January 30, 2025
Top 10 Stock Aristocrat 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: Aristocrat – Top 10 Stock in Australian Securities Exchange Index ASX 50
Aristocrat is listed as a top 10 stock on January 30, 2025 in the market index ASX 50 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 53 (high 53% performer), Obermatt assesses an overall buy recommendation for Aristocrat on January 30, 2025.
Snapshot: Obermatt Ranks
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 Aristocrat Buy
| 360 METRICS | January 30, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 7 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 45 |
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| SENTIMENT | ||||||||
| SENTIMENT | 88 |
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| 360° VIEW | ||||||||
| 360° VIEW | 53 |
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ANALYSIS: With an Obermatt 360° View of 53 (better than 53% compared with alternatives), overall professional sentiment and financial characteristics for the stock Aristocrat are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Aristocrat. The consolidated Growth Rank has a good rank of 67, 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 67% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 88, which means that professional investors are more optimistic about the stock than for 88% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 7, which means that the share price of Aristocrat 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 93% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 45, which means that the company has a financing structure that is riskier than those of 55% 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 53, Aristocrat is better positioned than 53% 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 67), and professional market sentiment is positive (Sentiment Rank of 88), 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 Aristocrat very positive
ANALYSIS: With an Obermatt Sentiment Rank of 88 (better than 88% compared with alternatives) for 2025, overall professional sentiment and engagement for the stock Aristocrat is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Aristocrat. Analyst Opinions are at a rank of 78 (better than 78% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 60, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Aristocrat. The Professional Investors rank is 83, which means that currently, professional investors hold more stock in this company than in 83% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 78 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 78% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 88 (more positive than 88% compared with investment alternatives), Aristocrat has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Aristocrat stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Aristocrat Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 7 (worse than 93% compared with alternatives), Aristocrat 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 Aristocrat. Price-to-Sales is 7 which means that the stock price compared with what market professionals expect for future profits is higher than 93% of comparable companies, indicating a low value concerning Aristocrat's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 3, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Aristocrat. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 24 and Dividend Yield, which is lower than 67% 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 7, is a sell recommendation based on Aristocrat's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Aristocrat? 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 Aristocrat? 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. Aristocrat 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. ...read more
Growth Strategy: Aristocrat Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 67 (better than 67% compared with alternatives), Aristocrat 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 half of the indicators below and half above average for Aristocrat. Profit Growth has a rank of 62, which means that currently professionals expect the company to grow its profits more than 62% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 97 (above 97% of alternative investments). But Sales Growth has a below the median rank of 4, which means that, currently, professionals expect the company to grow less than 96% of its competitors, and Capital Growth also has a lower rank of 49. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 67, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Aristocrat. ...read more
Safety Strategy: Aristocrat Debt Financing Safety below-average
| SAFETY METRICS | January 30, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 53 |
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| REFINANCING | ||||||||
| REFINANCING | 26 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 45 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 45 |
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ANALYSIS: With an Obermatt Safety Rank of 45 (better than 45% compared with alternatives), the company Aristocrat 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 Aristocrat 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 Aristocrat and the other two below average. Leverage is at a rank of 53 meaning the company has a below-average debt-to-equity ratio. It has less debt than 53% of its competitors.Refinancing is at a rank of 26, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 74% of its competitors. Liquidity is at a rank of 45, meaning that the company generates less profit to service its debt than 55% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 45 (worse than 55% compared with alternatives), Aristocrat 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 Aristocrat are on the safer side. ...read more
Combined financial peformance: Aristocrat Below-Average Financial Performance
| COMBINED PERFORMANCE | January 30, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 7 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 45 |
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| COMBINED | ||||||||
| COMBINED | 32 |
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ANALYSIS: With an Obermatt Combined Rank of 32 (worse than 68% compared with investment alternatives), Aristocrat (Casinos & Gaming, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Aristocrat are low in value (priced high) with a consolidated Value Rank of 7 (worse than 93% of alternatives), and are riskily financed (Safety Rank of 45, which means above-average debt burdens) but show above-average growth (Growth Rank of 67). ...read more
RECOMMENDATION: A Combined Rank of 32, is a hold recommendation based on Aristocrat's financial characteristics. As the company Aristocrat shows low value with an Obermatt Value Rank of 7 (93% 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 67% of comparable companies (Obermatt Growth Rank is 67). 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 45 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 Aristocrat, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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