Texas Capital drops -0.09 percent in spite of market boost

Today I will concentrate on Texas Capital. I will examine why in spite of prevalent disturbance, the overall long-run investment outlook of the entity is still stable. The company chance of financial distress is now about 49.0 percent. What is Texas Capital Target Price Odds to finish over Current Price? In reference to normal probability distribution, the odds of Texas Capital to move above current price in 30 days from now is about 35.88%. The Texas Capital Bancshares probability density function shows the probability of Texas Capital Stock to fall within a particular range of prices over 30 days . Given the investment horizon of 30 days, the stock has beta coefficient of 1.2545 . This entails as the benchmark fluctuates upward, the company is expected to outperform it on average . However, if the benchmark returns are expected to be negative, Texas Capital will likely underperform. Additionally, the company has a negative alpha implying that the risk taken by holding this equity is not justified. Texas Capital Bancsh is significantly underperforming Russell 2000 .
Published over a year ago
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Reviewed by Michael Smolkin

The entity has beta of 1.79. As market goes up, the company is expected to significantly outperform it. However, if the market returns are negative, Texas Capital will likely underperform. This firm dividends can provide a clue to current valuation of the stock. Texas Capital is not expected to issue dividends this year as it trying to preserve or re-invest any of the funds available for distribution to stakeholders. Earning per share calculations of the firm is based on official Zacks consensus of 8 analysts regarding Texas Capital Bancsh future annual earnings. Given the historical accuracy of 97.43%, the future earnings per share of the company is estimated to be 6.2422 with lowest and highest values of 5.91 and 6.43 respectively. Please note that this consensus of annual earnings estimates for the entity is an estimate of EPS before non-recurring items and including employee stock options expenses.
There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as Texas Capital Bancshares. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.

Predictive Modules for Texas Capital

Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Texas Capital's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Texas Capital. Your research has to be compared to or analyzed against Texas Capital's peers to derive any actionable benefits. When done correctly, Texas Capital's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Texas Capital Bancshares.

How important is Texas Capital's Liquidity

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

Breaking down Texas Capital Further

Texas Capital Bancsh reported previous year revenue of 937.19 M. Net Income was 308.5 M with profit before overhead, payroll, taxes, and interest of 905.88 M. Texas Capital price decrease over the last few months has created some momentum for investors as it was traded today as low as 56.1 and as high as 56.88 per share. The company management were not very successful in positioning the company components to exploit market volatility in September. However, diversifying your holdings with Texas Capital Bancshares or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 2.2887. The current volatility is consistent with the ongoing market swings in September 2019 as well as with Texas Capital Bancsh unsystematic, company specific events. Texas Capital preserves 1.64 k of number of employees. Texas Capital is trading at 56.15 which is 0.09 percent down. Today lowest is 56.1. Texas Capital Total Liabilities is increasing over the last 5 years. The prevalent value of Texas Capital Total Liabilities is 19,409,095,684. Also, Texas Capital Invested Capital Average is increasing over the last 4 years.
 2018 2019 (projected)
Texas Capital Net Income 300,824,000  308,500,000 
Texas Capital Gross Profit 561,234,600  905,880,000 
To conclude, we see that Texas Capital Responds to market. The entity is undervalued with close to average chance of bankruptcy within the next 24 months. Our concluding buy-hold-sell recommendation on the entity is Hold.

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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 Ellen Johnson do not own shares of Texas Capital Bancshares. Please refer to our Terms of Use for any information regarding our disclosure principles.

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