Fact based stock research
JB Hi-Fi (ASX:JBH)
AU000000JBH7
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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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JB Hi-Fi stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 45 (worse than 55% compared with investment alternatives), JB Hi-Fi (Electronics Retail, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of JB Hi-Fi are low in value (priced high) with a consolidated Value Rank of 25 (worse than 75% of alternatives). But they show above-average growth (Growth Rank of 65) and are safely financed (Safety Rank of 51, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 45, is a hold recommendation based on JB Hi-Fi's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company JB Hi-Fi exhibits low value (Obermatt Value Rank of 25), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 65). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 51) 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
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: JB Hi-Fi
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 76 |
|
57 |
|
51 |
|
25 |
|
| GROWTH | ||||||||
| GROWTH | 20 |
|
47 |
|
43 |
|
65 |
|
| SAFETY | ||||||||
| SAFETY | 62 |
|
44 |
|
55 |
|
51 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
52 |
|
39 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
53 |
|
34 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 45 (worse than 55% compared with investment alternatives), JB Hi-Fi (Electronics Retail, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of JB Hi-Fi are low in value (priced high) with a consolidated Value Rank of 25 (worse than 75% of alternatives). But they show above-average growth (Growth Rank of 65) and are safely financed (Safety Rank of 51, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 45, is a hold recommendation based on JB Hi-Fi's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company JB Hi-Fi exhibits low value (Obermatt Value Rank of 25), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 65). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 51) 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
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 76 |
|
57 |
|
51 |
|
25 |
|
| GROWTH | ||||||||
| GROWTH | 20 |
|
47 |
|
43 |
|
65 |
|
| SAFETY | ||||||||
| SAFETY | 62 |
|
44 |
|
55 |
|
51 |
|
| COMBINED | ||||||||
| COMBINED | 89 |
|
48 |
|
51 |
|
45 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 25 (worse than 75% compared with alternatives), JB Hi-Fi shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for JB Hi-Fi. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 63% 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 46 which means that the stock price compared with what market professionals expect for future profits is higher than 54% of comparable companies, indicating a low value concerning JB Hi-Fi's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 21 which means that the stock price compared with what market professionals expect for future profit levels is higher than 79% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 14 is also low. Compared with invested capital, the stock price is higher than for 86% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 25, is a hold recommendation based on JB Hi-Fi's stock price compared with the company's operational size and dividend yields. Should dividend investors pick JB Hi-Fi? 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 JB Hi-Fi 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) | 66 |
|
67 |
|
60 |
|
46 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 71 |
|
65 |
|
50 |
|
21 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 20 |
|
29 |
|
22 |
|
14 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 92 |
|
88 |
|
79 |
|
63 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 76 |
|
57 |
|
51 |
|
25 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), JB Hi-Fi 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 JB Hi-Fi. Sales Growth has a rank of 53 which means that currently professionals expect the company to grow more than 53% of its competitors. Stock Returns are also above average with a rank of 99. But Capital Growth has only a rank of 39, which means that currently professionals expect the company to grow its invested capital less than 61% of its competitors. Profit Growth is also low, with a rank of only 30, 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 65, 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 99% 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 | 8 |
|
6 |
|
20 |
|
53 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 52 |
|
25 |
|
8 |
|
30 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
89 |
|
72 |
|
39 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 36 |
|
53 |
|
79 |
|
99 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 20 |
|
47 |
|
43 |
|
65 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 51 (better than 51% compared with alternatives), the company JB Hi-Fi 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 JB Hi-Fi 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 JB Hi-Fi. Leverage is at a rank of 57, meaning the company has a below-average debt-to-equity ratio. It has less debt than 57% of its competitors. Liquidity is also good at a rank of 58, meaning the company generates more profit to service its debt than 58% 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 34, 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 66% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 51 (better than 51% compared with alternatives), JB Hi-Fi 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 JB Hi-Fi. 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 JB Hi-Fi 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 | 61 |
|
50 |
|
55 |
|
57 |
|
| REFINANCING | ||||||||
| REFINANCING | 35 |
|
26 |
|
38 |
|
34 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 95 |
|
63 |
|
61 |
|
58 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 62 |
|
44 |
|
55 |
|
51 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
31 |
|
9 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
50 |
|
50 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
40 |
|
52 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
85 |
|
67 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
52 |
|
39 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for JB Hi-Fi from December 19, 2024.
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