January 23, 2025
Top 10 Stock EDP Renovaveis 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: EDP Renovaveis – Top 10 Stock in PSI-20 Index
EDP Renovaveis is listed as a top 10 stock on January 23, 2025 in the market index PSI 20 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company enjoys a positive professional investor sentiment, but all financial facts speak against a stock purchase. This is probably an investment into the future. Based on the Obermatt 360° View of 17 (17% performer), Obermatt issues an overall sell recommendation for EDP Renovaveis on January 23, 2025.
Snapshot: Obermatt Ranks
| Country | Spain |
| Industry | Renewable Electricity |
| Index | Sound Pay Europe, PSI General, PSI 20 |
| 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 EDP Renovaveis Sell
| 360 METRICS | January 23, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 30 |
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| GROWTH | ||||||||
| GROWTH | 43 |
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| SAFETY | ||||||||
| SAFETY | 32 |
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| SENTIMENT | ||||||||
| SENTIMENT | 50 |
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| 360° VIEW | ||||||||
| 360° VIEW | 17 |
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ANALYSIS: With an Obermatt 360° View of 17 (better than 17% compared with alternatives), overall professional sentiment and financial characteristics for the stock EDP Renovaveis are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for EDP Renovaveis. The consolidated Sentiment Rank has a good rank of 50, which means that professional investors are more optimistic about the stock than for 50% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 30, which means that the share price of EDP Renovaveis is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 43, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 43% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 32 which means that the company has a riskier financing structure than 68% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 17, EDP Renovaveis is worse than 83% of all alternative stock investment opportunities based on the Obermatt Method. This means that EDP Renovaveis shares are on the riskier side for investors. As only the professional market sentiment (Sentiment Rank of 50) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of EDP Renovaveiṣ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for EDP Renovaveis positive
ANALYSIS: With an Obermatt Sentiment Rank of 50 (better than 50% compared with alternatives), overall professional sentiment and engagement for the stock EDP Renovaveis is above average. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for EDP Renovaveis. Analyst Opinions are at a rank of 53 (better than 53% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 62, which means that currently, professional investors hold more stock in this company than in 62% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 63 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 63% of competitors). But Analyst Opinions Change has a below-average rank of 32, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in EDP Renovaveis. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 50 (more positive than 50% compared with investment alternatives), EDP Renovaveis has a reputation among professional investors that is above-average compared with that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: EDP Renovaveis Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 30 (worse than 70% compared with alternatives), EDP Renovaveis shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators where three out of four are below average for EDP Renovaveis. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 75, which means that the stock price is lower compared with invested capital than for 75% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 18 which means the stock price compared with what market professionals expect for future profits is higher than 82% of comparable companies, indicating a low value concerning EDP Renovaveis's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 75 and for the dividend yields rank which is lower than for 65% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 30, is a hold recommendation based on EDP Renovaveis's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for EDP Renovaveis, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. ...read more
Growth Strategy: EDP Renovaveis Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 43 (better than 43% compared with alternatives), EDP Renovaveis 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 three out of four indicators below-average for EDP Renovaveis. While Sales Growth ranks at 84, professionals currently expect the company to grow more than 84% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 38, which means that, currently, professionals expect the company to grow its profits less than 62% of its competitors, and Capital Growth has a low rank of 7. Historic stock returns were also below average with a current Stock Returns rank of 25 which means that the stock returns have recently been below 75% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 43, is a hold 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: EDP Renovaveis Debt Financing Safety below-average
| SAFETY METRICS | January 23, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 79 |
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| REFINANCING | ||||||||
| REFINANCING | 15 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 26 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 32 |
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ANALYSIS: With an Obermatt Safety Rank of 32 (better than 32% compared with alternatives), the company EDP Renovaveis 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 EDP Renovaveis 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 EDP Renovaveis and the other two below average. Leverage is at a rank of 79 meaning the company has a below-average debt-to-equity ratio. It has less debt than 79% of its competitors.Refinancing is at a rank of 15, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 85% of its competitors. Liquidity is at a rank of 26, meaning that the company generates less profit to service its debt than 74% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 32 (worse than 68% compared with alternatives), EDP Renovaveis has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of EDP Renovaveis are on the safer side. ...read more
Combined financial peformance: EDP Renovaveis Lowest Financial Performance
| COMBINED PERFORMANCE | January 23, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 30 |
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| GROWTH | ||||||||
| GROWTH | 43 |
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| SAFETY | ||||||||
| SAFETY | 26 |
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| COMBINED | ||||||||
| COMBINED | 16 |
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ANALYSIS: With an Obermatt Combined Rank of 16 (worse than 84% compared with investment alternatives), EDP Renovaveis (Renewable Electricity, Spain) shares have lower financial characteristics compared with similar stocks. Shares of EDP Renovaveis are low in value (priced high) with a consolidated Value Rank of 30 (worse than 70% of alternatives), show below-average growth (Growth Rank of 43), and are riskily financed (Safety Rank of 32), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 16, is a sell recommendation based on EDP Renovaveis's financial characteristics. As the company EDP Renovaveis's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 30), low growth (Obermatt Growth Rank of 43), and risky financing practices (Obermatt Safety Rank of 32), 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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