This firm currently holds 299
M in liabilities. The company has a current ratio of 2.1, suggesting that it is liquid enough and is able to pay its financial obligations when due. Debt can assist Hippo Holdings until it has trouble settling it off, either with new capital or with free cash flow. So, Hippo Holdings' 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 Hippo Holdings sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Hippo to invest in growth at high rates of return. When we think about Hippo Holdings' use of debt, we should always consider it together with cash and equity.
The company retains a Market Volatility (i.e., Beta) of 1.8943, which attests to a somewhat significant risk relative to the market. Let's try to break down what Hippo's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Hippo Holdings will likely underperform. Even though it is essential to pay attention to
Hippo Holdings current price history, it is always good to be careful when utilizing equity current price movements. Our philosophy towards determining any stock's
future performance is to check both, its past performance charts as well as the business as a whole, including all available
technical indicators. Hippo Holdings exposes twenty-seven different technical indicators, which can help you to evaluate its performance.
Hippo Holdings has an expected return of -0.11%. Please be advised to check out Hippo Holdings
maximum drawdown, as well as the
relationship between the expected short fall and
rate of daily change to decide if
Hippo Holdings performance from the past will be repeated at some point in the near future.
Volatility is a rate at which the price of Hippo Holdings 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 Hippo Holdings may increase or decrease. In other words, similar to Hippo's
beta indicator, it measures the risk of Hippo Holdings and helps estimate the fluctuations that may happen in a short period of time. So if prices of Hippo Holdings 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 Hippo Holdings's Liquidity
Hippo Holdings
financial leverage refers to using borrowed capital as a funding source to finance Hippo Holdings ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Hippo Holdings 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 Hippo Holdings' 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 Hippo Holdings' 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 Hippo Holdings's total debt and its cash.
Hippo Holdings Gross Profit
Hippo Holdings Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Hippo Holdings previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Hippo Holdings Gross Profit growth over the last 10 years. Please check Hippo Holdings'
gross profit and other
fundamental indicators for more details.
Hippo Holdings Volatility Drivers
Hippo Holdings unsystematic risk is unique to Hippo Holdings and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Hippo Holdings you can also buy
Core Main. You can also mitigate this risk by investing in the financials sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Hippo Holdings important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Hippo Holdings income statement and balance sheet. Here are more
details about Hippo volatility.
Click cells to compare fundamentals
Going after Hippo Financials
Hippo Holdings reported the previous year's revenue of 75.5
M. Net Loss for the year was (364.8
M) with profit before overhead, payroll, taxes, and interest of 7
M.
Over 3 percent rise for Hippo Holdings. What does it mean for institutional investors?
Latest standard deviation is at 4.18. Hippo Holdings exhibits very low volatility with skewness of 0.1 and kurtosis of 0.2. However, we advise investors to further study Hippo Holdings technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Hippo Holdings' stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Hippo Holdings' 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.
Hippo Holdings Implied Volatility
Hippo Holdings' implied volatility exposes the market's sentiment of Hippo Holdings stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Hippo Holdings' implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Hippo Holdings stock will not fluctuate a lot when Hippo Holdings' options are near their expiration.
Our Final Take On Hippo Holdings
Whereas some firms in the insurance—specialty industry are either recovering or due for a correction, Hippo may not be as strong as the others in terms of longer-term growth potentials. Taking everything into account, as of the 13th of May 2022, our concluding 90 days buy vs. sell advice on the company is
Hold. We believe Hippo Holdings is
undervalued with
quite high probability of distress for the next two years.
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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 Hippo Holdings. Please refer to our
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