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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
World Acceptance Corporation (XNAS:WRLD) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WRLD
Name:
WORLD ACCEPTANCE CORPORATION (XNAS:WRLD)
Sector:
48.59M
Industry:
Credit Services
CEO:
Mr. Ravin Prashad
Total Employees:
3,121
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF WORLD ACCEPTANCE CORPORATION(WRLD) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CREDIT SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
109.55
One Month Price Target:
$110.43
Six Month Price Target :
$114.85
Likely Price in One Year's Time:
Ticker:
$120.15
Likely Trading Range Today Under (Normal Volatility)
$108.91
Price Upper limit ($) :
$110.42
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$100.54
This week:
$89.41
This month :
$69.27
Other Primary facts
Market Cap:
727.23M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
6.28M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
31.49%
-27.25%
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:
$151.33
$132.07
$67.77
$87.03
Medium risk (<10%) entry points
Buy Call
Sell Call
$125.80
Buy Put:
Sell Put:
$121.69
$93.25
$97.41
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WRLD
Sharpe Ratio:
2.48%
Comparison:
WRLD, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 33.17% higher than the industry
& ratio is 8.61% higher than the market/S&P 500 average
Average Returns/Yield of
WRLD
Daily returns:
0.11%
Weekly returns:
0.55%
Monthly returns:
2.19%
Yearly returns:
19.06%
Comparison of returns:
Average annual returns/yield (last 3 years) is 37.58% above industry average
Classification:
WRLD, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.54
Statistical test of Returns:
WRLD has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.06%
Weekly Volatility:
9.07%
Monthly Volatility:
18.14%
Yearly Volatility:
62.85%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.17%
Volatility in last five trading days has been -71.21% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-8.22%
Weekly VaR:
-18.39%
Monthly VaR:
-36.77%
How Much Can the price of
WRLD
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-31%
Worst case (decline):
>85%
This translates to price declining to:
$75.30
This translates to price declining to:
$16.43
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
WRLD is a 159.53% riskier investment compared to the market/S&P 500 & is 122.34% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 22.94% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WRLD
Beta in relation to market/S&P 500--1.44
Expected beta in 1 year's time:
1.176
Expected beta in 3 year's time:
1.663
Unlevered (debt free) Beta:
0.676
Beta in relation to Nasdaq (XNAS):
0.542
Beta in relation to all global stocks::
0.834
Beta Comparison & Analysis
Beta of competitors/peers::
0.937
Beta is 53.64% higher than peers
Average Industry Beta:
1.332
Beta is 8.10% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
19.63%
Sustainable growth rate is -41.82% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.132
Alpha is 94.64% above industry average alpha yield
Alpha is 841% higher than market/& is unsustainably high
Analysis of Cost of Capital of
WRLD
Equity cost of capital:
0.130
Equity cost of capital is 6.02% above industry mean WACC
Unlevered (without debt) cost of capital:
6.11%
Before-tax cost of debt:
5.99%
After-tax cost of debt:
4.74%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.74%
WACC is 4.69% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$87.39
Revenue growth rate per share of (3Y):
1.7
Annual revenue growth rate is -83.87% below industry average
EPS:
$8.47
Expected Annual growth rate of EPS (3Y):
45.99%
Expected future EPS growth rate is 83.54% higher than the Credit Services industry
Free cash flow (FCF) per share:
$41.73
-
-
Debt per share
$88.76
EBITDA per share
$17.36
Valuation Analysis Today of
WRLD
P/E Ratio:
24.22
P/E Ratio of Competitors/Peers:
9.57
P/E ratio is 153.20% higher than main peers & is 99.55% higher than the industry
Stock price/value with industry average P/E ratio: $102.80
WRLD is 6.56% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.25
Price to sales ratio is -75.88% below the industry mean
P/B (Price to book value ratio):
1.7
Price to free cash flow: 2.63
Price to free cash flow ratio is -89.70% lower than the industry
Net income growth rate (3Y):
120.35%
Net income growth rate is 645.09% higher than the average industry 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:
137.51%
Net debt to equity ratio:
135.44%
Debt to assets ratio:
54.47%
Net debt to assets ratio:
53.65%
Debt-to-asset ratio is -30.13% below industry average
Ability to repay debt:
Interest coverage ratio:
3.26
Interest coverage ratio is -66.79% less than industry average
Looking forward:
Debt growth rate:
-10.32%
Annual debt growth is -121% lower than industry average debt growth rate
Debt repayment rate in last quarter: 7.66%
Analysis of Key Statistics
Correlation of price movement with the market:
0.309
Statistical significance of correlation:
WRLD has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.561
Stock price is -44.93% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.561
Correlation of price movement with Nasdaq (^IXIC):
0.011
Covariance of price movement with the market:
0.027
Kurtosis
8.963
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:
0.229
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
WRLD
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
100%
Effective Tax Rate:
17.78%
Effective tax rate is -17.89% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
13.30%
Return on equity (ROE) is -68.63% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.27%
Return on assets (ROA) is -13.07% lower than the industry
Financial Leverage:
2.2x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 7.3 years
Stock based compensation to net income ratio:
7.76%
In-depth Efficiency Analysis
Revenue generated per employee:
175.9K
Each employee generates -76% less revenue than industry average revenue per employee
EBITDA generated per employee:
34.9K
Each employee generates -92% less EBITDA than industry average revenue per employee
Profit generated per employee:
17.3K
Each employee generates -93% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
15.6K
Each employee generates -73% less free cash flow than industry average revenue per employee
Assets/Capital per employee
0.0K
Each employee generates -73% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
WRLD
Washington Trust Bancorp, Inc. (XNAS:WASH)
BMTC GROUP INC. (XTSE:GBT)
REPUBLIC BANCORP, INC. (XNAS:RBCAA)
HOMESTREET, INC. (XNAS:HMST)
NATIONAL WESTERN LIFE GROUP, INC. (XNAS:NWLI)
NORTHFIELD BANCORP, INC. (XNAS:NFBK)
Univest Financial Corporation (XNAS:UVSP)
FTOC
MIDCAP FINANCIAL INVESTMENT CORPORATION (XNAS:MFIC)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�4%
Sell�8%
Strong sell�4%
Overall analyst sentiment is: Sell
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
548.96M
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:
-
138.41M
-
203.48M
221.78M
18.30M
13.89M
74.23M
485.67M
33.42M
10.04M
109.04M
-
53.92M
65.58M
11.66M
53.92M
Statement of Cash Flow
Date:
Period:
3.66M
Differed Income Tax :
- 2811.88K
Stock Based Compensation :
4.18M
Change in Working Capital :
- 1981.02K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
30.70M
Net Cash Provided by Operating Activities:
49.53M
Investments in PP&E:
- 915.58K
Net Acquisitions:
- 142.87K
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):
6/30/21
2022
Q1
8.39M
-
8.39M
-
-
-
-
114.25M
7.37M
22.34M
-
-
-
-
1.02B
1.02B
48.23M
-
12.41M
-
-
-
557.57M
-
557.57M
1.18B
618.21M
-
144.02M
-
-
June 30, 2021 at 6:00:00 AM
140.85M
405.47M
1.02B
-
557.57M
549.2M
-
- 98953.88K
- 100012.33K
- 46254.62K
-
- 21082.86K
-
110.46M
43.13M
-
- 7359.13K
8.39M
15.75M
49.53M
- 932.35K
48.59M
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
WRLD
2023
2024
2025
2026
2027
$120.75
$196.91
$215.97
$236.87
$259.79