Fact based stock research
Babcock (LSE:BAB)

GB0009697037

How to read the free 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.

Babcock stock research in summary

babcockinternational.com

ANALYSIS: With an Obermatt Combined Rank of 1 (worse than 99% compared with investment alternatives), Babcock (Aerospace & Defense, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of Babcock are low in value (priced high) with a consolidated Value Rank of 27 (worse than 73% of alternatives), show below-average growth (Growth Rank of 33), and are riskily financed (Safety Rank of 8), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 1, is a sell recommendation based on Babcock's financial characteristics. As the company Babcock's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 27), low growth (Obermatt Growth Rank of 33), and risky financing practices (Obermatt Safety Rank of 8), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. 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	27
Growth Rank	33
Safety Rank	8
Combined Rank	1

Country	United Kingdom
Industry	Aerospace & Defense
Index	FTSE All Shares, FTSE 250, FTSE 350, Dividends Europe
Size class	Large

This stock has achievements: Top 10 Stock.

31-Jul-2025. 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: Babcock

RESEARCH HISTORY	2022	2023	2024	2025
VALUE
VALUE	76	13	45	27
GROWTH
GROWTH	11	57	38	33
SAFETY
SAFETY	1	3	1	8
SENTIMENT
SENTIMENT	31	43	93	^new
360° VIEW
360° VIEW	4	5	25	^new

Most recent update of the stock research: 31-Jul-2025. Financial reporting date used for calculating ranks: 31-Mar-2025. Stock research history is based on the Obermatt Method. The higher the rank, the better Babcock is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2022	2023	2024	2025
VALUE
VALUE	76	13	45	27
GROWTH
GROWTH	11	57	38	33
SAFETY
SAFETY	1	3	1	8
COMBINED
COMBINED	8	3	4	1

Last update of combined financial performance: 31-Jul-2025. Stock analysis on combined financial performance: The higher the rank of Babcock the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 27 (worse than 73% compared with alternatives), Babcock shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Babcock. Price-to-Sales is 49 which means that the stock price compared with what market professionals expect for future profits is higher than 51% of comparable companies, indicating a low value concerning Babcock'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 Babcock. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 45 and Dividend Yield, which is lower than 80% 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 27, is a hold recommendation based on Babcock's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Babcock? 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 Babcock? 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. Babcock 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	2022	2023	2024	2025
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	83	72	58	49
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	84	3	57	45
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	20	10	18	12
DIVIDEND YIELD
DIVIDEND YIELD	88	33	28	20
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	76	13	45	27

Last update of Value Rank: 31-Jul-2025. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Babcock; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 33 (better than 33% compared with alternatives), Babcock shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Babcock. Profit Growth has a rank of 51, which means that currently professionals expect the company to grow its profits more than 51% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 89 (above 89% of alternative investments). But Sales Growth has a below the median rank of 23, which means that, currently, professionals expect the company to grow less than 77% of its competitors, and Capital Growth also has a lower rank of 27. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 33, is a hold 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 Babcock. 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, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2022	2023	2024	2025
REVENUE GROWTH
REVENUE GROWTH	10	14	27	23
PROFIT GROWTH
PROFIT GROWTH	13	94	88	51
CAPITAL GROWTH
CAPITAL GROWTH	8	44	18	27
STOCK RETURNS
STOCK RETURNS	97	73	67	89
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	11	57	38	33

Last update of Growth Rank: 31-Jul-2025. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Babcock.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 8 (better than 8% compared with alternatives), the company Babcock 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 Babcock 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 Babcock. Liquidity is at 56, meaning the company generates more profit to service its debt than 56% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 16, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 84% of its competitors. Leverage is also high at a rank of 11, which means that the company has an above-average debt-to-equity ratio. It has more debt than 89% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 8 (worse than 92% compared with alternatives), Babcock has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2022	2023	2024	2025
LEVERAGE
LEVERAGE	3	7	7	11
REFINANCING
REFINANCING	5	9	12	16
LIQUIDITY
LIQUIDITY	12	39	30	56
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	1	3	1	8

Last update of Safety Rank: 31-Jul-2025. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Babcock and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2022	2023	2024	2025
ANALYST OPINIONS
ANALYST OPINIONS	n/a	64	64	^new
OPINIONS CHANGE
OPINIONS CHANGE	63	50	96	^new
PRO HOLDINGS
PRO HOLDINGS	68	22	72	^new
MARKET PULSE
MARKET PULSE	22	52	54	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	31	43	93	^new

Last update of Sentiment Rank: 31-Jul-2025. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Babcock.
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