November 28, 2024
Top 10 Stock CD Projekt Hold 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: CD Projekt – Top 10 Stock in Warszawski Warsaw Indeks Giełdowy WIG 20
CD Projekt is listed as a top 10 stock on November 28, 2024 in the market index WIG 20 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the 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 42 (42% performer), Obermatt assesses an overall hold recommendation for CD Projekt on November 28, 2024.
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 CD Projekt Hold
| 360 METRICS | November 28, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 17 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 91 |
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| SENTIMENT | ||||||||
| SENTIMENT | 57 |
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| 360° VIEW | ||||||||
| 360° VIEW | 42 |
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ANALYSIS: With an Obermatt 360° View of 42 (better than 42% compared with alternatives), overall professional sentiment and financial characteristics for the stock CD Projekt are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for CD Projekt. The consolidated Sentiment Rank has a good rank of 57, which means that professional investors are more optimistic about the stock than for 57% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 91 or better than 91% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 17, meaning that the share price of CD Projekt is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 33. ...read more
RECOMMENDATION: With a consolidated 360° View of 42, CD Projekt is worse than 58% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 57) and safe financing practices (Safety Rank of 91), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of CD Projekṭ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for CD Projekt positive
ANALYSIS: With an Obermatt Sentiment Rank of 57 (better than 57% compared with alternatives), overall professional sentiment and engagement for the stock CD Projekt is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for CD Projekt. Analyst Opinions are at a rank of 1 (worse than 99% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in CD Projekt. Even better, the Professional Investors rank is 69, meaning that professional investors hold more stock in this company than in 69% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 96, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 96% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 57 (more positive than 57% compared with investment alternatives), CD Projekt has a reputation among professional investors that is above-average compared with that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: CD Projekt Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 17 (worse than 83% compared with alternatives), CD Projekt shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for CD Projekt. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 69% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 1 which means that the stock price compared with what market professionals expect for future profits is higher than 99% of comparable companies, indicating a low value concerning CD Projekt's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 3 which means that the stock price compared with what market professionals expect for future profit levels is higher than 97% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 18 is also low. Compared with invested capital, the stock price is higher than for 82% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 17, is a sell recommendation based on CD Projekt's stock price compared with the company's operational size and dividend yields. Should dividend investors pick CD Projekt? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose CD Projekt only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: CD Projekt Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 33 (better than 33% compared with alternatives), CD Projekt 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 CD Projekt. Capital Growth has a rank of 81, which means that currently professionals expect the company to grow its invested capital more than 8% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 85 (above 85% of alternative investments). But Sales Growth has only a rank of 1, which means that, currently, professionals expect the company to grow less than 99% of its competitors, and Profit Growth is also low at a rank of 8. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 33, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for CD Projekt, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: CD Projekt Debt Financing Safety very solid
| SAFETY METRICS | November 28, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 92 |
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| REFINANCING | ||||||||
| REFINANCING | 54 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 98 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 91 |
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ANALYSIS: With an Obermatt Safety Rank of 91 (better than 91% compared with alternatives) for 2024, the company CD Projekt has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of CD Projekt is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for CD Projekt. Leverage is at 92, meaning the company has a below-average debt-to-equity ratio. It has less debt than 92% of its competitors. Refinancing is at a rank of 54, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 54% of its competitors. Finally, Liquidity is also good at a rank of 98, which means that the company generates more profit to service its debt than 98% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 91 (better than 91% compared with alternatives), CD Projekt has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: CD Projekt Below-Average Financial Performance
| COMBINED PERFORMANCE | November 28, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 17 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| COMBINED | ||||||||
| COMBINED | 37 |
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ANALYSIS: With an Obermatt Combined Rank of 37 (worse than 63% compared with investment alternatives), CD Projekt (Interactive Home Entertainment, Poland) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of CD Projekt are low in value (priced high) with a consolidated Value Rank of 17 (worse than 83% of alternatives) and show below-average growth (Growth Rank of 33) but are safely financed (Safety Rank of 91), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 37, is a hold recommendation based on CD Projekt's financial characteristics. As the company CD Projekt's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 17) and low growth (Obermatt Growth Rank of 33), 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. In this case, good financing practices (Obermatt Safety Rank of 91) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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