Fact based stock research
Magazine Luiza (BOVESPA:MGLU3)

BRMGLUACNOR2

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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".

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Magazine Luiza stock research in summary

magazineluiza.com.br


ANALYSIS: With an Obermatt Combined Rank of 95 (better than 95% compared with investment alternatives), Magazine Luiza (General Merchandise Stores, Brazil) shares have much better financial characteristics than comparable stocks. Shares of Magazine Luiza are a good value (attractively priced) with a consolidated Value Rank of 65 (better than 65% of alternatives), show above-average growth (Growth Rank of 63), and are safely financed (Safety Rank of 93), which means low debt burdens. ...read more


RECOMMENDATION: A Combined Rank of 95, is a strong buy recommendation based on Magazine Luiza's financial characteristics. As the company Magazine Luiza's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 65), above-average growth (Obermatt Growth Rank of 63), and indicate that the company is safely financed (Obermatt Safety Rank of 93), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Magazine Luiza. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. 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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Country Brazil
Industry General Merchandise Stores
Index BOVESPA, Renewables Users
Size class X-Large

4-Jul-2024. Stock data may be delayed. Log in or sign up to get the most recent research.




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Research History: Magazine Luiza

RESEARCH HISTORY 2021 2022 2023 2024
VALUE
VALUE
GROWTH
GROWTH
SAFETY
SAFETY
SENTIMENT
SENTIMENT
360° VIEW
360° VIEW

Most recent update of the stock research: 4-Jul-2024. Financial reporting date used for calculating ranks: 31-Mar-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Magazine Luiza is in the corresponding investment strategy.
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Combined financial peformance in Detail

ANALYSIS: With an Obermatt Combined Rank of 95 (better than 95% compared with investment alternatives), Magazine Luiza (General Merchandise Stores, Brazil) shares have much better financial characteristics than comparable stocks. Shares of Magazine Luiza are a good value (attractively priced) with a consolidated Value Rank of 65 (better than 65% of alternatives), show above-average growth (Growth Rank of 63), and are safely financed (Safety Rank of 93), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 95, is a strong buy recommendation based on Magazine Luiza's financial characteristics. As the company Magazine Luiza's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 65), above-average growth (Obermatt Growth Rank of 63), and indicate that the company is safely financed (Obermatt Safety Rank of 93), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Magazine Luiza. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. 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
GROWTH
GROWTH
SAFETY
SAFETY
COMBINED
COMBINED

Last update of combined financial performance: 4-Jul-2024. Stock analysis on combined financial performance: The higher the rank of Magazine Luiza the better the performance.


Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 65 (better than 65% compared with alternatives), Magazine Luiza shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Magazine Luiza. Price-to-Sales (P/S) is 89, which means that the stock price compared with what market professionals expect for future sales is lower than for 89% of comparable companies, indicating a good value concerning Magazine Luiza's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 95% of alternatives (5% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 20 are lower than average (dividends are expected to be lower than 80% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 41, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 65, is a buy recommendation based on Magazine Luiza's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Magazine Luiza may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). 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)
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)
DIVIDEND YIELD
DIVIDEND YIELD
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE

Last update of Value Rank: 4-Jul-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Magazine Luiza; except for dividend yield where the rank is higher, the higher the yield.


Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 63 (better than 63% compared with alternatives), Magazine Luiza 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 Magazine Luiza. Sales Growth has a value of 54 which means that currently professionals expect the company to grow more than 54% of its competitors. Profit Growth with a value of 92 and Capital Growth with a rank of 92 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 3, which means that stock returns have recently been below 97% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 63, is a buy recommendation for growth and momentum investors. Magazine Luiza has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for Magazine Luiza, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. 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. ...read more

GROWTH METRICS 2021 2022 2023 2024
REVENUE GROWTH
REVENUE GROWTH
PROFIT GROWTH
PROFIT GROWTH
CAPITAL GROWTH
CAPITAL GROWTH
STOCK RETURNS
STOCK RETURNS
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH

Last update of Growth Rank: 4-Jul-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Magazine Luiza.


Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 93 (better than 93% compared with alternatives) for 2024, the company Magazine Luiza has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Magazine Luiza 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 Magazine Luiza. Refinancing is at 93, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 93% of its competitors. Liquidity is also good at 61, meaning the company generates more profit to service its debt than 61% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 40, which means the company has an above-average debt-to-equity ratio. It has more debt than 60% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 93 (better than 93% compared with alternatives), Magazine Luiza has a financing structure that is significantly 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 Magazine Luiza 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 Magazine Luiza 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
REFINANCING
REFINANCING
LIQUIDITY
LIQUIDITY
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY

Last update of Safety Rank: 4-Jul-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Magazine Luiza and the more cash is available to service its debt.


Sentiment Metrics in Detail

SENTIMENT 2021 2022 2023 2024
ANALYST OPINIONS
ANALYST OPINIONS
OPINIONS CHANGE
OPINIONS CHANGE
PRO HOLDINGS
PRO HOLDINGS
MARKET PULSE
MARKET PULSE
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT

Last update of Sentiment Rank: 4-Jul-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Magazine Luiza.
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Free stock analysis by the purely fact based Obermatt Method for Magazine Luiza from July 4, 2024.

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