Will Capstone Green (USA Stocks:CGRN) decline in September?
 | By Vlad Skutelnik | Macroaxis Story |
Capstone Green Energy, a notable player in the Specialty Industrial Machinery industry, has been experiencing significant volatility in its stock price. However, as this high volatility begins to stabilize, the company presents an attractive investment opportunity. With a market value of approximately $0.59 billion, Capstone's stock has been under the close watch of analysts who have a strong buy consensus on the stock. Despite the company's fiscal year ending in March with a loss, the future looks promising. The lowest estimated target price by analysts stands at $8, while the highest estimated target price reaches up to $16. This wide range of estimates reflects the potential upside that Capstone's stock holds, with an average estimated target price of $12. Moreover, the company's real value is estimated to be around $3.44, indicating a potential undervaluation in the market. The valuation hype value of 0.58 further underscores the heightened interest in Capstone's stock among investors. With a total of 2 estimates and 1 strong buy recommendation from analysts, Capstone Green Energy is gaining traction in the Industrials category, specifically within the Machinery service category. As the stock's volatility begins to stabilize, now may be an opportune time to consider investing in Capstone Green Energy. Capstone Green Energy currently does not generate positive expected returns and assumes a 7.3874% risk (volatility on return distribution) over a 60-day horizon. As many investors are showing interest in the machinery space, it's appropriate to revisit Capstone Green Energy. We will focus on why some insiders are closely monitoring Capstone Green's volatility. Recent risk factors associated with Capstone may impact the stock's value, as we currently estimate Capstone Green as undervalued. The real value is approaching $3.44 per share.
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Reviewed by Michael Smolkin
Capstone Green Energy, a player in the Specialty Industrial Machinery industry, has been a volatile stock, but recent trends suggest a stabilization that could make it an attractive investment opportunity. The stock's Mean Deviation of 4.81 and Standard Deviation of 7.26 highlight its historical volatility, but the recent Price Change of just 0.13 suggests a calming trend. Despite a Maximum Drawdown of 44.05 and a negative Jensen Alpha of 1.04, indicating past losses, the stock's Price Percent Change of 28.26 shows a recent upward trend. Moreover, the stock's Potential Upside of 8.64 further underscores its investment appeal. Investors should, however, be mindful of the stock's negative Risk Adjusted Performance of 0.07 and Total Risk Alpha of 1.53, which indicate potential risks.
Advanced assessment of Capstone
Capstone Green Energy currently has $57.43 million in liabilities. The company's current ratio stands at 1.76, which falls within the standard range for its sector. Debt can be beneficial for Capstone Green Energy, provided it can manage to pay it off either through new capital or free cash flow. If the company fails to meet its legal debt repayment obligations, its shareholders could potentially lose their entire investment. However, a more common scenario is when companies like Capstone Green Energy issue additional shares at low prices, leading to the dilution of existing shareholders' stakes. In such cases, debt can be a more effective tool for Capstone to invest in high-return growth opportunities. When evaluating Capstone Green's debt, it should always be considered in conjunction with its cash and equity positions. The company has a Beta (market volatility) of 1.7357, indicating a somewhat significant risk relative to the market. As the market rises, the company is expected to outperform it. However, if the market experiences negative returns, Capstone Green is likely to underperform. Capstone Green Energy is projected to return -0.73%. Therefore, it's essential to confirm Capstone Green Energy's variance and potential upside to determine if its past performance will be replicated at some point in the near future.Volatility is a rate at which the price of Capstone Green or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Capstone Green may increase or decrease. In other words, similar to Capstone's beta indicator, it measures the risk of Capstone Green and helps estimate the fluctuations that may happen in a short period of time. So if prices of Capstone Green fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.
Watch out for price decline
Please consider monitoring Capstone Green on a daily basis if you are holding a position in it. Capstone Green is trading at a penny-stock level, and the possibility of delisting is much higher compared to other delisted stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Capstone Green stock to be traded above the $1 level to remain listed. If Capstone Green stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How important is Capstone Green's Liquidity
Capstone Green financial leverage refers to using borrowed capital as a funding source to finance Capstone Green Energy ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Capstone Green financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Capstone Green's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Capstone Green's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Capstone Green's total debt and its cash.
A Deeper Perspective
The big decline in price over the last few months for Capstone Green Energy could raise concerns from insiders as the firm is trading at a share price of 0.59 on very low momentum in volume. The company management teams failed to add value to investors and position the firm supply of money to exploit market volatility in July. However, diversifying your holdings with Capstone Green Energy or similar stocks can still protect your portfolios during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 7.39. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Capstone Green partners. Capstone Green Energy, a prominent player in the Specialty Industrial Machinery industry, has seen significant volatility in its stock performance. However, recent trends suggest a stabilization of this high volatility, making it an attractive investment opportunity. The company, listed on NASDAQ, has a market capitalization of 10.83M and a current valuation of 56.1M.Despite a risk-adjusted performance of -0.07 and a market risk-adjusted performance of -0.54, the company has a potential upside of 8.64. The company ended its fiscal year in March with total assets amounting to 100.77M, including cash and equivalents of 16.91M. The book value per share stands at 0.06X, while the price to book ratio is 4.74X. The company's current ratio is 1.80X, indicating its ability to meet short-term obligations. However, investors should be cautious as the company's probability of bankruptcy stands at a high 96.00%. The company also has a significant total debt of 57.43M. Despite these risks, the stabilization of the stock's volatility may present an attractive opportunity for investors willing to take on a higher level of risk. .
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