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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Fate Therapeutics, Inc. (XNAS:FATE) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
FATE
Name:
FATE THERAPEUTICS, INC. (XNAS:FATE)
Sector:
- 74697.00K
Industry:
Biotechnology
CEO:
Mr. John Wolchko
Total Employees:
449
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 31.95% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF FATE THERAPEUTICS, INC.(FATE) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BIOTECHNOLOGY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
26.72
One Month Price Target:
$26.97
Six Month Price Target :
$28.22
Likely Price in One Year's Time:
Ticker:
$29.73
Likely Trading Range Today Under (Normal Volatility)
$26.54
Price Upper limit ($) :
$27.
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$23.95
This week:
$20.53
This month :
$14.35
Other Primary facts
Market Cap:
2.45B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
97.00M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
37.8%
-21.74%
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:
$39.55
$33.61
$13.89
$19.83
Medium risk (<10%) entry points
Buy Call
Sell Call
$31.68
Buy Put:
Sell Put:
$30.41
$21.75
$23.03
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
FATE
Sharpe Ratio:
3.36%
Comparison:
FATE, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 72.69% higher than the industry
& ratio is 47.32% higher than the market/S&P 500 average
Average Returns/Yield of
FATE
Daily returns:
0.18%
Weekly returns:
0.91%
Monthly returns:
3.62%
Yearly returns:
25.22%
Comparison of returns:
Average annual returns/yield (last 3 years) is 72.35% above industry average
Classification:
FATE, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.62
Statistical test of Returns:
FATE has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
5.13%
Weekly Volatility:
11.47%
Monthly Volatility:
22.95%
Yearly Volatility:
79.48%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.94%
Volatility in last five trading days has been -42.77% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-10.36%
Weekly VaR:
-23.16%
Monthly VaR:
-46.31%
How Much Can the price of
FATE
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-39%
Worst case (decline):
>85%
This translates to price declining to:
$16.33
This translates to price declining to:
$4.01
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
FATE is a 226.88% riskier investment compared to the market/S&P 500 & is 180.04% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 7.92% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
FATE
Beta in relation to market/S&P 500--1.67
Expected beta in 1 year's time:
1.161
Expected beta in 3 year's time:
1.642
Unlevered (debt free) Beta:
-
Beta in relation to Nasdaq (XNAS):
1.614
Beta in relation to all global stocks::
1.11
Beta Comparison & Analysis
Beta of competitors/peers::
1.314
Beta is 27.44% higher than peers
Average Industry Beta:
1.152
Beta is 45.34% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.289
Alpha is 103.43% above industry average alpha yield
Alpha is 1837% higher than market/& is unsustainably high
Analysis of Cost of Capital of
FATE
Equity cost of capital:
0.146
Equity cost of capital is 32.40% above industry mean WACC
Unlevered (without debt) cost of capital:
-
Before-tax cost of debt:
0.37%
After-tax cost of debt:
0.29%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.29%
WACC is 40.27% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$0.65
Revenue growth rate per share of (3Y):
4.09
Annual revenue growth rate is 22.85% above the industry average
EPS:
-$2.44
Expected Annual growth rate of EPS (3Y):
15.87%
Expected future EPS growth rate is 59.00% higher than the Biotechnology industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$1.11
EBITDA per share
-$2.32
Valuation Analysis Today of
FATE
P/E Ratio:
-
P/E Ratio of Competitors/Peers:
134.55
-
-
FATE is -112.20% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
41.06
Price to sales ratio is 1.38% above the industry mean
P/B (Price to book value ratio):
4.09
-
-
Net income growth rate (3Y):
117.29%
Net income growth rate is 66.17% 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:
17.04%
Net debt to equity ratio:
7.70%
Debt to assets ratio:
12.57%
Net debt to assets ratio:
5.68%
Debt-to-asset ratio is -70.17% below industry average
Ability to repay debt:
Interest coverage ratio:
-537.52
Interest coverage ratio is 354.20% more than industry average
Looking forward:
Debt growth rate:
18.01%
Annual debt growth is -87% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.486
Statistical significance of correlation:
FATE has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.34
Stock price is 42.83% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.34
Correlation of price movement with Nasdaq (^IXIC):
-0.063
Covariance of price movement with the market:
-0.187
Kurtosis
5.917
Returns have moderate 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:
0.775
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
FATE
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
-388.55%
Operating profit margin is -9.36% lower than the industry
Net Profit Margin Ratio:
100%
Effective Tax Rate:
-
-
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-36.75%
Return on equity (ROE) is -35.91% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-27.12%
Return on assets (ROA) is 32.90% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
7.69
Current ratio is -5.01% below industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 3.2 years
Stock based compensation to net income ratio:
-8.31%
In-depth Efficiency Analysis
Revenue generated per employee:
140.6K
Each employee generates -91% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 500.4K
Each employee generates -230% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 518.4K
Each employee generates -505% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 166.4K
Each employee generates -213% less free cash flow than industry average revenue per employee
Assets/Capital per employee
577.5K
Each employee generates -213% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 71.56%
Growth rate in R&D investment/expenditure is -2094.62% lower than the industry
Competitors/Peer firms of
FATE
XLRN
BridgeBio Pharma, Inc. (XNAS:BBIO)
Tilray Brands, Inc. (XNAS:TLRY)
CHANGE HEALTHCARE INC. (XNAS:CHNG)
MIRATI THERAPEUTICS, INC. (XNAS:MRTX)
SOTERA HEALTH COMPANY (XNAS:SHC)
ARROWHEAD PHARMACEUTICALS, INC. (XNAS:ARWR)
HALOZYME THERAPEUTICS, INC. (XNAS:HALO)
GWPH
Current Analyst Ratings
Strong buy�13%
Buy�13%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
63.12M
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:
-
17.07M
242.81M
65.56M
65.56M
-
-
308.37M
1.35M
418.00K
7.65M
- 224682.00K
- 245251.00K
- 232752.00K
- 232752.00K
-
- 232752.00K
Statement of Cash Flow
Date:
Period:
2.76M
Differed Income Tax :
-
Stock Based Compensation :
19.33M
Change in Working Capital :
- 11126.00K
Accounts Receivables:
- 5174.00K
Other Working Capital:
- 52.00K
Other Non-Cash Items:
- 9889.00K
Net Cash Provided by Operating Activities:
- 64613.00K
Investments in PP&E:
- 10084.00K
Net Acquisitions:
-
Purchases of Investments:
- 132166.00K
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
64.74M
509.03M
573.77M
13.85M
-
11.45M
599.08M
167.33M
-
-
67.94M
-
24.04M
259.31M
-
858.39M
11.44M
5.58M
-
22.58M
38.31M
77.91M
107.94M
16.61M
147.08M
-
224.99M
97.00K
- 834773.00K
- 2850.0K
1.47B
March 31, 2022 at 6:00:00 AM
308.37M
633.39M
858.39M
576.97M
113.52M
48.8M
135.22M
-
- 7026.00K
-
-
-
-
2.80M
2.80M
-
- 68842.00K
79.97M
148.81M
- 64613.00K
- 10084.00K
- 74697.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
FATE
2023
2024
2025
2026
2027
$29.82
$33.18
$36.91
$41.06
$45.68