September 14, 2023
Top 10 Stock Amadeus Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Amadeus – Top 10 Stock in Iberia Index IBEX 35
Amadeus is listed as a top 10 stock on September 14, 2023 in the market index IBEX 35 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 70 (high 70% performer), Obermatt assesses an overall buy recommendation for Amadeus on September 14, 2023.
Snapshot: Obermatt Ranks
| Country | Spain |
| Industry | Data Processing & Outsourcing |
| Index | EURO STOXX 50, IBEX 35, Dividends Europe, Renewables Users |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Amadeus Buy
| 360 METRICS | September 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 47 |
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| GROWTH | ||||||||
| GROWTH | 75 |
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| SAFETY | ||||||||
| SAFETY | 31 |
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| SENTIMENT | ||||||||
| SENTIMENT | 79 |
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| 360° VIEW | ||||||||
| 360° VIEW | 70 |
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ANALYSIS: With an Obermatt 360° View of 70 (better than 70% compared with alternatives), overall professional sentiment and financial characteristics for the stock Amadeus are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Amadeus. The consolidated Growth Rank has a good rank of 75, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 75% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 79, which means that professional investors are more optimistic about the stock than for 79% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 47, which means that the share price of Amadeus is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 53% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 31, which means that the company has a financing structure that is riskier than those of 69% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 70, Amadeus is better positioned than 70% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 75), and professional market sentiment is positive (Sentiment Rank of 79), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Amadeus very positive
ANALYSIS: With an Obermatt Sentiment Rank of 79 (better than 79% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Amadeus is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Amadeus. Analyst Opinions are at a rank of 36 (worse than 64% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 44, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 94, which means that professional investors hold more stock in this company than in 94% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 79, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 79% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Amadeus and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 79 (more positive than 79% compared with investment alternatives), Amadeus has a reputation among professional investors that is significantly higher than that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Amadeus Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 47 (worse than 53% compared with alternatives), Amadeus shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Amadeus. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 71% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 17 which means that the stock price compared with what market professionals expect for future profits is higher than 83% of comparable companies, indicating a low value concerning Amadeus's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 46 which means that the stock price compared with what market professionals expect for future profit levels is higher than 54% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 29 is also low. Compared with invested capital, the stock price is higher than for 71% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 47, is a hold recommendation based on Amadeus's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Amadeus? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Amadeus only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Amadeus Growth Momentum high
| GROWTH METRICS | September 14, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 61 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 67 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 59 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 71 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 75 |
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ANALYSIS: With an Obermatt Growth Rank of 75 (better than 75% compared with alternatives) for 2023, Amadeus shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Amadeus. Sales Growth has a value of 61, which means that, currently, professionals expect the company to grow more than 61% of its competitors. The same is valid for Profit Growth with a value of 67 and for Capital Growth with 59. In addition, Stock Returns had an above-average rank value of 71, which means they have been higher than 71% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 75, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Amadeus exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Amadeus Debt Financing Safety below-average
| SAFETY METRICS | September 14, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 22 |
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| REFINANCING | ||||||||
| REFINANCING | 27 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 55 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 31 |
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ANALYSIS: With an Obermatt Safety Rank of 31 (better than 31% compared with alternatives), the company Amadeus has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Amadeus is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Amadeus. Liquidity is at 55, meaning the company generates more profit to service its debt than 55% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 27, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 73% of its competitors. Leverage is also high at a rank of 22, which means that the company has an above-average debt-to-equity ratio. It has more debt than 78% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 31 (worse than 69% compared with alternatives), Amadeus has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Amadeus Below-Average Financial Performance
| COMBINED PERFORMANCE | September 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 47 |
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| GROWTH | ||||||||
| GROWTH | 75 |
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| SAFETY | ||||||||
| SAFETY | 55 |
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| COMBINED | ||||||||
| COMBINED | 49 |
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ANALYSIS: With an Obermatt Combined Rank of 49 (worse than 51% compared with investment alternatives), Amadeus (Data Processing & Outsourcing, Spain) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Amadeus are low in value (priced high) with a consolidated Value Rank of 47 (worse than 53% of alternatives), and are riskily financed (Safety Rank of 31, which means above-average debt burdens) but show above-average growth (Growth Rank of 75). ...read more
RECOMMENDATION: A Combined Rank of 49, is a hold recommendation based on Amadeus's financial characteristics. As the company Amadeus shows low value with an Obermatt Value Rank of 47 (53% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 75% of comparable companies (Obermatt Growth Rank is 75). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 31 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Amadeus, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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