Fact based stock research
Alcoa (NYSE:AA)

US0138721065

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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.

Alcoa stock research in summary

alcoa.comglobalenhome.asp

ANALYSIS: With an Obermatt Combined Rank of 37 (worse than 63% compared with investment alternatives), Alcoa (Aluminum, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Alcoa are a good value (attractively priced) with a consolidated Value Rank of 50 (better than 50% of alternatives), show above-average growth (Growth Rank of 65) but are riskily financed (Safety Rank of 27), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 37, is a hold recommendation based on Alcoa's financial characteristics. As the company Alcoa's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 50) and above-average growth (Obermatt Growth Rank of 65), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 27) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. 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

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	50
Growth Rank	65
Safety Rank	27
Combined Rank	37

Country	USA
Industry	Aluminum
Index	Low Emissions, Energy Efficient, Diversity USA, Renewables Users, Water Efficiency
Size class	X-Large

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

Further information

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

Research History: Alcoa

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	21	41	55	50
GROWTH
GROWTH	43	97	15	65
SAFETY
SAFETY	39	57	70	27
SENTIMENT
SENTIMENT	n/a	35	8	^new
360° VIEW
360° VIEW	n/a	63	18	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Alcoa is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	21	41	55	50
GROWTH
GROWTH	43	97	15	65
SAFETY
SAFETY	39	57	70	27
COMBINED
COMBINED	29	83	33	37

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Alcoa the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 50 (better than 50% compared with alternatives), Alcoa 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 Alcoa. Price-to-Sales (P/S) is 75, which means that the stock price compared with what market professionals expect for future sales is lower than for 75% of comparable companies, indicating a good value concerning Alcoa's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 57, which means that dividends are expected to be higher than for 57% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 62% of alternatives (only 38% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 72% of comparable companies, 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 50, is a buy recommendation based on Alcoa's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. 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 especially important 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)	57	73	87	75
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	45	54	28	28
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	30	15	48	38
DIVIDEND YIELD
DIVIDEND YIELD	1	43	59	57
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	21	41	55	50

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Alcoa; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), Alcoa 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 Alcoa. Sales Growth has a rank of 51 which means that currently, professionals expect the company to grow more than 51% of its competitors. Both Profit Growth, with a rank of 79, and Stock Returns, with a rank of 59, are also above average. But Capital Growth only has a rank of 44, which means that, currently, professionals expect the company to grow its invested capital less than 56% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. 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	29	50	45	51
PROFIT GROWTH
PROFIT GROWTH	n/a	88	4	79
CAPITAL GROWTH
CAPITAL GROWTH	n/a	84	82	44
STOCK RETURNS
STOCK RETURNS	100	97	11	59
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	43	97	15	65

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Alcoa.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 27 (better than 27% compared with alternatives), the company Alcoa 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 Alcoa 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 Alcoa. Liquidity is at 13, meaning that the company generates less profit to service its debt than 87% 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 49, meaning the company has an above-average debt-to-equity ratio. It has more debt than 51% of its competitors. Finally, Refinancing is at a rank of 48 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 52% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 27 (worse than 73% compared with alternatives), Alcoa has a financing structure that is 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 Alcoa because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	42	34	56	49
REFINANCING
REFINANCING	26	96	73	48
LIQUIDITY
LIQUIDITY	67	37	60	13
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	39	57	70	27

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Alcoa 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	82	17	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	8	11	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	11	17	^new
MARKET PULSE
MARKET PULSE	n/a	84	39	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	35	8	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Alcoa.
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