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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
West Pharmaceutical Services, Inc. (XNYS:WST) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WST
Name:
WEST PHARMACEUTICAL SERVICES, INC. (XNYS:WST)
Sector:
85.40M
Industry:
Medical Instruments & Supplies
CEO:
Mr. Eric Green
Total Employees:
10,065
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -481.89% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF WEST PHARMACEUTICAL SERVICES, INC.(WST) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND MEDICAL INSTRUMENTS & SUPPLIES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
291.35
One Month Price Target:
$293.28
Six Month Price Target :
$302.91
Likely Price in One Year's Time:
Ticker:
$314.47
Likely Trading Range Today Under (Normal Volatility)
$290.66
Price Upper limit ($) :
$292.75
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$279.1
This week:
$263.95
This month :
$236.55
Other Primary facts
Market Cap:
21.55B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
74.05M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
10.17%
-10.7%
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:
$348.12
$321.51
$234.58
$261.19
Medium risk (<10%) entry points
Buy Call
Sell Call
$312.85
Buy Put:
Sell Put:
$307.16
$269.78
$275.54
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WST
Sharpe Ratio:
5.37%
Comparison:
WST, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 235.60% higher than the industry
& ratio is 135.76% higher than the market/S&P 500 average
Average Returns/Yield of
WST
Daily returns:
0.12%
Weekly returns:
0.61%
Monthly returns:
2.44%
Yearly returns:
14.68%
Comparison of returns:
Average annual returns/yield (last 3 years) is 99.55% above industry average
Classification:
WST, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.77
Statistical test of Returns:
WST has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.11%
Weekly Volatility:
4.71%
Monthly Volatility:
9.42%
Yearly Volatility:
32.64%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.93%
Volatility in last five trading days has been -55.70% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.21%
Weekly VaR:
-9.40%
Monthly VaR:
-18.81%
How Much Can the price of
WST
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-15%
Worst case (decline):
-65.15%
This translates to price declining to:
$246.99
This translates to price declining to:
$101.53
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
WST is a 32.74% riskier investment compared to the market/S&P 500 & is 13.72% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -27.42% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WST
Beta in relation to market/S&P 500--1.18
Expected beta in 1 year's time:
0.773
Expected beta in 3 year's time:
1.093
Unlevered (debt free) Beta:
1.07
Beta in relation to Nasdaq (XNAS):
0.714
Beta in relation to all global stocks::
0.552
Beta Comparison & Analysis
Beta of competitors/peers::
0.875
Beta is 35.05% higher than peers
Average Industry Beta:
0.989
Beta is 19.38% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
28.51%
Sustainable growth rate is 94.02% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.181
Alpha is 279.73% above industry average alpha yield
Alpha is 1150% higher than market/& is unsustainably high
Analysis of Cost of Capital of
WST
Equity cost of capital:
0.112
Equity cost of capital is 13.23% above industry mean WACC
Unlevered (without debt) cost of capital:
10.19%
Before-tax cost of debt:
2.57%
After-tax cost of debt:
2.03%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
2.03%
WACC is 18.24% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$38.91
Revenue growth rate per share of (3Y):
9.27
Annual revenue growth rate is 27.20% above the industry average
EPS:
$8.97
Expected Annual growth rate of EPS (3Y):
38.35%
Expected future EPS growth rate is 231.66% higher than the Medical Instruments & Supplies industry
Free cash flow (FCF) per share:
$5.04
Balance sheet equity growth per share: 21.38%
Equity growth rate per share is 8156.37% higher than the industry
Debt per share
$3.74
EBITDA per share
$12.36
Valuation Analysis Today of
WST
P/E Ratio:
32.43
P/E Ratio of Competitors/Peers:
38.82
P/E ratio is -16.45% lower than main peers & is -34.99% lower than the industry
Stock price/value with industry average P/E ratio: $447.51
WST is -34.90% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $21.37
Present value of the expected future dividends only: $7.16
P/S (Price to Sales ratio):
7.49
Price to sales ratio is 0.98% above the industry mean
P/B (Price to book value ratio):
9.27
Price to free cash flow: 57.83
-
Net income growth rate (3Y):
219.86%
Net income growth rate is -308.06% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 1.96%
Dividend yeild: 0.24%
Previous Dividend: $0.18
Previous adjusted dividend: $0.18
Previous Dividend: $0.71
Expected next dividend best case: $0.19
Expected next dividend worst case: $0.17
Average dividend payment (long-term): $0.17
Average dividend increase/decrease (growth rate) % per period: 1.21%
Expected next dividend payment date: 08/02/2022
Expected next dividend record date: 19/07/2022
Expected next dividend declaration date: 24/05/2022
Previous dividend payment date: 05/04/2022
Previous dividend record date: 20/04/2022
Previous dividend declaration date: 23/02/2022
Dividend History:
2022-04-19--$0.18
2021-11-09--$0.18
2021-04-20--$0.17
2022-01-18--$0.18
2021-07-20--$0.17
2021-01-19--$0.17
Dividend growth rate is -161.26% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
11.92%
Net debt to equity ratio:
-14.47%
Debt to assets ratio:
8.41%
Net debt to assets ratio:
-10.21%
Debt-to-asset ratio is -76.56% below industry average
Ability to repay debt:
Interest coverage ratio:
107.69
Interest coverage ratio is 51.82% more than industry average
Looking forward:
Debt growth rate:
-0.12%
Annual debt growth is -100% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.22%
Analysis of Key Statistics
Correlation of price movement with the market:
0.585
Statistical significance of correlation:
WST has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.505
Stock price is 15.87% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.505
Correlation of price movement with Nasdaq (^IXIC):
-0.052
Covariance of price movement with the market:
-0.063
Kurtosis
3.1
Returns are, approximately, normally distributed (mesokurtic)
Skewness of returns:
0.125
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
WST
Gross Profit Margin Ratio:
165%
Operating Profit Margin Ratio:
26.60%
Operating profit margin is 98.74% higher than the industry
Net Profit Margin Ratio:
165%
Effective Tax Rate:
13.09%
Effective tax rate is -60.18% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
29.42%
Return on equity (ROE) is -164.53% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
20.77%
Return on assets (ROA) is 190.04% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
2.89
Current ratio is -20.83% below industry average
Cash Conversion Cycle (days):
32.4
Cash conversion cycle is -38.48% below industry average
The remaining useful life of property plant & equipment is: 9.6 years
Stock based compensation to net income ratio:
0.80%
In-depth Efficiency Analysis
Revenue generated per employee:
286.2K
Each employee generates -19% less revenue than industry average revenue per employee
EBITDA generated per employee:
90.9K
Each employee generates -18% less EBITDA than industry average revenue per employee
Profit generated per employee:
68.0K
Each employee generates -12% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
8.5K
Each employee generates -247% less free cash flow than industry average revenue per employee
Assets/Capital per employee
159.4K
Each employee generates -247% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 12.58%
Growth rate in R&D investment/expenditure is 4758.56% higher than the industry
Competitors/Peer firms of
WST
AMERISOURCEBERGEN CORPORATION (XNYS:ABC)
LABORATORY CORPORATION OF AMERICA HOLDINGS (XNYS:LH)
ZIMMER BIOMET HOLDINGS, INC. (XNYS:ZBH)
STERIS PUBLIC LIMITED COMPANY (XNYS:STE)
RESMED INC. (XNYS:RMD)
PERKINELMER, INC. (XNYS:PKI)
METTLER-TOLEDO INTERNATIONAL INC. (XNYS:MTD)
VEEVA SYSTEMS INC. (XNYS:VEEV)
WATERS CORPORATION (XNYS:WAT)
Current Analyst Ratings
Strong buy�13%
Buy�4%
Hold�8%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
2.88B
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:
1.69B
1.19B
55.20M
-
366.00M
-
-
421.20M
1.20M
8.50M
122.80M
915.40M
766.40M
684.40M
761.80M
99.70M
684.40M
Statement of Cash Flow
Date:
Period:
29.60M
Differed Income Tax :
-
Stock Based Compensation :
5.50M
Change in Working Capital :
- 50200.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
- 7500.00K
Net Cash Provided by Operating Activities:
151.20M
Investments in PP&E:
-
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):
3/31/22
2022
Q1
667.70M
-
667.70M
498.70M
416.50M
107.60M
1.69B
1.14B
108.80M
21.80M
208.10M
66.40M
57.60M
1.60B
-
3.29B
248.20M
54.00M
34.70M
-
282.60M
584.80M
277.20M
103.20M
383.70M
-
968.50M
18.80M
2.62B
- 182400.0K
- 127500.00K
March 31, 2022 at 6:00:00 AM
2.11B
2.33B
3.29B
-
331.20M
- 336500.0K
-
- 68300.00K
- 68300.00K
- 600.00K
-
- 165900.00K
- 13400.00K
7.20M
- 172700.00K
- 5100.00K
- 94900.00K
667.70M
762.60M
151.20M
- 65800.00K
85.40M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
WST
2023
2024
2025
2026
2027
$316.04
$450.77
$486.54
$525.16
$566.83