LifeMD Stock Story

LFMD
 Stock
  

USD 2.90  0.25  7.94%   

39% of stocks are less volatile than LifeMD, and 99% of all traded equity instruments are projected to make higher returns than the company over the 90 days investment horizon. As many old-fashioned traders are trying to avoid healthcare space, it makes sense to digest LifeMD Inc a little further and try to understand its current volatility patterns. We will cover the possibilities of LifeMD's current volatility to continue through June.
Published over three months ago
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Will LifeMD (NASDAQ:LFMD) latest volatility spike continue?

The company currently holds 11.1 M in liabilities with Debt to Equity (D/E) ratio of 0.32, which is about average as compared to similar companies. LifeMD Inc 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. Debt can assist LifeMD until it has trouble settling it off, either with new capital or with free cash flow. So, LifeMD's 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 LifeMD Inc sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for LifeMD to invest in growth at high rates of return. When we think about LifeMD's use of debt, we should always consider it together with cash and equity.
Volatility is a rate at which the price of LifeMD 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 LifeMD may increase or decrease. In other words, similar to LifeMD's beta indicator, it measures the risk of LifeMD and helps estimate the fluctuations that may happen in a short period of time. So if prices of LifeMD 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 LifeMD's Liquidity

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

How does LifeMD utilize its cash?

To perform a cash flow analysis of LifeMD, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash LifeMD is receiving and how much cash it distributes out in a given period. The LifeMD cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
LifeMD 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 (33.09 Million)

LifeMD Volatility Drivers

LifeMD unsystematic risk is unique to LifeMD Inc 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 LifeMD you can also buy Greenlane Holdings. You can also mitigate this risk by investing in the pharmaceutical retailers 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 LifeMD 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 LifeMD income statement and balance sheet. Here are more details about LifeMD volatility.
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