Fact based stock research
Digital Garage (TSE:4819)

JP3549070005

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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.

Digital Garage stock research in summary

garage.co.jp

ANALYSIS: With an Obermatt Combined Rank of 19 (worse than 81% compared with investment alternatives), Digital Garage (IT Consulting & oth. Services, Japan) shares have lower financial characteristics compared with similar stocks. Shares of Digital Garage are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives), show below-average growth (Growth Rank of 35), and are riskily financed (Safety Rank of 30), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 19, is a sell recommendation based on Digital Garage's financial characteristics. As the company Digital Garage's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 49), low growth (Obermatt Growth Rank of 35), and risky financing practices (Obermatt Safety Rank of 30), 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	49
Growth Rank	35
Safety Rank	30
Combined Rank	19

Country	Japan
Industry	IT Consulting & oth. Services
Index	Moonshot Tech
Size class	Medium

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

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

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

Research History: Digital Garage

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	77	89	59	49
GROWTH
GROWTH	97	61	1	35
SAFETY
SAFETY	83	59	35	30
SENTIMENT
SENTIMENT	n/a	22	32	^new
360° VIEW
360° VIEW	n/a	74	4	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Digital Garage is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	77	89	59	49
GROWTH
GROWTH	97	61	1	35
SAFETY
SAFETY	83	59	35	30
COMBINED
COMBINED	100	94	4	19

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Digital Garage the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Digital Garage shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Digital Garage. Expected dividend yields are higher than for 70% of comparable companies (a Dividend Yield rank of 70), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 67, which means that the stock price is lower compared with invested capital than for 67% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 33 which means that the stock price compared with what market professionals expect for future profits is higher than for 67% of comparable companies, indicating a low value concerning Digital Garage's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Digital Garage with a rank of 23. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 77% of comparable companies, indicating a low value concerning Digital Garage's profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Digital Garage's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Digital Garage may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. 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)	37	52	38	33
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	94	84	51	23
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	46	80	75	67
DIVIDEND YIELD
DIVIDEND YIELD	69	66	60	70
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	77	89	59	49

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Digital Garage; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 35 (better than 35% compared with alternatives), Digital Garage 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 Digital Garage. Capital Growth has a rank of 61, which means that currently professionals expect the company to grow its invested capital more than 1% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 65 (above 65% of alternative investments). But Sales Growth has only a rank of 48, which means that, currently, professionals expect the company to grow less than 52% of its competitors, and Profit Growth is also low at a rank of 1. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 35, 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 Digital Garage, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. 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	81	1	1	48
PROFIT GROWTH
PROFIT GROWTH	n/a	94	12	1
CAPITAL GROWTH
CAPITAL GROWTH	n/a	59	11	61
STOCK RETURNS
STOCK RETURNS	90	75	19	65
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	97	61	1	35

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Digital Garage.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 30 (better than 30% compared with alternatives), the company Digital Garage 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 Digital Garage 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 Digital Garage and the other two below average. Refinancing is at 58, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 58% of its competitors. But Leverage is high with a rank of 17, meaning the company has an above-average debt-to-equity ratio. It has more debt than 83% of its competitors. Liquidity is also on the riskier side with a rank of 40, meaning the company generates less profit to service its debt than 60% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 30 (worse than 70% compared with alternatives), Digital Garage has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Digital Garage are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Digital Garage and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	38	11	9	17
REFINANCING
REFINANCING	88	86	88	58
LIQUIDITY
LIQUIDITY	74	51	19	40
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	83	59	35	30

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Digital Garage 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	9	100	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	82	1	^new
MARKET PULSE
MARKET PULSE	n/a	12	15	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	22	32	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Digital Garage.
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