Is ChannelAdvisor (NYSE:ECOM) a good hedge for your existing portfolios?

23% of stocks are less volatile than ChannelAdvisor, and 81% of all traded equity instruments are projected to make higher returns than the company over the 60 days investment horizon. While some risk-seeking stakeholders are getting worried about technology space, it is reasonable to summarize ChannelAdvisor as a possible investment alternative. We will go over a few points ChannelAdvisor stakeholders should remember regarding its volatility.
Published over a year ago
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Reviewed by Gabriel Shpitalnik

ChannelAdvisor currently holds roughly 66.36 M in cash with 31.48 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 2.29.
Volatility is a rate at which the price of ChannelAdvisor Corp 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 ChannelAdvisor Corp may increase or decrease. In other words, similar to ChannelAdvisor's beta indicator, it measures the risk of ChannelAdvisor Corp and helps estimate the fluctuations that may happen in a short period of time. So if prices of ChannelAdvisor Corp 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.

How important is ChannelAdvisor Corp's Liquidity

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

A Deeper look at ChannelAdvisor

This firm reported the previous year's revenue of 139.54 M. Net Income was 18.12 M with profit before overhead, payroll, taxes, and interest of 101.19 M.
 2018 2019 2020 2021 (projected)
Accounts Payable1.6 M409 K368.1 K377.79 K
Receivables23.44 M22.13 M19.91 M17.84 M

Will ChannelAdvisor stakeholders exit after the pull down?

The coefficient of variation is down to 589.05 as of today. ChannelAdvisor shows above-average downside volatility for the selected time horizon. We advise investors to inspect ChannelAdvisor further and ensure that all market timing and asset allocation strategies are consistent with the estimation of ChannelAdvisor future alpha.

Our Final Take On ChannelAdvisor

While some other firms in the software—application industry are either recovering or due for a correction, ChannelAdvisor may not be as strong as the others in terms of longer-term growth potentials. While some stakeholders may not share our view, we believe that right now is not a good time to increase your holdings in ChannelAdvisor. 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 ChannelAdvisor.

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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 Rifka Kats do not own shares of ChannelAdvisor Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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