Hydrofarm Holdings Profitability Analysis
| HYFM Stock | USD 0.64 0.03 4.92% |
For Hydrofarm Holdings profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Hydrofarm Holdings to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Hydrofarm Holdings Group utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Hydrofarm Holdings's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Hydrofarm Holdings Group over time as well as its relative position and ranking within its peers.
Hydrofarm |
Is Wholesale space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Hydrofarm Holdings. If investors know Hydrofarm will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Hydrofarm Holdings listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Hydrofarm Holdings is measured differently than its book value, which is the value of Hydrofarm that is recorded on the company's balance sheet. Investors also form their own opinion of Hydrofarm Holdings' value that differs from its market value or its book value, called intrinsic value, which is Hydrofarm Holdings' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Hydrofarm Holdings' market value can be influenced by many factors that don't directly affect Hydrofarm Holdings' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Hydrofarm Holdings' value and its price as these two are different measures arrived at by different means. Investors typically determine if Hydrofarm Holdings is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Hydrofarm Holdings' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
Hydrofarm Holdings Return On Asset vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Hydrofarm Holdings's current stock value. Our valuation model uses many indicators to compare Hydrofarm Holdings value to that of its competitors to determine the firm's financial worth. Hydrofarm Holdings Group is rated below average in return on equity category among its peers. It also is rated below average in return on asset category among its peers . Comparative valuation analysis is a catch-all technique that is used if you cannot value Hydrofarm Holdings by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.Hydrofarm Return On Asset vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Hydrofarm Holdings |
| = | -0.24 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.
Hydrofarm Holdings |
| = | -0.0436 |
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.
Hydrofarm Return On Asset Comparison
Hydrofarm Holdings is currently under evaluation in return on asset category among its peers.
Hydrofarm Holdings Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Hydrofarm Holdings, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Hydrofarm Holdings will eventually generate negative long term returns. The profitability progress is the general direction of Hydrofarm Holdings' change in net profit over the period of time. It can combine multiple indicators of Hydrofarm Holdings, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Hydrofarm Holdings Group, Inc., together with its subsidiaries, engages in the manufacture and distribution of controlled environment agriculture equipment and supplies in the United States and Canada. Hydrofarm Holdings Group, Inc. was founded in 1977 and is based in Shoemakersville, Pennsylvania. Hydrofarm Holdings operates under Farm Heavy Construction Machinery classification in the United States and is traded on NASDAQ Exchange. It employs 709 people.
Hydrofarm Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Hydrofarm Holdings. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Hydrofarm Holdings position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Hydrofarm Holdings' important profitability drivers and their relationship over time.
Hydrofarm Holdings Profitability Trends
Hydrofarm Holdings profitability trend refers to the progression of profit or loss within a business. An upward trend means that Hydrofarm Holdings' profit has generally increased over time, and a downward profitability trend means profits are declining. Recognizing problems early in profitability trends allows investors to address revenue and cost issues in advance. Investors and analysts usually monitor three types of profitability trends: gross, operating, and net. Gross profit is the difference between revenue and costs of goods sold. Operating profit is Hydrofarm Holdings' gross profit minus its overhead. After you account for other unusual revenue, expenses, and costs, you get net profit. Gross profit trends are often a good indicator of future profitability. If you have high gross profit margins, you have a better chance to cover overhead and make money.
Use Hydrofarm Holdings in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Hydrofarm Holdings position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hydrofarm Holdings will appreciate offsetting losses from the drop in the long position's value.Hydrofarm Holdings Pair Trading
Hydrofarm Holdings Group Pair Trading Analysis
The ability to find closely correlated positions to Hydrofarm Holdings could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Hydrofarm Holdings when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Hydrofarm Holdings - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Hydrofarm Holdings Group to buy it.
The correlation of Hydrofarm Holdings is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Hydrofarm Holdings moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Hydrofarm Holdings moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Hydrofarm Holdings can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Hydrofarm Holdings position
In addition to having Hydrofarm Holdings in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Check out Risk vs Return Analysis. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
To fully project Hydrofarm Holdings' future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Hydrofarm Holdings at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Hydrofarm Holdings' income statement, its balance sheet, and the statement of cash flows.