_edited.png)
RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Westinghouse Air Brake Technologies Corporation (XNYS:WAB) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WAB
Name:
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION (XNYS:WAB)
Sector:
141.00M
Industry:
Railroads
CEO:
Mr. Rafael Santana
Total Employees:
25,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 0.39% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION(WAB) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RAILROADS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
86.39
One Month Price Target:
$87.12
Six Month Price Target :
$90.8
Likely Price in One Year's Time:
Ticker:
$95.2
Likely Trading Range Today Under (Normal Volatility)
$86.06
Price Upper limit ($) :
$86.81
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$81.88
This week:
$76.31
This month :
$66.23
Other Primary facts
Market Cap:
15.88B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
181.87M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.24%
-18.22%
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:
$107.31
$97.70
$65.47
$75.08
Medium risk (<10%) entry points
Buy Call
Sell Call
$94.57
Buy Put:
Sell Put:
$92.51
$78.19
$80.27
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WAB
Sharpe Ratio:
1.76%
Comparison:
WAB, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -20.27% lower than the industry
& is -22.91% lower than the market/S&P 500 average
Average Returns/Yield of
WAB
Daily returns:
0.05%
Weekly returns:
0.27%
Monthly returns:
1.08%
Yearly returns:
13.71%
Comparison of returns:
Average annual returns/yield (last 3 years) is -5.51% below industry average
Classification:
WAB, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.92
Statistical test of Returns:
WAB has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.57%
Weekly Volatility:
5.74%
Monthly Volatility:
11.48%
Yearly Volatility:
39.78%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.43%
Volatility in last five trading days has been -83.30% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.22%
Weekly VaR:
-11.67%
Monthly VaR:
-23.34%
How Much Can the price of
WAB
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-80.86%
This translates to price declining to:
$69.09
This translates to price declining to:
$16.54
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
WAB is a 64.74% riskier investment compared to the market/S&P 500 & is 41.13% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 15.89% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WAB
Beta in relation to market/S&P 500--1.52
Expected beta in 1 year's time:
0.932
Expected beta in 3 year's time:
1.318
Unlevered (debt free) Beta:
1.147
Beta in relation to Nasdaq (XNAS):
0.786
Beta in relation to all global stocks::
0.821
Beta Comparison & Analysis
Beta of competitors/peers::
1.228
Beta is 23.63% higher than peers
Average Industry Beta:
1.292
Beta is 17.48% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
3.94%
Sustainable growth rate is -75.43% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.006
Alpha is -135.23% below industry average alpha yield
Alpha is -38% below the market average
Analysis of Cost of Capital of
WAB
Equity cost of capital:
0.136
Equity cost of capital is 12.89% above industry mean WACC
Unlevered (without debt) cost of capital:
10.23%
Before-tax cost of debt:
4.07%
After-tax cost of debt:
3.21%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.21%
WACC is 28.73% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$43.54
Revenue growth rate per share of (3Y):
1.56
Annual revenue growth rate is -363.31% below industry average
EPS:
$3.16
Expected Annual growth rate of EPS (3Y):
15.72%
Expected future EPS growth rate is 99.41% higher than the Railroads industry
Free cash flow (FCF) per share:
$4.38
Balance sheet equity growth per share: 0.49%
Equity growth rate per share is -97.81% lower than the industry
Debt per share
$23.23
EBITDA per share
$7.70
Valuation Analysis Today of
WAB
P/E Ratio:
25.35
P/E Ratio of Competitors/Peers:
15.56
P/E ratio is 62.95% higher than main peers & is 19.23% higher than the industry
Stock price/value with industry average P/E ratio: $67.18
WAB is 28.59% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $15.04
Present value of the expected future dividends only: $5.01
P/S (Price to Sales ratio):
1.98
Price to sales ratio is -61.78% below the industry mean
P/B (Price to book value ratio):
1.56
Price to free cash flow: 19.72
Price to free cash flow ratio is -15.71% lower than the industry
Net income growth rate (3Y):
-4.37%
Net income growth rate is -127.00% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 4.71%
Dividend yeild: 0.63%
Previous Dividend: $0.15
Previous adjusted dividend: $0.15
Previous Dividend: $0.54
Expected next dividend best case: $0.16
Expected next dividend worst case: $0.14
Average dividend payment (long-term): $0.13
Average dividend increase/decrease (growth rate) % per period: 2.50%
Expected next dividend payment date: 25/08/2022
Expected next dividend record date: 18/08/2022
Expected next dividend declaration date: 08/09/2022
Previous dividend payment date: 27/05/2022
Previous dividend record date: 20/05/2022
Previous dividend declaration date: 05/11/2022
Dividend History:
2022-05-19--$0.15
2021-11-12--$0.12
2021-05-06--$0.12
2022-02-24--$0.15
2021-08-12--$0.12
2021-02-11--$0.12
Dividend growth rate is -56.95% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
42.04%
Net debt to equity ratio:
37.33%
Debt to assets ratio:
22.91%
Net debt to assets ratio:
20.34%
Debt-to-asset ratio is -63.84% below industry average
Ability to repay debt:
Interest coverage ratio:
8.13
Interest coverage ratio is 2.42% more than industry average
Looking forward:
Debt growth rate:
-4.28%
Annual debt growth is -262% lower than industry average debt growth rate
Debt repayment rate in last quarter: 30.07%
Analysis of Key Statistics
Correlation of price movement with the market:
0.682
Statistical significance of correlation:
WAB has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.743
Stock price is -8.20% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.743
Correlation of price movement with Nasdaq (^IXIC):
0.035
Covariance of price movement with the market:
0.052
Kurtosis
6.816
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:
-0.325
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
WAB
Gross Profit Margin Ratio:
123%
Operating Profit Margin Ratio:
11.66%
Operating profit margin is -49.82% lower than the industry
Net Profit Margin Ratio:
123%
Effective Tax Rate:
22.92%
Effective tax rate is -3.81% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
5.92%
Return on equity (ROE) is -76.01% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.22%
Return on assets (ROA) is -56.84% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
1.36
Current ratio is 19.39% above industry average
Cash Conversion Cycle (days):
29.1
Cash conversion cycle is -46.54% below industry average
The remaining useful life of property plant & equipment is: 1.7 years
Stock based compensation to net income ratio:
1.68%
In-depth Efficiency Analysis
Revenue generated per employee:
316.8K
Each employee generates -45% less revenue than industry average revenue per employee
EBITDA generated per employee:
56.0K
Each employee generates -80% less EBITDA than industry average revenue per employee
Profit generated per employee:
23.8K
Each employee generates -84% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
5.6K
Each employee generates -83% less free cash flow than industry average revenue per employee
Assets/Capital per employee
581.1K
Each employee generates -83% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
WAB
JACOBS SOLUTIONS INC. (XNYS:J)
AVERY DENNISON CORPORATION (XNYS:AVY)
IDEX CORPORATION (XNYS:IEX)
KSU-P
HEI-A
HeidelbergCement AG (XFRA:HEI)
AerCap Holdings NV (XNYS:AER)
China Southern Airlines Company Limited (XNYS:ZNH)
MASCO CORPORATION (XNYS:MAS)
Current Analyst Ratings
Strong buy�17%
Buy�8%
Hold�29%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
7.92B
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:
5.49B
2.43B
183.30M
-
1.03B
-
290.50M
1.51B
-
172.40M
455.60M
1.40B
923.40M
594.60M
778.80M
178.50M
594.60M
Statement of Cash Flow
Date:
Period:
122.00M
Differed Income Tax :
-
Stock Based Compensation :
10.00M
Change in Working Capital :
- 111000.00K
Accounts Receivables:
-
Other Working Capital:
- 65000.00K
Other Non-Cash Items:
- 10000.00K
Net Cash Provided by Operating Activities:
161.00M
Investments in PP&E:
- 20000.00K
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):
3/31/22
2022
Q1
488.00M
-
488.00M
1.38B
1.83B
213.00M
3.91B
1.47B
8.57B
3.63B
-
-
860.00M
14.53B
-
18.44B
1.06B
14.00M
-
624.00M
1.18B
2.88B
4.23B
941.00M
5.47B
-
8.35B
2.00M
4.18B
- 449000.0K
-
March 31, 2022 at 6:00:00 AM
7.00B
10.05B
18.40B
-
4.24B
3.8B
-
2.00M
- 18000.00K
- 1817000.00K
-
- 296000.00K
- 28000.00K
2.01B
- 133000.00K
5.00M
15.00M
488.00M
473.00M
161.00M
- 20000.00K
141.00M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
WAB
2023
2024
2025
2026
2027
$96.90
$106.78
$117.68
$129.69
$142.92