February 13, 2025
Top 10 Stock Dunelm Sell 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: Dunelm – Top 10 Stock in FTSE All Share Index
Dunelm is listed as a top 10 stock on February 13, 2025 in the market index FTSE All Shares because of its high performance in at least one of the Obermatt investment strategies. All consolidated Obermatt Ranks are below-average. Based on the Obermatt Method, an investment in the company is not advisable today. Based on the Obermatt 360° View of 14 (14% performer), Obermatt issues an overall sell recommendation for Dunelm on February 13, 2025.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Homefurnishing Retail |
| Index | FTSE All Shares, FTSE 250, FTSE 350, Diversity Europe |
| Size class | Large |
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 Dunelm Sell
| 360 METRICS | February 13, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 38 |
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| GROWTH | ||||||||
| GROWTH | 24 |
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| SAFETY | ||||||||
| SAFETY | 37 |
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| SENTIMENT | ||||||||
| SENTIMENT | 42 |
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| 360° VIEW | ||||||||
| 360° VIEW | 14 |
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ANALYSIS: With an Obermatt 360° View of 14 (better than 14% compared with alternatives), overall professional sentiment and financial characteristics for the stock Dunelm are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with all four indicators below average for Dunelm. The consolidated Value Rank has a low rank of 38 which means that the share price of Dunelm 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 62% of alternative stocks in the same industry. The consolidated Growth Rank also has a low rank of 24, which means that the company exhibits below-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 lower than for 24% of competitors in the same industry. The consolidated Safety Rank has a riskier rank of 37, which means that the company has a riskier financing structure than 63% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a low rank of 42, which means that professional investors are more pessimistic about the stock than for 58% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 14, Dunelm is worse than 86% of all alternative stock investment opportunities based on the Obermatt Method. This means that Dunelm shares are on the riskier side for investors. As all consolidated Obermatt Ranks are below-average, this is a risky stock investment proposition, especially since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 42. The negative market view on Dunelm may stem from the high stock price (low value), the low level of growth, or the risky financing structures. That's several problems with no good news anywhere. Based on the current information, we don’t see any compelling arguments to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not confirmed by investor behavior today. While Dunelm may have a bright future, it is reflected in neither the financial indicators nor the market sentiment. ...read more
Sentiment Strategy: Professional Market Sentiment for Dunelm only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 42 (better than 42% compared with alternatives), overall professional sentiment and engagement for the stock Dunelm is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Dunelm. Analyst Opinions are at a rank of 33 (worse than 67% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 8, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 58, which means that professional investors hold more stock in this company than in 58% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 81, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 81% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Dunelm and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 42 (less encouraging than 58% compared with investment alternatives), Dunelm has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Dunelm Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 38 (worse than 62% compared with alternatives), Dunelm 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 Dunelm. Price-to-Profit (also referred to as price-earnings, P/E) is 53 which means that the stock price compared with what market professionals expect for future profits is lower than for 53% of comparable companies, indicating a good value concerning Dunelm's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 7, which means that the stock price is lower as regards to invested capital than for 7% of comparable investments. On the other hand, Price-to-Sales is less favorable than 85% of alternatives (only 15% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 4% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 38, is a hold recommendation based on Dunelm's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Dunelm Growth Momentum negative
| GROWTH METRICS | February 13, 2025 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 53 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 48 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 10 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 40 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 24 |
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ANALYSIS: With an Obermatt Growth Rank of 24 (better than 24% compared with alternatives), Dunelm shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for Dunelm. While Sales Growth ranks at 53, professionals currently expect the company to grow more than 53% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 48, which means that, currently, professionals expect the company to grow its profits less than 52% of its competitors, and Capital Growth has a low rank of 10. Historic stock returns were also below average with a current Stock Returns rank of 40 which means that the stock returns have recently been below 60% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 24, is a sell recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more
Safety Strategy: Dunelm Debt Financing Safety below-average
| SAFETY METRICS | February 13, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 17 |
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| REFINANCING | ||||||||
| REFINANCING | 28 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 92 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 37 |
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ANALYSIS: With an Obermatt Safety Rank of 37 (better than 37% compared with alternatives), the company Dunelm 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 Dunelm 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 Dunelm. Liquidity is at 92, meaning the company generates more profit to service its debt than 92% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 28, 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 72% of its competitors. Leverage is also high at a rank of 17, which means that the company has an above-average debt-to-equity ratio. It has more debt than 83% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 37 (worse than 63% compared with alternatives), Dunelm 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. ...read more
Combined financial peformance: Dunelm Lowest Financial Performance
| COMBINED PERFORMANCE | February 13, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 38 |
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| GROWTH | ||||||||
| GROWTH | 24 |
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| SAFETY | ||||||||
| SAFETY | 92 |
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| COMBINED | ||||||||
| COMBINED | 6 |
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ANALYSIS: With an Obermatt Combined Rank of 6 (worse than 94% compared with investment alternatives), Dunelm (Homefurnishing Retail, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of Dunelm are low in value (priced high) with a consolidated Value Rank of 38 (worse than 62% of alternatives), show below-average growth (Growth Rank of 24), and are riskily financed (Safety Rank of 37), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 6, is a sell recommendation based on Dunelm's financial characteristics. As the company Dunelm's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 38), low growth (Obermatt Growth Rank of 24), and risky financing practices (Obermatt Safety Rank of 37), 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. ...read more
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