Fact based stock research
Brinker (NYSE:EAT)

US1096411004

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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).

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Brinker stock research in summary

brinker.com

ANALYSIS: With an Obermatt Combined Rank of 25 (worse than 75% compared with investment alternatives), Brinker (Restaurants, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Brinker are low in value (priced high) with a consolidated Value Rank of 5 (worse than 95% of alternatives), and are riskily financed (Safety Rank of 38, which means above-average debt burdens) but show above-average growth (Growth Rank of 85). ...read more

RECOMMENDATION: A Combined Rank of 25, is a hold recommendation based on Brinker's financial characteristics. As the company Brinker shows low value with an Obermatt Value Rank of 5 (95% 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 85% of comparable companies (Obermatt Growth Rank is 85). 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 38 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 Brinker, 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	5
Growth Rank	85
Safety Rank	38
Combined Rank	25

Country	USA
Industry	Restaurants
Index	Dividends USA
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: Brinker

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	93	99	86	5
GROWTH
GROWTH	72	5	61	85
SAFETY
SAFETY	7	12	16	38
SENTIMENT
SENTIMENT	n/a	56	58	^new
360° VIEW
360° VIEW	n/a	27	59	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 25-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Brinker is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	93	99	86	5
GROWTH
GROWTH	72	5	61	85
SAFETY
SAFETY	7	12	16	38
COMBINED
COMBINED	33	24	59	25

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 5 (worse than 95% compared with alternatives), Brinker 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 Brinker. Price-to-Sales is 42 which means that the stock price compared with what market professionals expect for future profits is higher than 58% of comparable companies, indicating a low value concerning Brinker'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 Brinker. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 44 and Dividend Yield, which is lower than 99% 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 5, is a sell recommendation based on Brinker's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Brinker? 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 Brinker? 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. Brinker 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)	80	93	85	42
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	93	97	90	44
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	100	81	97	3
DIVIDEND YIELD
DIVIDEND YIELD	1	72	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	93	99	86	5

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 85 (better than 85% compared with alternatives) for 2024, Brinker 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 half of the indicators below and half above average for Brinker. Profit Growth has a rank of 84, which means that currently professionals expect the company to grow its profits more than 84% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 100 (above 100% of alternative investments). But Sales Growth has a below the median rank of 39, which means that, currently, professionals expect the company to grow less than 61% of its competitors, and Capital Growth also has a lower rank of 40. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 85, 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 Brinker. 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	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	78	17	39	39
PROFIT GROWTH
PROFIT GROWTH	27	22	60	84
CAPITAL GROWTH
CAPITAL GROWTH	n/a	15	49	40
STOCK RETURNS
STOCK RETURNS	28	5	67	100
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	72	5	61	85

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 38 (better than 38% compared with alternatives), the company Brinker 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 Brinker 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 Brinker. Liquidity is at 72, meaning the company generates more profit to service its debt than 72% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 43, 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 57% of its competitors. Leverage is also high at a rank of 32, which means that the company has an above-average debt-to-equity ratio. It has more debt than 68% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 38 (worse than 62% compared with alternatives), Brinker has a financing structure that is 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	2021	2022	2023	2024
LEVERAGE
LEVERAGE	6	12	20	32
REFINANCING
REFINANCING	6	10	16	43
LIQUIDITY
LIQUIDITY	33	78	50	72
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	7	12	16	38

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Brinker 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	35	3	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	54	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	72	78	^new
MARKET PULSE
MARKET PULSE	n/a	42	71	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	56	58	^new

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