Party Story

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PRTY -- USA Stock  

USD 3.04  0.10  3.40%

99% of stocks are less volatile than Party, and 46% of all traded equity instruments are projected to make higher returns than the company over the 90 days investment horizon. While some of us are excited about consumer cyclical space, it makes sense to break down Party City in greater detail to make a better estimate of its risk and reward. We will inspect if the expected returns on Party City will justify its current volatility. The current Party risk factors may impact the value of the stock as we estimate Party City as currently overvalued. The real value is approaching 2.08 per share.
Published over a month ago
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Is Party City (NYSE:PRTY) rise viable based on current volatility?
Party City Holdco currently holds roughly 154.13 M in cash with 70.55 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 1.63. Party City holds a performance score of 18 on a scale of zero to a hundred. The company holds a Beta of 3.9807, which implies a somewhat significant risk relative to the market. Let's try to break down what Party'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, Party City will likely underperform. Although it is essential to pay attention to Party City Holdco current trending patterns, it is also good to be reasonable about what you can do with equity existing price patterns. Our philosophy towards forecasting future potential of any stock is to look not only at its past charts but also at the business as a whole, including all available fundamental and technical indicators. To evaluate if Party City Holdco expected return of 2.99 will be sustainable into the future, we have found twenty-one different technical indicators, which can help you to check if the expected returns are sustainable. Use Party City maximum drawdown, as well as the relationship between the downside variance and skewness to analyze future returns on Party City.
Volatility is a rate at which the price of Party City 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 Party City may increase or decrease. In other words, similar to Party's beta indicator, it measures the risk of Party City and helps estimate the fluctuations that may happen in a short period of time. So if prices of Party City 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 Party City's Liquidity

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

How Party utilizes its cash?

To perform a cash flow analysis of Party City, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Party City is receiving and how much cash it distributes out in a given period. The Party City cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Party City Net Cash Flow from Operations is fairly stable at the moment as compared to the past year. Party City reported Net Cash Flow from Operations of 43.69 Million in 2019

Party City Volatility Drivers

Party City unsystematic risk is unique to Party City Holdco 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 Party City you can also buy OReilly Automotive. You can also mitigate this risk by investing in the specialty retail 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 Party City 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 Party City income statement and balance sheet. Here are more details about Party volatility.