Digirad Story

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DRAD -- USA Stock  

USD 3.09  0.36  10.43%

Digirad Enterprise Value is projected to increase significantly based on the last few years of reporting. The past year's Enterprise Value was at 34.51 Million. The current year Market Capitalization is expected to grow to about 4.9 M, whereas Earnings Before Interest Taxes and Depreciation Amortization EBITDA are forecasted to decline to about 4.7 M. Today's short post will digest Digirad as your potential position. We will discuss the question of why shareholders should continue to be confident in Digirad outlook.
Published over three weeks ago
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Are Digirad (NASDAQ:DRAD) shareholders starting to hold back?
Digirad has a beta of 1.0053. Let's try to break down what Digirad's beta means in this case. As returns on the market increase, Digirad returns are expected to increase less than the market. However, during the bear market, the loss on holding Digirad will be expected to be smaller as well. The beta indicator helps investors understand whether Digirad moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Digirad deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns.
There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as Digirad. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.

Predictive Modules for Digirad

Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Digirad's stock price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Digirad in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Digirad. Your research has to be compared to or analyzed against Digirad's peers to derive any actionable benefits. When done correctly, Digirad's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Digirad.

How important is Digirad's Liquidity

Digirad financial leverage refers to using borrowed capital as a funding source to finance Digirad ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Digirad 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. Please check the breakdown between Digirad's total debt and its cash.

How Digirad utilizes its cash?

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

A Deeper Perspective

The latest price surge of Digirad could raise concerns from shareholders as the firm it trading at a share price of 3.59 on very low momentum in volume. The company management teams may have good odds in positioning the firm resources to exploit market volatility in February. The stock standard deviation of daily returns for 30 days investing horizon is currently 5.28. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Digirad partners.

Returns Breakdown

Return on Assets(0.0838)
Return on Equity(0.22)
Return Capital(0.0893)
Return on Sales(0.0422)

Our perspective of the latest Digirad surge

Standard deviation is down to 5.18. It may indicate a possible volatility dip. Digirad shows above-average downside volatility for the selected time horizon. We advise investors to inspect Digirad further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Digirad future alpha.

Our Conclusion on Digirad

Although some other entities under the medical devices industry are still a bit expensive, Digirad may offer a potential longer-term growth to shareholders. In closing, as of the 2nd of January 2021, our analysis shows that Digirad almost mirrors the market. The firm is undervalued and projects above average odds of financial turmoil for the next 2 years. Our ongoing 30 days buy-or-sell advice on the firm is Strong Hold.

About Contributor

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 Ellen Johnson do not own shares of Digirad. Please refer to our Terms of Use for any information regarding our disclosure principles.

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