October 31, 2024
Top 10 Stock Falabella 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: Falabella – Top 10 Stock in SDG 4: Quality Education
investors.falabella.comSpanishiniciodefault.aspx
Falabella is listed as a top 10 stock on October 31, 2024 in the market index SDG 4 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 32 (32% performer), Obermatt assesses an overall hold recommendation for Falabella on October 31, 2024.
Snapshot: Obermatt Ranks
| Country | Chile |
| Industry | Department Stores |
| Index | IPSA, Good Governace Growth Markets, Renewables Users, SDG 1, SDG 10, SDG 11, SDG 3, SDG 4 |
| Size class | XX-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 Falabella Hold
| 360 METRICS | October 31, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 27 |
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| GROWTH | ||||||||
| GROWTH | 91 |
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| SAFETY | ||||||||
| SAFETY | 36 |
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| SENTIMENT | ||||||||
| SENTIMENT | 23 |
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| 360° VIEW | ||||||||
| 360° VIEW | 32 |
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ANALYSIS: With an Obermatt 360° View of 32 (better than 32% compared with alternatives), overall professional sentiment and financial characteristics for the stock Falabella are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Falabella. The consolidated Growth Rank has a good rank of 91, 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. It ranks higher than 91% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 27 means that the share price of Falabella is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 73% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 36, which means that the company has a riskier financing structure than 64% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 23, indicating professional investors are more pessimistic about the stock than for 77% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 32, Falabella is worse than 68% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 91), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 23), the company is rather risky when it comes to financing (Safety Rank of 36). The negative market view on Falabella may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of Falabella compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Falabella negative
ANALYSIS: With an Obermatt Sentiment Rank of 23 (better than 23% compared with alternatives), overall professional sentiment and engagement for the stock Falabella is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Falabella. Analyst Opinions are at a rank of 13 (worse than 87% 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 71, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in Falabella. But the Professional Investors rank is low at 47, which means that professional investors hold less stock in this company than in 53% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 10, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 90% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 23 (less encouraging than 77% compared with investment alternatives), Falabella has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: Falabella Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 27 (worse than 73% compared with alternatives), Falabella 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 Falabella. 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 63, which means that the stock price is lower compared with invested capital than for 63% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 44 which means the stock price compared with what market professionals expect for future profits is higher than 56% of comparable companies, indicating a low value concerning Falabella'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 63 and for the dividend yields rank which is lower than for 77% 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 27, is a hold recommendation based on Falabella's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Falabella, 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: Falabella Growth Momentum high
| GROWTH METRICS | October 31, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 18 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 100 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 81 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 93 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 91 |
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ANALYSIS: With an Obermatt Growth Rank of 91 (better than 91% compared with alternatives) for 2024, Falabella shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Falabella. Profit Growth has a rank of 100 which means that currently professionals expect the company to grow its profits more than 100% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 81, and Stock Returns has a rank of 93 which means that the stock returns have recently been above 93% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 18 (82% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 91, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Falabella Debt Financing Safety below-average
| SAFETY METRICS | October 31, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 56 |
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| REFINANCING | ||||||||
| REFINANCING | 50 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 10 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 36 |
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ANALYSIS: With an Obermatt Safety Rank of 36 (better than 36% compared with alternatives), the company Falabella 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 Falabella 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 where two out of three are above average for Falabella.Leverage is at 56, meaning the company has a below-average debt-to-equity ratio. It has less debt than 56% of its competitors.Refinancing is at a rank of 50, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 50% of its competitors. Liquidity is at 10, meaning that the company generates less profit to service its debt than 90% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 36 (worse than 64% compared with alternatives), Falabella has a financing structure that is riskier than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: Falabella Above-Average Financial Performance
| COMBINED PERFORMANCE | October 31, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 27 |
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| GROWTH | ||||||||
| GROWTH | 91 |
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| SAFETY | ||||||||
| SAFETY | 10 |
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| COMBINED | ||||||||
| COMBINED | 56 |
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ANALYSIS: With an Obermatt Combined Rank of 56 (better than 56% compared with investment alternatives), Falabella (Department Stores, Chile) shares have above-average financial characteristics compared with similar stocks. Shares of Falabella are low in value (priced high) with a consolidated Value Rank of 27 (worse than 73% of alternatives), and are riskily financed (Safety Rank of 36, which means above-average debt burdens) but show above-average growth (Growth Rank of 91). ...read more
RECOMMENDATION: A Combined Rank of 56, is a buy recommendation based on Falabella's financial characteristics. As the company Falabella shows low value with an Obermatt Value Rank of 27 (73% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 91% of comparable companies (Obermatt Growth Rank is 91). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 36 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Falabella, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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