Fact based stock research
Challenger (ASX:CGF)
AU000000CGF5
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.
Challenger stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 34 (worse than 66% compared with investment alternatives), Challenger (Other Financial Services, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Challenger are low in value (priced high) with a consolidated Value Rank of 32 (worse than 68% of alternatives) and show below-average growth (Growth Rank of 37) but are safely financed (Safety Rank of 67), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 34, is a hold recommendation based on Challenger's financial characteristics. As the company Challenger's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 32) and low growth (Obermatt Growth Rank of 37), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 67) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° ViewnewThis stock has achievements: Top 10 Stock.
25-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Challenger
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 48 |
|
19 |
|
30 |
|
32 |
|
| GROWTH | ||||||||
| GROWTH | 72 |
|
73 |
|
23 |
|
37 |
|
| SAFETY | ||||||||
| SAFETY | 26 |
|
84 |
|
81 |
|
67 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
24 |
|
57 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
43 |
|
43 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 34 (worse than 66% compared with investment alternatives), Challenger (Other Financial Services, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Challenger are low in value (priced high) with a consolidated Value Rank of 32 (worse than 68% of alternatives) and show below-average growth (Growth Rank of 37) but are safely financed (Safety Rank of 67), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 34, is a hold recommendation based on Challenger's financial characteristics. As the company Challenger's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 32) and low growth (Obermatt Growth Rank of 37), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 67) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 48 |
|
19 |
|
30 |
|
32 |
|
| GROWTH | ||||||||
| GROWTH | 72 |
|
73 |
|
23 |
|
37 |
|
| SAFETY | ||||||||
| SAFETY | 26 |
|
84 |
|
81 |
|
67 |
|
| COMBINED | ||||||||
| COMBINED | 38 |
|
75 |
|
43 |
|
34 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 32 (worse than 68% compared with alternatives), Challenger 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 above average for Challenger. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 56 which means that the stock price compared with what market professionals expect for future profits is lower than for 56% of comparable companies, indicating a good value concerning Challenger's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 52, and for Dividend Yield with a Dividend Yield Rank of 58. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 84% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 16). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 32, is a hold recommendation based on Challenger's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Challenger has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Challenger shares. 9. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 75 |
|
22 |
|
15 |
|
16 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 67 |
|
28 |
|
48 |
|
56 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 57 |
|
48 |
|
52 |
|
52 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 48 |
|
41 |
|
54 |
|
58 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 48 |
|
19 |
|
30 |
|
32 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), Challenger shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for Challenger. While Sales Growth ranks at 79, professionals currently expect the company to grow more than 79% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 48, which means that, currently, professionals expect the company to grow its profits less than 52% of its competitors, and Capital Growth has a low rank of 1. Historic stock returns were also below average with a current Stock Returns rank of 47 which means that the stock returns have recently been below 53% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 37, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance isn't stellar here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 97 |
|
71 |
|
69 |
|
79 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 75 |
|
42 |
|
48 |
|
48 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
100 |
|
8 |
|
1 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 22 |
|
27 |
|
15 |
|
47 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 72 |
|
73 |
|
23 |
|
37 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 67 (better than 67% compared with alternatives), the company Challenger has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Challenger is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Challenger. Refinancing is at 67, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 67% of its competitors. Liquidity is also good at 64, meaning the company generates more profit to service its debt than 64% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 38, which means the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 67 (better than 67% compared with alternatives), Challenger has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Challenger could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Challenger and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 6 |
|
34 |
|
40 |
|
38 |
|
| REFINANCING | ||||||||
| REFINANCING | 90 |
|
61 |
|
63 |
|
67 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 41 |
|
84 |
|
81 |
|
64 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 26 |
|
84 |
|
81 |
|
67 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
21 |
|
35 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
75 |
|
40 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
40 |
|
82 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
26 |
|
67 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
24 |
|
57 |
|
new |
|
Stock analysis by the purely fact based Obermatt Method for Challenger from April 25, 2024.
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