Fact based stock research
Harvey Norman (ASX:HVN)

AU000000HVN7

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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.

Harvey Norman stock research in summary

harveynormanholdings.com.au

ANALYSIS: With an Obermatt Combined Rank of 73 (better than 73% compared with investment alternatives), Harvey Norman (General Merchandise Stores, Australia) shares have above-average financial characteristics compared with similar stocks. Shares of Harvey Norman are a good value (attractively priced) with a consolidated Value Rank of 73 (better than 73% of alternatives), show above-average growth (Growth Rank of 71) but are riskily financed (Safety Rank of 42), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 73, is a buy recommendation based on Harvey Norman's financial characteristics. As the company Harvey Norman's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 73) and above-average growth (Obermatt Growth Rank of 71), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 42) 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. 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	73
Growth Rank	71
Safety Rank	42
Combined Rank	73

Country	Australia
Industry	General Merchandise Stores
Index	ASX 200, ASX 300
Size class	Large

This stock has achievements: Top 10 Stock.

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

Further information

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

Research History: Harvey Norman

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	85	69	59	73
GROWTH
GROWTH	20	11	35	71
SAFETY
SAFETY	76	55	44	42
SENTIMENT
SENTIMENT	n/a	44	71	^new
360° VIEW
360° VIEW	n/a	29	50	^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 Harvey Norman is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	85	69	59	73
GROWTH
GROWTH	20	11	35	71
SAFETY
SAFETY	76	55	44	42
COMBINED
COMBINED	98	27	42	73

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 73 (better than 73% compared with alternatives), Harvey Norman shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Harvey Norman. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 78 which means that the stock price compared with what market professionals expect for future profits is lower than for 78% of comparable companies, indicating a good value concerning Harvey Norman'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 65, and for Dividend Yield with a Dividend Yield Rank of 90. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 69% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 31). 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 73, is a buy recommendation based on Harvey Norman'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 Harvey Norman 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 Harvey Norman shares. 9. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	30	31	27	31
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	94	78	59	78
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	61	62	70	65
DIVIDEND YIELD
DIVIDEND YIELD	94	98	88	90
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	85	69	59	73

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 71 (better than 71% compared with alternatives), Harvey Norman 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 half of the indicators below and half above average for Harvey Norman. Sales Growth has a rank of 75 which means that currently professionals expect the company to grow more than 75% of its competitors. Stock Returns are also above average with a rank of 75. But Capital Growth has only a rank of 36, which means that currently professionals expect the company to grow its invested capital less than 64% of its competitors. Profit Growth is also low, with a rank of only 45, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 71, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 75% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. 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	27	26	75	75
PROFIT GROWTH
PROFIT GROWTH	61	13	8	45
CAPITAL GROWTH
CAPITAL GROWTH	n/a	7	39	36
STOCK RETURNS
STOCK RETURNS	42	67	43	75
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	20	11	35	71

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 42 (better than 42% compared with alternatives), the company Harvey Norman 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 Harvey Norman 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 Harvey Norman and the other two below average. Refinancing is at 56, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 56% of its competitors. But Leverage is high with a rank of 43, meaning the company has an above-average debt-to-equity ratio. It has more debt than 57% of its competitors. Liquidity is also on the riskier side with a rank of 37, meaning the company generates less profit to service its debt than 63% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 42 (worse than 58% compared with alternatives), Harvey Norman 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 Harvey Norman 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 Harvey Norman 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	40	54	49	43
REFINANCING
REFINANCING	77	52	60	56
LIQUIDITY
LIQUIDITY	81	52	37	37
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	76	55	44	42

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Harvey Norman 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	60	7	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	75	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	28	84	^new
MARKET PULSE
MARKET PULSE	n/a	65	67	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	44	71	^new

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