September 7, 2023
Top 10 Stock Intershop Strong Buy Recommendation

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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 Intershop Strong Buy

360 METRICS	September 7, 2023
VALUE
VALUE	41
GROWTH
GROWTH	40
SAFETY
SAFETY	96
SENTIMENT
SENTIMENT	94
360° VIEW
360° VIEW	89

ANALYSIS: With an Obermatt 360° View of 89 (better than 89% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Intershop are very positive. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Intershop. The consolidated Sentiment Rank has a good rank of 94, which means that professional investors are more optimistic about the stock than for 94% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 96 or better than 96% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 41, meaning that the share price of Intershop is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 40. ...read more

RECOMMENDATION: With a consolidated 360° View of 89, Intershop is better positioned than 89% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 94) and safe financing practices (Safety Rank of 96), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Intershop̣ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more

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Sentiment Strategy: Professional Market Sentiment for Intershop very positive

SENTIMENT METRICS	September 7, 2023
ANALYST OPINION
ANALYST OPINION	25
OPINIONS CHANGE
OPINIONS CHANGE	86
PRO HOLDINGS
PRO HOLDINGS	100
MARKET PULSE
MARKET PULSE	81
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	94

ANALYSIS: With an Obermatt Sentiment Rank of 94 (better than 94% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Intershop is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Intershop. Analyst Opinions are at a rank of 25 (worse than 75% 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 86, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Intershop. Even better, the Professional Investors rank is 100, meaning that professional investors hold more stock in this company than in 100% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 81, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 81% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 94 (more positive than 94% compared with investment alternatives), Intershop has a reputation among professional investors that is significantly higher than 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

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Value Strategy: Intershop Stock Price Value below-average critical

VALUE METRICS	September 7, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	17
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	40
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	8
DIVIDEND YIELD
DIVIDEND YIELD	96
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	41

ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), Intershop 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 Intershop. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 96% 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 Intershop's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 40 which means that the stock price compared with what market professionals expect for future profit levels is higher than 60% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 8 is also low. Compared with invested capital, the stock price is higher than for 92% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a hold recommendation based on Intershop's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Intershop? 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 Intershop only if they reasonably expect the low current profit levels to be transitory. ...read more

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Growth Strategy: Intershop Growth Momentum low

GROWTH METRICS	September 7, 2023
REVENUE GROWTH
REVENUE GROWTH	11
PROFIT GROWTH
PROFIT GROWTH	20
CAPITAL GROWTH
CAPITAL GROWTH	86
STOCK RETURNS
STOCK RETURNS	76
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	40

ANALYSIS: With an Obermatt Growth Rank of 40 (better than 40% compared with alternatives), Intershop 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 half of the indicators below and half above average for Intershop. Capital Growth has a rank of 86, which means that currently professionals expect the company to grow its invested capital more than 20% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 76 (above 76% of alternative investments). But Sales Growth has only a rank of 11, which means that, currently, professionals expect the company to grow less than 89% of its competitors, and Profit Growth is also low at a rank of 20. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 40, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Intershop, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more

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Safety Strategy: Intershop Debt Financing Safety very solid

SAFETY METRICS	September 7, 2023
LEVERAGE
LEVERAGE	93
REFINANCING
REFINANCING	46
LIQUIDITY
LIQUIDITY	95
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	96

ANALYSIS: With an Obermatt Safety Rank of 96 (better than 96% compared with alternatives) for 2023, the company Intershop has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Intershop 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 Intershop. Leverage is at a rank of 93, meaning the company has a below-average debt-to-equity ratio. It has less debt than 93% of its competitors. Liquidity is also good at a rank of 95, meaning the company generates more profit to service its debt than 95% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 46, 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 54% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 96 (better than 96% compared with alternatives), Intershop has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Intershop. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more

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Combined financial peformance: Intershop Top Financial Performance

COMBINED PERFORMANCE	September 7, 2023
VALUE
VALUE	41
GROWTH
GROWTH	40
SAFETY
SAFETY	95
COMBINED
COMBINED	76

ANALYSIS: With an Obermatt Combined Rank of 76 (better than 76% compared with investment alternatives), Intershop (Real Estate: Operating Services, Switzerland) shares have much better financial characteristics than comparable stocks. Shares of Intershop are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives) and show below-average growth (Growth Rank of 40) but are safely financed (Safety Rank of 96), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 76, is a strong buy recommendation based on Intershop's financial characteristics. As the company Intershop's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 41) and low growth (Obermatt Growth Rank of 40), 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 96) 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. ...read more

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