June 13, 2024
Top 10 Stock Edenred Strong Buy 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: Edenred – Top 10 Stock in Cotation Assistée en Continu All-Tradable Index CAC
Edenred is listed as a top 10 stock on June 13, 2024 in the market index CAC All because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 83 (top 83% performer), Obermatt assesses an overall strong buy recommendation for Edenred on June 13, 2024.
Snapshot: Obermatt Ranks
| Country | France |
| Industry | Data Processing & Outsourcing |
| Index | CAC All, SBF 120, Dividends Europe, Employee Focus EU |
| 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 Edenred Strong Buy
| 360 METRICS | June 13, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 98 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 22 |
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| SENTIMENT | ||||||||
| SENTIMENT | 64 |
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| 360° VIEW | ||||||||
| 360° VIEW | 83 |
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ANALYSIS: With an Obermatt 360° View of 83 (better than 83% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Edenred are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Edenred. The consolidated Value Rank has an attractive rank of 98, which means that the share price of Edenred is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 98% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 61, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 64. But the company’s financing is risky with a Safety rank of 22. This means 78% of comparable companies have a safer financing structure than Edenred. ...read more
RECOMMENDATION: With a consolidated 360° View of 83, Edenred is better positioned than 83% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 98), above-average growth (Growth Rank of 61), and positive market sentiment in the professional investor community (Sentiment Rank of 64), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 22), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Edenred is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Edenred positive
ANALYSIS: With an Obermatt Sentiment Rank of 64 (better than 64% compared with alternatives), overall professional sentiment and engagement for the stock Edenred is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Edenred. Analyst Opinions are at a rank of 39 (worse than 61% 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 46, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 76, which means that professional investors hold more stock in this company than in 76% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 62, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 62% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Edenred and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 64 (more positive than 64% compared with investment alternatives), Edenred has a reputation among professional investors that is above-average compared with 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: Edenred Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 98 (better than 98% compared with alternatives) for 2024, Edenred shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Edenred. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 59 which means that the stock price compared with what market professionals expect for future profits is lower than for 59% of comparable companies, indicating a good value concerning Edenred's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 100, and for Dividend Yield with a Dividend Yield Rank of 91. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 64% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 36). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 98, is a buy recommendation based on Edenred's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Edenred has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Edenred shares. ...read more
Growth Strategy: Edenred Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), Edenred shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Edenred. Sales Growth has a value of 72 which means that currently professionals expect the company to grow more than 72% of its competitors. Profit Growth with a value of 63 and Capital Growth with a rank of 71 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 22, which means that stock returns have recently been below 78% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 61, is a buy recommendation for growth and momentum investors. Edenred has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for Edenred, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. ...read more
Safety Strategy: Edenred Debt Financing Safety risky
| SAFETY METRICS | June 13, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 1 |
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| REFINANCING | ||||||||
| REFINANCING | 12 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 59 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 22 |
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ANALYSIS: With an Obermatt Safety Rank of 22 (better than 22% compared with alternatives), the company Edenred 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 Edenred 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 Edenred. Liquidity is at 59, meaning the company generates more profit to service its debt than 59% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 12, 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 88% of its competitors. Leverage is also high at a rank of 1, which means that the company has an above-average debt-to-equity ratio. It has more debt than 99% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 22 (worse than 78% compared with alternatives), Edenred 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. ...read more
Combined financial peformance: Edenred Top Financial Performance
| COMBINED PERFORMANCE | June 13, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 98 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 59 |
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| COMBINED | ||||||||
| COMBINED | 78 |
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ANALYSIS: With an Obermatt Combined Rank of 78 (better than 78% compared with investment alternatives), Edenred (Data Processing & Outsourcing, France) shares have much better financial characteristics than comparable stocks. Shares of Edenred are a good value (attractively priced) with a consolidated Value Rank of 98 (better than 98% of alternatives), show above-average growth (Growth Rank of 61) but are riskily financed (Safety Rank of 22), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 78, is a strong buy recommendation based on Edenred's financial characteristics. As the company Edenred's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 98) and above-average growth (Obermatt Growth Rank of 61), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 22) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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