October 19, 2023
Top 10 Stock Microvast 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: Microvast – Top 10 Stock in Electromobility & Hydrogen
Microvast is listed as a top 10 stock on October 19, 2023 in the market index Electromobility because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 85 (top 85% performer), Obermatt assesses an overall strong buy recommendation for Microvast on October 19, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Heavy Machinery |
| Index | Electromobility, NASDAQ |
| Size class | Small |
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 Microvast Strong Buy
| 360 METRICS | October 19, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 97 |
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| SAFETY | ||||||||
| SAFETY | 39 |
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| SENTIMENT | ||||||||
| SENTIMENT | 76 |
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| 360° VIEW | ||||||||
| 360° VIEW | 85 |
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ANALYSIS: With an Obermatt 360° View of 85 (better than 85% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Microvast are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Microvast. The consolidated Growth Rank has a good rank of 97, 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 97% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 76, which means that professional investors are more optimistic about the stock than for 76% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 41, which means that the share price of Microvast is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 59% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 39, which means that the company has a financing structure that is riskier than those of 61% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 85, Microvast is better positioned than 85% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 97), and professional market sentiment is positive (Sentiment Rank of 76), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value 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 growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Microvast very positive
ANALYSIS: With an Obermatt Sentiment Rank of 76 (better than 76% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Microvast is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Microvast. Analyst Opinions are at a rank of 100 (better than 100% 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 50, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 56, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 56% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 25, which means that currently, professional investors hold less stock in this company than in 75% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 76 (more positive than 76% compared with investment alternatives), Microvast has a reputation among professional investors that is significantly higher than that of its competitors. Not having too many professionals invested in Microvast may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in Microvast. ...read more
Value Strategy: Microvast Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), Microvast shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Microvast. Price-to-Sales (P/S) is 53, which means that the stock price compared with what market professionals expect for future sales is lower than for 53% of comparable companies, indicating a good value concerning Microvast'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 82% of alternatives (18% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 1 are lower than average (dividends are expected to be lower than 99% 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 8, 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 41, is a hold recommendation based on Microvast's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Microvast 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). ...read more
Growth Strategy: Microvast Growth Momentum high
| GROWTH METRICS | October 19, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 100 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 84 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 81 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 41 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 97 |
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ANALYSIS: With an Obermatt Growth Rank of 97 (better than 97% compared with alternatives) for 2023, Microvast 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 but one indicator above average for Microvast. Sales Growth has a value of 100 which means that currently professionals expect the company to grow more than 100% of its competitors. Profit Growth with a value of 84 and Capital Growth with a rank of 81 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 41, which means that stock returns have recently been below 59% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 97, is a buy recommendation for growth and momentum investors. Microvast 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 Microvast, 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. ...read more
Safety Strategy: Microvast Debt Financing Safety below-average
| SAFETY METRICS | October 19, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 72 |
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| REFINANCING | ||||||||
| REFINANCING | 46 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 15 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 39 |
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ANALYSIS: With an Obermatt Safety Rank of 39 (better than 39% compared with alternatives), the company Microvast 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 Microvast 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 Microvast and the other two below average. Leverage is at a rank of 72 meaning the company has a below-average debt-to-equity ratio. It has less debt than 72% of its competitors.Refinancing is at a rank of 46, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 54% of its competitors. Liquidity is at a rank of 15, meaning that the company generates less profit to service its debt than 85% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 39 (worse than 61% compared with alternatives), Microvast has a financing structure that is riskier 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 Microvast are on the safer side. ...read more
Combined financial peformance: Microvast Above-Average Financial Performance
| COMBINED PERFORMANCE | October 19, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 97 |
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| SAFETY | ||||||||
| SAFETY | 15 |
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| COMBINED | ||||||||
| COMBINED | 67 |
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ANALYSIS: With an Obermatt Combined Rank of 67 (better than 67% compared with investment alternatives), Microvast (Heavy Machinery, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Microvast are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives), and are riskily financed (Safety Rank of 39, which means above-average debt burdens) but show above-average growth (Growth Rank of 97). ...read more
RECOMMENDATION: A Combined Rank of 67, is a buy recommendation based on Microvast's financial characteristics. As the company Microvast shows low value with an Obermatt Value Rank of 41 (59% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 97% of comparable companies (Obermatt Growth Rank is 97). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 39 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Microvast, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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