Is Charah Solutions (USA Stocks:CHRA) ready for a correction?

Summary

CHRADelisted Stock

USD 5.67 0.01 0.18%

Macroaxis Story

While many traders are getting carried away by overanalyzing commercial services & supplies space, it is reasonable to go over Charah Solutions. Why are we still confident in anticipation of a complete recovery. Is the firm valuation sustainable? Here I will cover a perspective on valuation of Charah to give you a better outlook on taking a position in this stock.

Published over a week ago

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Reviewed by Rifka Kats

The company currently holds 133.66 M in liabilities with Debt to Equity (D/E) ratio of 4.88, indicating Charah Solutions may have difficulties to generate enough cash to satisfy its financial obligations. Charah Solutions has a current ratio of 1.05, suggesting that it is in a questionable position to pay out its financial obligations when due. Debt can assist Charah Solutions until it has trouble settling it off, either with new capital or with free cash flow. So, Charah Solutions' shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Charah Solutions sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Charah to invest in growth at high rates of return. When we think about Charah Solutions' use of debt, we should always consider it together with cash and equity.

The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Charah Solutions has an asset utilization ratio of 85.21 percent. This suggests that the company is making $0.85 for each dollar of assets. An increasing asset utilization means that Charah Solutions is more efficient with each dollar of assets it utilizes for everyday operations.

Is Charah Solutions (USA Stocks:CHRA) ready for a correction?

We determine the current worth of Charah Solutions using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Charah Solutions based exclusively on its fundamental and basic technical indicators. By analyzing Charah Solutions's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Charah Solutions's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Charah Solutions. We calculate exposure to Charah Solutions's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Charah Solutions's related companies.

Charah Solutions Investment Alerts

Charah investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Charah Solutions performance across your portfolios.Please check all investment alerts for Charah

Charah Solutions Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Charah value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Charah Solutions competition to find correlations between indicators driving the intrinsic value of Charah.

How does Charah utilize its cash?

To perform a cash flow analysis of Charah Solutions, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Charah Solutions is receiving and how much cash it distributes out in a given period. The Charah Solutions cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

Charah Solutions Net Cash Flow from Operations is projected to decrease significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at (9.15 Million)

A Deeper Perspective

The entity reported the previous year's revenue of 293.22 M. Net Loss for the year was (5.8 M) with profit before overhead, payroll, taxes, and interest of 25.9 M.

Margins Breakdown

Charah profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Charah Solutions itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Charah Solutions profit margins.

	Operating Margin	(8.94)
	EBITDA Margin	0.0862
	Gross Margin	0.0996
	Profit Margin	(0.0486)

Charah Solutions Earnings Before Interest Taxes and Depreciation Amortization USD is decreasing over the last 8 years. Charah Solutions Earnings Before Interest Taxes and Depreciation Amortization USD is decreasing over the last 8 years. The current value of Charah Solutions Earnings Before Interest Taxes and Depreciation Amortization USD is 28,775,755.

Some Charah technical indicators suggest turnaround

The expected short fall is down to -9.56 as of today.

Charah Solutions is displaying above-average volatility over the selected time horizon. Investors should scrutinize Charah Solutions independently to ensure intended market timing strategies are aligned with expectations about Charah Solutions volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Charah Solutions' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Charah Solutions' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

The Current Takeaway on Charah Solutions Investment

Whereas some other companies under the waste management industry are still a bit expensive, Charah Solutions may offer a potential longer-term growth to investors. The inconsistency in the assessment between current Charah valuation and our trade advice on Charah Solutions is due to the recent market swings and your selection of investing horizon. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Charah Solutions.

Editorial Staff

Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management. View Profile

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Charah Solutions. Please refer to our Terms of Use for any information regarding our disclosure principles.

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