The stock is currently experiencing an active upward rally. Although many aggressive traders are getting into healthcare space, Eargo Inc may or may not be your first choice. We will check if the company can maintain a respectable level of debt while minimizing operating losses. Here we also measure the ability of Eargo to meet its long-term debt obligations, such as interest payments on debt, the final principal payment on the debt, and any other fixed obligations like lease payments.
Eargo,
financial leverage refers to using borrowed capital as a funding source to finance Eargo, Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Eargo, 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 Eargo,'s 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 Eargo,'s 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 Eargo,'s total debt and its cash.
To perform a cash flow analysis of Eargo,, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Eargo, is receiving and how much cash it distributes out in a given period. The Eargo, cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
The latest price spike of Eargo Inc could raise concerns from retail investors as the firm it trading at a share price of
47.99 on very low momentum in volume. The company executives may have good odds in positioning the firm resources to exploit market volatility in
January. The stock standard deviation of daily returns for 30 days investing horizon is currently 4.35. This high volatility is attributed to the latest market swings and not so good earnings reports for some of the Eargo partners.
Liabilities Breakdown
21.8 M
Current Liabilities
8.9 M
Long-Term Liabilities
| Total Liabilities | 30.7 Million |
| Current Liabilities | 21.85 Million |
| Long-Term Liabilities | 8.85 Million |
Will Eargo latest spike continue?
Potential upside is down to 9.8. It may connote a possible volatility fall. Eargo Inc shows above-average downside volatility for the selected time horizon. We advise investors to inspect Eargo Inc further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Eargo future alpha.
Our Bottom Line On Eargo Inc
While many of the other players within the medical devices industry are still a little expensive, even after the recent corrections, Eargo may offer a potential longer-term growth to retail investors. On the whole, as of the 11th of December 2020, we believe that at this point, Eargo is
overvalued with
low chance of distress within the next 2 years. Our current Buy-Hold-Sell recommendation on the enterprise is
Hold.
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Try AI Portfolio ArchitectRifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce.
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