Davidstea Stock Story

DTEA -  USA Stock  

USD 2.47  0.02  0.80%

Davidstea is scheduled to announce its earnings tomorrow. The upcoming quarterly report is expected on the 20th of September 2021. As many baby boomers are still indifferent towards consumer defensive space, it makes sense to go over Davidstea as a unique choice for millenniums. We will check if the company can maintain a respectable level of debt while minimizing operating losses.
Published over a week ago
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Will Davidstea (NASDAQ:DTEA) be in financial trouble before October?
Davidstea currently holds 578 K in liabilities with Debt to Equity (D/E) ratio of 3.8, implying Davidstea greatly relies on financing operations through barrowing. The entity has a current ratio of 0.7, indicating that it has a negative working capital and may not be able to pay financial obligations when due. About 46.0% of the company shares are held by company insiders. Davidstea has price-to-book (P/B) ratio of 1.75. Some equities with similar Price to Book (P/B) outperform the market in the long run. The entity has Price/Earnings To Growth (PEG) ratio of 1.34. The firm recorded a loss per share of 0.21. Davidstea had not issued any dividends in recent years.
Davidstea financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Davidstea, including all of Davidstea's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Davidstea assets, the company is considered highly leveraged. Understanding the composition and structure of overall Davidstea debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.
Please read more on our technical analysis page.

Understanding Davidstea Total Debt

Davidstea liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Davidstea has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Davidstea balance sheet include debt obligations and money owed to different Davidstea vendors, workers, and loan providers. Below is the chart of Davidstea main long-term debt accounts currently reported on its balance sheet.
You can use Davidstea financial leverage analysis tool to get a better grip on understanding its financial position

How important is Davidstea's Liquidity

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

What is driving Davidstea Investor Appetite?

The firm reported the previous year's revenue of 112.69 M. Net Loss for the year was (6.92 M) with profit before overhead, payroll, taxes, and interest of 49.73 M.

Asset Breakdown

24.9 M
Assets Non Current
59.4 M
Current Assets
Total Assets84.37 Million
Current Assets59.42 Million
Assets Non Current24.95 Million
Goodwill2.95 Million
Tax Assets2.17 Million

Davidstea bad events are not so bad

The mean deviation is down to 2.59 as of today.
As of the 13th of September 2021, Davidstea shows the mean deviation of 2.59, and Coefficient Of Variation of (710.82). Davidstea technical analysis allows you to utilize historical prices and volume patterns in order to determine a pattern that computes the direction of the firm's future prices. Put another way, you can use this information to find out if the firm will indeed mirror its model of historical prices and volume momentum, or the prices will eventually revert. We were able to analyze and collect data for nineteen technical drivers for Davidstea, which can be compared to its rivals. Please confirm Davidstea treynor ratio, downside variance, kurtosis, as well as the relationship between the value at risk and expected short fall to decide if Davidstea is priced favorably, providing market reflects its regular price of 3.39 per share. Given that Davidstea has jensen alpha of (0.48), we urge you to verify Davidstea's prevailing market performance to make sure the company can sustain itself at a future point.

The Bottom Line

Whereas other companies in the packaged foods industry are either recovering or due for a correction, Davidstea may not be as strong as the others in terms of longer-term growth potentials. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither acquire nor drop any shares of Davidstea at this time. The Davidstea risk-reward trade off is not appealing enough to do any trading. 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 Davidstea.

Editorial Staff

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 Achuva Shats do not own shares of Davidstea. Please refer to our Terms of Use for any information regarding our disclosure principles.

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