Rev Stock Story


USD 11.49  0.01  0.09%   

Rev Group is scheduled to announce its earnings tomorrow. The next fiscal year end is expected on the 21st of December 2022. As many millenniums are trying to avoid industrials space, it makes sense to digest Rev Group a little further and try to understand its current market patterns. We will analyze why Rev investors may still consider a stake in the business.
Published over two months ago
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Does Rev (NYSE:REVG) has enough cash to last in July?

The company currently holds 279.4 M in liabilities with Debt to Equity (D/E) ratio of 0.57, which is about average as compared to similar companies. Rev Group has a current ratio of 1.65, which is within standard range for the sector. Debt can assist Rev until it has trouble settling it off, either with new capital or with free cash flow. So, Rev'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 Rev Group sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Rev to invest in growth at high rates of return. When we think about Rev's use of debt, we should always consider it together with cash and equity.
Rev financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Rev, including all of Rev'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 Rev assets, the company is considered highly leveraged. Understanding the composition and structure of overall Rev 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.

How important is Rev's Liquidity

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

How does Rev utilize its cash?

To perform a cash flow analysis of Rev, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Rev is receiving and how much cash it distributes out in a given period. The Rev cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Rev Net Cash Flow from Operations is projected to increase significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 142.47 Million

Another angle On Rev

The small dip in market price for the last few months created some momentum for shareholders as it was traded today as low as 12.14 and as high as 12.43 per share. The company executives did not add much value to Rev investors in May. However, diversifying your holdings with Rev Group or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 2.35. The current volatility is consistent with the ongoing market swings in May 2022 as well as with Rev unsystematic, company-specific events.

Will Rev growth be reasonable after the surge?

The treynor ratio is down to -0.14 as of today. Rev Group exhibits very low volatility with skewness of -0.32 and kurtosis of -0.68. However, we advise investors to further study Rev Group 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 Rev's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Rev's 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.

Rev Implied Volatility

Rev's implied volatility exposes the market's sentiment of Rev Group stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Rev's 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 Rev stock will not fluctuate a lot when Rev's options are near their expiration.

Our Takeaway on Rev Investment

Although some firms in the farm & heavy construction machinery industry are either recovering or due for a correction, Rev may not be performing as strong as the other in terms of long-term growth potentials. To summarize, as of the 6th of June 2022, our research shows that Rev is a rather not too volatile investment opportunity with a below average probability of distress in the next two years. From a slightly different view, the entity currently appears to be undervalued. Our ongoing 90 days buy-or-sell advice on the firm is Cautious Hold.

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 Gabriel Shpitalnik do not own shares of Rev Group. Please refer to our Terms of Use for any information regarding our disclosure principles.

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