November 2, 2023
Top 10 Stock Edenred Strong 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: Edenred – Top 10 Stock in Cotation Assistée en Continu All-Tradable Index CAC
Edenred is listed as a top 10 stock on November 02, 2023 in the market index CAC All because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 100 (top 100% performer), Obermatt assesses an overall strong buy recommendation for Edenred on November 02, 2023.
Snapshot: Obermatt Ranks
| Country | France |
| Industry | Data Processing & Outsourcing |
| Index | CAC All, SBF 120, Dividends Europe, Employee Focus EU |
| Size class | 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 Edenred Strong Buy
| 360 METRICS | November 2, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 96 |
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| GROWTH | ||||||||
| GROWTH | 75 |
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| SAFETY | ||||||||
| SAFETY | 22 |
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| SENTIMENT | ||||||||
| SENTIMENT | 98 |
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| 360° VIEW | ||||||||
| 360° VIEW | 100 |
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ANALYSIS: With an Obermatt 360° View of 100 (better than 100% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Edenred are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Edenred. The consolidated Value Rank has an attractive rank of 96, which means that the share price of Edenred is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 96% of alternative stocks in the same industry. 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. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 98. But the company’s financing is risky with a Safety rank of 22. This means 78% of comparable companies have a safer financing structure than Edenred. ...read more
RECOMMENDATION: With a consolidated 360° View of 100, Edenred is better positioned than 100% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 96), above-average growth (Growth Rank of 75), and positive market sentiment in the professional investor community (Sentiment Rank of 98), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 22), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Edenred is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Edenred very positive
ANALYSIS: With an Obermatt Sentiment Rank of 98 (better than 98% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Edenred is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Edenred. Analyst Opinions are at a rank of 56 (better than 56% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 87, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Edenred. Finally, the Professional Investors rank is 100, which means that currently, professional investors hold more stock in this company than in 100% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 98 (more positive than 98% compared with investment alternatives), Edenred has a reputation among professional investors that is significantly higher than that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 47, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 53% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Edenred is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Edenred Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 96 (better than 96% compared with alternatives) for 2023, Edenred shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Edenred. Expected dividend yields are higher than for 92% of comparable companies (a Dividend Yield rank of 92), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 100, which means that the stock price is lower compared with invested capital than for 100% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 35 which means that the stock price compared with what market professionals expect for future profits is higher than for 65% of comparable companies, indicating a low value concerning Edenred's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Edenred with a rank of 49. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 51% of comparable companies, indicating a low value concerning Edenred's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 96, is a buy recommendation based on Edenred's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Edenred may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: Edenred Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 75 (better than 75% compared with alternatives) for 2023, Edenred 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 Edenred. Sales Growth has a value of 67, which means that, currently, professionals expect the company to grow more than 67% of its competitors. The same is valid for Profit Growth with a value of 63 and for Capital Growth with 71. In addition, Stock Returns had an above-average rank value of 53, which means they have been higher than 53% 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, Edenred 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: Edenred Debt Financing Safety risky
| SAFETY METRICS | November 2, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 2 |
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| REFINANCING | ||||||||
| REFINANCING | 22 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 63 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 22 |
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ANALYSIS: With an Obermatt Safety Rank of 22 (better than 22% compared with alternatives), the company Edenred has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Edenred 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 Edenred. Liquidity is at 63, meaning the company generates more profit to service its debt than 63% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 22, 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 78% of its competitors. Leverage is also high at a rank of 2, which means that the company has an above-average debt-to-equity ratio. It has more debt than 98% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 22 (worse than 78% compared with alternatives), Edenred has a financing structure that is significantly 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: Edenred Top Financial Performance
| COMBINED PERFORMANCE | November 2, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 96 |
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| GROWTH | ||||||||
| GROWTH | 75 |
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| SAFETY | ||||||||
| SAFETY | 63 |
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| COMBINED | ||||||||
| COMBINED | 96 |
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ANALYSIS: With an Obermatt Combined Rank of 96 (better than 96% compared with investment alternatives), Edenred (Data Processing & Outsourcing, France) shares have much better financial characteristics than comparable stocks. Shares of Edenred are a good value (attractively priced) with a consolidated Value Rank of 96 (better than 96% of alternatives), show above-average growth (Growth Rank of 75) but are riskily financed (Safety Rank of 22), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 96, is a strong buy recommendation based on Edenred's financial characteristics. As the company Edenred's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 96) and above-average growth (Obermatt Growth Rank of 75), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 22) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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