Fact based stock research
adidas (XTRA:ADS)

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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.

adidas stock research in summary

adidas-group.com

ANALYSIS: With an Obermatt Combined Rank of 42 (worse than 58% compared with investment alternatives), adidas (Apparel, Accessories, Luxury, Germany) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of adidas are low in value (priced high) with a consolidated Value Rank of 16 (worse than 84% of alternatives), and are riskily financed (Safety Rank of 14, which means above-average debt burdens) but show above-average growth (Growth Rank of 98). ...read more

RECOMMENDATION: A Combined Rank of 42, is a hold recommendation based on adidas's financial characteristics. As the company adidas shows low value with an Obermatt Value Rank of 16 (84% 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 98% of comparable companies (Obermatt Growth Rank is 98). 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 14 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 adidas, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	16
Growth Rank	98
Safety Rank	14
Combined Rank	42

Country	Germany
Industry	Apparel, Accessories, Luxury
Index	CDAX, DAX 40, EURO STOXX 50, Employee Focus EU, Diversity Europe, Human Rights
Size class	XX-Large

This stock has achievements: Gold Winner CEO, Top 10 Stock.

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

Further information

Multiple opinions. One number.

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: adidas

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	33	25	17	16
GROWTH
GROWTH	26	51	75	98
SAFETY
SAFETY	46	35	17	14
SENTIMENT
SENTIMENT	n/a	23	35	^new
360° VIEW
360° VIEW	n/a	15	21	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better adidas is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	33	25	17	16
GROWTH
GROWTH	26	51	75	98
SAFETY
SAFETY	46	35	17	14
COMBINED
COMBINED	21	23	21	42

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of adidas the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 16 (worse than 84% compared with alternatives), adidas shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for adidas. Price-to-Sales is 38 which means that the stock price compared with what market professionals expect for future profits is higher than 62% of comparable companies, indicating a low value concerning adidas's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 12, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of adidas. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 19 and Dividend Yield, which is lower than 76% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 16, is a sell recommendation based on adidas's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for adidas? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as adidas? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. adidas may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	30	41	41	38
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	41	28	13	19
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	18	20	14	12
DIVIDEND YIELD
DIVIDEND YIELD	69	19	20	24
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	33	25	17	16

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of adidas; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 98 (better than 98% compared with alternatives) for 2024, adidas 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 adidas. Sales Growth has a value of 78, which means that, currently, professionals expect the company to grow more than 78% of its competitors. The same is valid for Profit Growth with a value of 100 and for Capital Growth with 100. In addition, Stock Returns had an above-average rank value of 70, which means they have been higher than 70% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 98, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, adidas 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. 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	39	52	62	78
PROFIT GROWTH
PROFIT GROWTH	68	79	8	100
CAPITAL GROWTH
CAPITAL GROWTH	n/a	66	90	100
STOCK RETURNS
STOCK RETURNS	10	7	97	70
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	26	51	75	98

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of adidas.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 14 (better than 14% compared with alternatives), the company adidas has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of adidas 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 adidas. Liquidity is at 14, meaning that the company generates less profit to service its debt than 86% 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 19, meaning the company has an above-average debt-to-equity ratio. It has more debt than 81% of its competitors. Finally, Refinancing is at a rank of 30 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 70% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 14 (worse than 86% compared with alternatives), adidas has a financing structure that is significantly 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. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of adidas because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	54	28	18	19
REFINANCING
REFINANCING	31	47	23	30
LIQUIDITY
LIQUIDITY	67	40	28	14
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	46	35	17	14

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of adidas and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	47	40	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	44	74	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	29	7	^new
MARKET PULSE
MARKET PULSE	n/a	38	21	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	23	35	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for adidas.
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