useful life of property plant & equipment is: 16.4 years
Stock based compensation to net income ratio:
2.69%
In-depth Efficiency Analysis
Revenue generated per employee:
4.4M
Each employee generates 458% more revenue than industry average revenue per employee
EBITDA generated per employee:
721.4K
Each employee generates 540% more EBITDA than industry average revenue per employee
Profit generated per employee:
367.7K
Each employee generates 605% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 38.8K
Each employee generates 943% more free cash flow than industry average revenue per employee
Assets/Capital per employee
6.7M
Each employee generates 943% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
SMPL
J & J SNACK FOODS CORP. (XNAS:JJSF)
CELSIUS HOLDINGS, INC. (XNAS:CELH)
CENTRAL GARDEN & PET COMPANY (XNAS:CENTA)
Sprouts Farmers Market, Inc. (XNAS:SFM)
SANDERSON FARMS, INC. (XNAS:SAFM)
2U, INC. (XNAS:TWOU)
LAUREATE EDUCATION, INC. (XNAS:LAUR)
PRICESMART, INC. (XNAS:PSMT)
COCA-COLA CONSOLIDATED, INC. (XNAS:COKE)
Current Analyst Ratings
Strong buy�0%
Buy�13%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
5/28/22
Revenue:
1.15B
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:
706.18M
448.18M
-
105.25M
230.82M
125.57M
17.31M
248.13M
81.00K
23.73M
23.51M
189.72M
200.06M
96.69M
140.30M
43.61M
96.69M
Statement of Cash Flow
Date:
Period:
6.38M
Differed Income Tax :
6.69M
Stock Based Compensation :
2.61M
Change in Working Capital :
- 62606.00K
Accounts Receivables:
- 13993.00K
Other Working Capital:
- 1002.00K
Other Non-Cash Items:
18.45M
Net Cash Provided by Operating Activities:
- 7329.00K
Investments in PP&E:
- 2691.00K
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):
11/27/21
2022
Q1
35.45M
-
35.45M
125.20M
112.43M
14.56M
287.64M
17.42M
543.13M
1.14B
-
-
60.08M
1.76B
-
2.04B
44.81M
289.00K
-
-
35.67M
80.77M
427.02M
225.45M
752.96M
-
833.73M
961.00K
126.96M
- 858.0K
1.08B
November 27, 2021 at 12:00:00 AM
954.31M
1.21B
2.04B
-
427.31M
391.9M
-
- 1686.00K
- 4377.00K
- 25078.00K
- 3188.00K
-
-
- 2914.00K
- 27992.00K
- 200.00K
- 39898.00K
35.45M
75.35M
- 7329.00K
- 2877.00K
- 10206.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
SMPL
2023
2024
2025
2026
2027
$31.45
$49.79
$52.52
$55.41
$58.45