December 21, 2023
Top 10 Stock Prosus 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 Prosus Strong Buy

360 METRICS	December 21, 2023
VALUE
VALUE	39
GROWTH
GROWTH	89
SAFETY
SAFETY	74
SENTIMENT
SENTIMENT	76
360° VIEW
360° VIEW	93

ANALYSIS: With an Obermatt 360° View of 93 (better than 93% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Prosus are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Prosus. The consolidated Growth Rank has a good rank of 89, 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 89% of competitors in the same industry. The consolidated Safety Rank at 74 means that the company has a financing structure that is safer than 74% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank 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 is less desirable at 39, meaning that the share price of Prosus is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 61% of alternative stocks in the same industry. ...read more

RECOMMENDATION: With a consolidated 360° View of 93, Prosus is better positioned than 93% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 89), a safe financing structure (Safety Rank of 74), and positive professional market sentiment (Sentiment Rank of 76), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. 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 more do you pay for the stock of Prosus compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (89% better than peers). The value rank could be the reverse reflection of that (11%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more

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Sentiment Strategy: Professional Market Sentiment for Prosus very positive

SENTIMENT METRICS	December 21, 2023
ANALYST OPINION
ANALYST OPINION	63
OPINIONS CHANGE
OPINIONS CHANGE	97
PRO HOLDINGS
PRO HOLDINGS	65
MARKET PULSE
MARKET PULSE	29
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	76

ANALYSIS: With an Obermatt Sentiment Rank of 76 (better than 76% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Prosus is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Prosus. Analyst Opinions are at a rank of 63 (better than 63% 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 97, 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 Prosus. Finally, the Professional Investors rank is 65, which means that currently, professional investors hold more stock in this company than in 65% of alternative investment opportunities. ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 76 (more positive than 76% compared with investment alternatives), Prosus 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 29, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 71% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Prosus 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

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Value Strategy: Prosus Stock Price Value below-average critical

VALUE METRICS	December 21, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	1
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	39
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	51
DIVIDEND YIELD
DIVIDEND YIELD	70
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	39

ANALYSIS: With an Obermatt Value Rank of 39 (worse than 61% compared with alternatives), Prosus shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Prosus. Expected dividend yields are higher than for 70% of comparable companies (a Dividend Yield rank of 70), 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 51, which means that the stock price is lower compared with invested capital than for 51% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 1 which means that the stock price compared with what market professionals expect for future profits is higher than for 99% of comparable companies, indicating a low value concerning Prosus's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Prosus with a rank of 39. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 61% of comparable companies, indicating a low value concerning Prosus's profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 39, is a hold recommendation based on Prosus'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, Prosus 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

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Growth Strategy: Prosus Growth Momentum high

GROWTH METRICS	December 21, 2023
REVENUE GROWTH
REVENUE GROWTH	85
PROFIT GROWTH
PROFIT GROWTH	87
CAPITAL GROWTH
CAPITAL GROWTH	52
STOCK RETURNS
STOCK RETURNS	58
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	89

ANALYSIS: With an Obermatt Growth Rank of 89 (better than 89% compared with alternatives) for 2023, Prosus 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 Prosus. Sales Growth has a value of 85, which means that, currently, professionals expect the company to grow more than 85% of its competitors. The same is valid for Profit Growth with a value of 87 and for Capital Growth with 52. In addition, Stock Returns had an above-average rank value of 58, which means they have been higher than 58% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 89, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Prosus 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

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Safety Strategy: Prosus Debt Financing Safety above-average

SAFETY METRICS	December 21, 2023
LEVERAGE
LEVERAGE	85
REFINANCING
REFINANCING	51
LIQUIDITY
LIQUIDITY	31
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	74

ANALYSIS: With an Obermatt Safety Rank of 74 (better than 74% compared with alternatives), the company Prosus has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Prosus 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 where two out of three are above average for Prosus.Leverage is at 85, meaning the company has a below-average debt-to-equity ratio. It has less debt than 85% of its competitors.Refinancing is at a rank of 51, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 51% of its competitors. Liquidity is at 31, meaning that the company generates less profit to service its debt than 69% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 74 (better than 74% compared with alternatives), Prosus has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more

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Combined financial peformance: Prosus Top Financial Performance

COMBINED PERFORMANCE	December 21, 2023
VALUE
VALUE	39
GROWTH
GROWTH	89
SAFETY
SAFETY	31
COMBINED
COMBINED	93

ANALYSIS: With an Obermatt Combined Rank of 93 (better than 93% compared with investment alternatives), Prosus (Internet Retail, Netherlands) shares have much better financial characteristics than comparable stocks. Shares of Prosus are low in value (priced high) with a consolidated Value Rank of 39 (worse than 61% of alternatives). But they show above-average growth (Growth Rank of 89) and are safely financed (Safety Rank of 74, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 93, is a strong buy recommendation based on Prosus's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Prosus exhibits low value (Obermatt Value Rank of 39), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 89). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 74) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more

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