September 28, 2023
Top 10 Stock G8 Education 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: G8 Education – Top 10 Stock in Australian Securities Exchange Index ASX 300
G8 Education is listed as a top 10 stock on September 28, 2023 in the market index ASX 300 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 68 (high 68% performer), Obermatt assesses an overall buy recommendation for G8 Education on September 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 G8 Education Buy
| 360 METRICS | September 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 95 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 31 |
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| SENTIMENT | ||||||||
| SENTIMENT | 46 |
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| 360° VIEW | ||||||||
| 360° VIEW | 68 |
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ANALYSIS: With an Obermatt 360° View of 68 (better than 68% compared with alternatives), overall professional sentiment and financial characteristics for the stock G8 Education are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for G8 Education. The consolidated Value Rank has an attractive rank of 95, which means that the share price of G8 Education 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 95% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 67, 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. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 46. Professional investors are more confident in 54% other stocks. Worryingly, the company has risky financing, with a Safety rank of 31. This means 69% of comparable companies have a safer financing structure than G8 Education. ...read more
RECOMMENDATION: With a consolidated 360° View of 68, G8 Education is better positioned than 68% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 95 and the Growth Rank above-average at 67, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 46. In addition, the company financing structure is on the riskier side (Safety Rank of 31). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for G8 Education only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 46 (better than 46% compared with alternatives), overall professional sentiment and engagement for the stock G8 Education is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for G8 Education. Analyst Opinions are at a rank of 27 (worse than 73% 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 means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in G8 Education. More encouragingly, the Professional Investors rank is 83, which means that professional investors hold more stock in this company than in 83% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 28, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 72% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 46 (less encouraging than 54% compared with investment alternatives), G8 Education has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for G8 Education. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: G8 Education Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 95 (better than 95% compared with alternatives) for 2023, G8 Education shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for G8 Education. Price-to-Sales is 83 which means that the stock price compared with what market professionals expect for future sales is lower than for 83% of comparable companies, indicating a good value for G8 Education's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 83% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 79. Compared with other companies in the same industry, dividend yields of G8 Education are expected to be higher than for 92% of all competitors (a Dividend Yield rank of 92). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 95, is a buy recommendation based on G8 Education's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in G8 Education based on its detailed value metrics.
Growth Strategy: G8 Education Growth Momentum good
| GROWTH METRICS | September 28, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 41 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 58 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 62 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 57 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 67 |
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ANALYSIS: With an Obermatt Growth Rank of 67 (better than 67% compared with alternatives), G8 Education shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for G8 Education. Profit Growth has a rank of 58 which means that currently professionals expect the company to grow its profits more than 58% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 62, and Stock Returns has a rank of 57 which means that the stock returns have recently been above 57% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 41 (59% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 67, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: G8 Education Debt Financing Safety below-average
| SAFETY METRICS | September 28, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 40 |
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| REFINANCING | ||||||||
| REFINANCING | 12 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 38 |
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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 G8 Education 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 G8 Education 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 all three metrics below average for G8 Education. Liquidity is at 38, meaning that the company generates less profit to service its debt than 62% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 40, meaning the company has an above-average debt-to-equity ratio. It has more debt than 60% of its competitors. Finally, Refinancing is at a rank of 12 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 88% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 31 (worse than 69% compared with alternatives), G8 Education has a financing structure that is riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: G8 Education Top Financial Performance
| COMBINED PERFORMANCE | September 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 95 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 38 |
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| COMBINED | ||||||||
| COMBINED | 86 |
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ANALYSIS: With an Obermatt Combined Rank of 86 (better than 86% compared with investment alternatives), G8 Education (Education Services, Australia) shares have much better financial characteristics than comparable stocks. Shares of G8 Education are a good value (attractively priced) with a consolidated Value Rank of 95 (better than 95% of alternatives), show above-average growth (Growth Rank of 67) but are riskily financed (Safety Rank of 31), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 86, is a strong buy recommendation based on G8 Education's financial characteristics. As the company G8 Education's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 95) and above-average growth (Obermatt Growth Rank of 67), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 31) 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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