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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Western Alliance Bancorporation (XNYS:WAL) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WAL
Name:
WESTERN ALLIANCE BANCORPORATION (XNYS:WAL)
Sector:
622.90M
Industry:
Banks�Regional
CEO:
Mr. Kenneth Vecchione
Total Employees:
3,139
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 1911.72% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF WESTERN ALLIANCE BANCORPORATION(WAL) 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 ($) :
75.33
One Month Price Target:
$75.92
Six Month Price Target :
$78.85
Likely Price in One Year's Time:
Ticker:
$82.38
Likely Trading Range Today Under (Normal Volatility)
$74.96
Price Upper limit ($) :
$75.87
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$69.94
This week:
$63.27
This month :
$51.22
Other Primary facts
Market Cap:
7.88B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
108.28M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
23.65%
-22.28%
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:
$100.34
$88.78
$50.32
$61.88
Medium risk (<10%) entry points
Buy Call
Sell Call
$85.02
Buy Put:
Sell Put:
$82.55
$65.61
$68.11
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WAL
Sharpe Ratio:
2.88%
Comparison:
WAL, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 134.33% higher than the industry
& ratio is 26.29% higher than the market/S&P 500 average
Average Returns/Yield of
WAL
Daily returns:
0.11%
Weekly returns:
0.55%
Monthly returns:
2.21%
Yearly returns:
10.91%
Comparison of returns:
Average annual returns/yield (last 3 years) is 143.53% above industry average
Classification:
WAL, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.45
Statistical test of Returns:
WAL has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.54%
Weekly Volatility:
7.91%
Monthly Volatility:
15.83%
Yearly Volatility:
54.82%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.88%
Volatility in last five trading days has been -75.05% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.16%
Weekly VaR:
-16.00%
Monthly VaR:
-32.01%
How Much Can the price of
WAL
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-27%
Worst case (decline):
>85%
This translates to price declining to:
$54.97
This translates to price declining to:
$11.30
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
WAL is a 125.91% riskier investment compared to the market/S&P 500 & is 93.53% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 23.88% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WAL
Beta in relation to market/S&P 500--1.39
Expected beta in 1 year's time:
1.003
Expected beta in 3 year's time:
1.419
Unlevered (debt free) Beta:
0.151
Beta in relation to Nasdaq (XNAS):
0.979
Beta in relation to all global stocks::
0.965
Beta Comparison & Analysis
Beta of competitors/peers::
1.12
Beta is 24.33% higher than peers
Average Industry Beta:
0.964
Beta is 44.48% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
17.75%
Sustainable growth rate is 94.39% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.139
Alpha is 1096.74% above industry average alpha yield
Alpha is 884% higher than market/& is unsustainably high
Analysis of Cost of Capital of
WAL
Equity cost of capital:
0.127
Equity cost of capital is 30.11% above industry mean WACC
Unlevered (without debt) cost of capital:
1.38%
Before-tax cost of debt:
82.70%
After-tax cost of debt:
65.33%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
65.33%
WACC is 2527.39% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$18.34
Revenue growth rate per share of (3Y):
293.41
Annual revenue growth rate is 259.45% above the industry average
EPS:
$8.99
Expected Annual growth rate of EPS (3Y):
21.26%
Expected future EPS growth rate is 76.88% higher than the Banks�Regional industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$0.00
EBITDA per share
$12.71
Valuation Analysis Today of
WAL
P/E Ratio:
8.18
P/E Ratio of Competitors/Peers:
8.16
P/E ratio is 0.23% higher than main peers & is -34.06% lower than the industry
Stock price/value with industry average P/E ratio: $111.55
WAL is -32.47% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $30.79
Present value of the expected future dividends only: $16.76
P/S (Price to Sales ratio):
4.11
Price to sales ratio is -3.97% below the industry mean
P/B (Price to book value ratio):
293.41
-
-
Net income growth rate (3Y):
115.54%
Net income growth rate is 109.80% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 4.29%
Dividend yeild: 1.86%
Previous Dividend: $0.35
Previous adjusted dividend: $0.35
Previous Dividend: $1.40
Expected next dividend best case: $0.39
Expected next dividend worst case: $0.31
Average dividend payment (long-term): $0.29
Average dividend increase/decrease (growth rate) % per period: 4.00%
Expected next dividend payment date: 25/08/2022
Expected next dividend record date: 08/11/2022
Expected next dividend declaration date: 25/07/2022
Previous dividend payment date: 27/05/2022
Previous dividend record date: 13/05/2022
Previous dividend declaration date: 25/04/2022
Dividend History:
2022-05-12--$0.35
2021-11-18--$0.35
2021-05-13--$0.25
2022-02-17--$0.35
2021-08-12--$0.35
2021-02-18--$0.25
Dividend growth rate is -83.02% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
1028.09%
Net debt to equity ratio:
3.08%
Debt to assets ratio:
91.14%
Net debt to assets ratio:
547.16%
Debt-to-asset ratio is -45.26% below industry average
Ability to repay debt:
Interest coverage ratio:
10.74
Interest coverage ratio is 1196.12% more than industry average
Looking forward:
Debt growth rate:
194.43%
Annual debt growth is 61293% higher than industry average debt growth rate
Debt repayment rate in last quarter: 100.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.617
Statistical significance of correlation:
WAL has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.501
Stock price is 23.15% more 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):
0.014
Covariance of price movement with the market:
0.028
Kurtosis
9.375
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:
0.483
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
WAL
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
-
Effective Tax Rate:
20.22%
Effective tax rate is -6.15% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
18.83%
Return on equity (ROE) is 57.83% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3346.10%
Return on assets (ROA) is 145095.19% higher than the industry
Financial Leverage:
11.3x
Current Ratio:
0
Current ratio is -99.99% below industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 4.1 years
Stock based compensation to net income ratio:
1.04%
In-depth Efficiency Analysis
Revenue generated per employee:
632.7K
Each employee generates 67% more revenue than industry average revenue per employee
EBITDA generated per employee:
438.4K
Each employee generates 94% more EBITDA than industry average revenue per employee
Profit generated per employee:
300.6K
Each employee generates 112% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
198.4K
Each employee generates 139% more free cash flow than industry average revenue per employee
Assets/Capital per employee
2.5M
Each employee generates 139% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
WAL
CNA FINANCIAL CORPORATION (XNYS:CNA)
COMERICA INCORPORATED (XNYS:CMA)
SANTANDER CONSUMER USA HOLDINGS INC. (XNYS:SC)
APO-PA
AMERICAN FINANCIAL GROUP, INC. (XNYS:AFG)
LINCOLN NATIONAL CORPORATION (XNYS:LNC)
LUFAX HOLDING LTD (XNYS:LU)
INVESCO LTD. (XNYS:IVZ)
apo MultiAsset Mandat Protect PB
Current Analyst Ratings
Strong buy�13%
Buy�25%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.99B
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:
-
-
-
473.30M
490.60M
17.30M
-
28.40M
1.80B
128.10M
64.40M
1.38B
-
943.60M
1.19B
240.00M
943.60M
Statement of Cash Flow
Date:
Period:
23.40M
Differed Income Tax :
35.10M
Stock Based Compensation :
9.80M
Change in Working Capital :
765.10M
Accounts Receivables:
-
Other Working Capital:
- 154300.00K
Other Non-Cash Items:
- 447400.00K
Net Cash Provided by Operating Activities:
622.90M
Investments in PP&E:
-
Net Acquisitions:
- 50000.00K
Purchases of Investments:
- 66100.00K
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
600.00K
-
600.00K
-
-
-
600.00K
141.80M
40.00M
27.50M
6.85B
67.60M
-
7.76B
-
28.20M
-
154.90M
-
-
-
154.90M
-
-
-
-
400.00K
2.08B
2.97B
- 235100.0K
190.40M
March 31, 2022 at 6:00:00 AM
-
5.01B
5.01B
-
154.90M
154.3M
-
- 2481500.00K
- 2597600.00K
- 9500.00K
94.90M
-
- 40500.00K
4.02B
4.06B
-
2.09B
2.60B
516.40M
622.90M
-
622.90M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
WAL
2023
2024
2025
2026
2027
$96.03
$105.02
$114.84
$125.59
$137.34