December 28, 2023
Top 10 Stock Digimarc Hold 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: Digimarc – Top 10 Stock in SDG 14: Life Below Water
Digimarc is listed as a top 10 stock on December 28, 2023 in the market index SDG 14 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 38 (38% performer), Obermatt assesses an overall hold recommendation for Digimarc on December 28, 2023.
Snapshot: Obermatt Ranks
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 Digimarc Hold
| 360 METRICS | December 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 18 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 93 |
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| SENTIMENT | ||||||||
| SENTIMENT | 44 |
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| 360° VIEW | ||||||||
| 360° VIEW | 38 |
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ANALYSIS: With an Obermatt 360° View of 38 (better than 38% compared with alternatives), overall professional sentiment and financial characteristics for the stock Digimarc are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Digimarc. The consolidated Growth Rank has a good rank of 95, 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 95% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 93 which means that the company has a financing structure that is safer than 93% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 18 which means that the share price of Digimarc is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 82% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 44, which means that professional investors are more pessimistic about the stock than for 56% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 38, Digimarc is worse than 62% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 95), and the company is safely financed (Safety Rank of 93). However, professional market sentiment is low(Sentiment Rank of 44). The negative market view on Digimarc may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Digimarc compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth 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 value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Digimarc only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 44 (better than 44% compared with alternatives), overall professional sentiment and engagement for the stock Digimarc is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Digimarc. Analyst Opinions are at a rank of 3 (worse than 97% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Digimarc. Even better, the Professional Investors rank is 68, meaning that professional investors hold more stock in this company than in 68% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 66, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 66% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 44 (less encouraging than 56% compared with investment alternatives), Digimarc has a reputation among professional investors that is below that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Digimarc Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 18 (worse than 82% compared with alternatives), Digimarc shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Digimarc. Price-to-Sales is 1 which means that the stock price compared with what market professionals expect for future profits is higher than 99% of comparable companies, indicating a low value concerning Digimarc's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 24, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Digimarc. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 47 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 18, is a sell recommendation based on Digimarc's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Digimarc? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Digimarc? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Digimarc may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Digimarc Growth Momentum high
| GROWTH METRICS | December 28, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 81 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 78 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 99 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 89 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 95 |
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ANALYSIS: With an Obermatt Growth Rank of 95 (better than 95% compared with alternatives) for 2022, Digimarc 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 Digimarc. Sales Growth has a value of 81, which means that, currently, professionals expect the company to grow more than 81% of its competitors. The same is valid for Profit Growth with a value of 78 and for Capital Growth with 99. In addition, Stock Returns had an above-average rank value of 89, which means they have been higher than 89% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 95, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Digimarc 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: Digimarc Debt Financing Safety very solid
| SAFETY METRICS | December 28, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 100 |
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| REFINANCING | ||||||||
| REFINANCING | 45 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 41 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 93 |
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ANALYSIS: With an Obermatt Safety Rank of 93 (better than 93% compared with alternatives) for 2022, the company Digimarc has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Digimarc 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 just one indicator above average for Digimarc and the other two below average. Leverage is at a rank of 100 meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors.Refinancing is at a rank of 45, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 55% of its competitors. Liquidity is at a rank of 41, meaning that the company generates less profit to service its debt than 59% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 93 (better than 93% compared with alternatives), Digimarc has a financing structure that is significantly safer than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Digimarc are on the safer side. ...read more
Combined financial peformance: Digimarc Above-Average Financial Performance
| COMBINED PERFORMANCE | December 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 18 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 41 |
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| COMBINED | ||||||||
| COMBINED | 72 |
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ANALYSIS: With an Obermatt Combined Rank of 72 (better than 72% compared with investment alternatives), Digimarc (Application Software, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Digimarc are low in value (priced high) with a consolidated Value Rank of 18 (worse than 82% of alternatives). But they show above-average growth (Growth Rank of 95) and are safely financed (Safety Rank of 93, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 72, is a buy recommendation based on Digimarc's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Digimarc exhibits low value (Obermatt Value Rank of 18), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 95). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 93) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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