Fact based stock research
HMS Networks (OM:HMS)

SE0009997018

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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.

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(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

HMS Networks stock research in summary

hms-networks.com

ANALYSIS: With an Obermatt Combined Rank of 36 (worse than 64% compared with investment alternatives), HMS Networks (Communications Equipment, Sweden) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of HMS Networks are low in value (priced high) with a consolidated Value Rank of 8 (worse than 92% of alternatives). But they show above-average growth (Growth Rank of 61) and are safely financed (Safety Rank of 71, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 36, is a hold recommendation based on HMS Networks's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company HMS Networks exhibits low value (Obermatt Value Rank of 8), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 61). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 71) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). 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	8
Growth Rank	61
Safety Rank	71
Combined Rank	36

Country	Sweden
Industry	Communications Equipment
Index
Size class	Small

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: HMS Networks

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	9	4	3	8
GROWTH
GROWTH	89	85	75	61
SAFETY
SAFETY	46	48	57	71
SENTIMENT
SENTIMENT	n/a	71	57	^new
360° VIEW
360° VIEW	n/a	37	34	^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 HMS Networks is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	9	4	3	8
GROWTH
GROWTH	89	85	75	61
SAFETY
SAFETY	46	48	57	71
COMBINED
COMBINED	43	28	30	36

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 8 (worse than 92% compared with alternatives), HMS Networks shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for HMS Networks. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 52% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 3 which means that the stock price compared with what market professionals expect for future profits is higher than 97% of comparable companies, indicating a low value concerning HMS Networks's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 15 which means that the stock price compared with what market professionals expect for future profit levels is higher than 85% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 11 is also low. Compared with invested capital, the stock price is higher than for 89% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 8, is a sell recommendation based on HMS Networks's stock price compared with the company's operational size and dividend yields. Should dividend investors pick HMS Networks? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose HMS Networks only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	4	1	1	3
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	38	9	9	15
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	1	3	1	11
DIVIDEND YIELD
DIVIDEND YIELD	1	50	48	52
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	9	4	3	8

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), HMS Networks 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 HMS Networks. Sales Growth has a rank of 94 which means that currently professionals expect the company to grow more than 94% of its competitors. Stock Returns are also above average with a rank of 70. But Capital Growth has only a rank of 17, which means that currently professionals expect the company to grow its invested capital less than 83% of its competitors. Profit Growth is also low, with a rank of only 35, 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 61, 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 70% 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	65	78	6	94
PROFIT GROWTH
PROFIT GROWTH	n/a	56	67	35
CAPITAL GROWTH
CAPITAL GROWTH	n/a	24	73	17
STOCK RETURNS
STOCK RETURNS	90	97	97	70
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	89	85	75	61

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 71 (better than 71% compared with alternatives), the company HMS Networks has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of HMS Networks is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for HMS Networks. 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. Liquidity is also good at a rank of 96, meaning the company generates more profit to service its debt than 96% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower 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. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 71 (better than 71% compared with alternatives), HMS Networks has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for HMS Networks. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with HMS Networks 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	54	72	70	79
REFINANCING
REFINANCING	10	3	7	12
LIQUIDITY
LIQUIDITY	83	83	88	96
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	46	48	57	71

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of HMS Networks 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	17	42	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	96	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	50	77	^new
MARKET PULSE
MARKET PULSE	n/a	70	56	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	71	57	^new

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