Fact based stock research
Kyushu Railway (TSE:9142)

JP3247010006

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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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Kyushu Railway stock research in summary

jrkyushu.co.jp

ANALYSIS: With an Obermatt Combined Rank of 85 (better than 85% compared with investment alternatives), Kyushu Railway (Railroads, Japan) shares have much better financial characteristics than comparable stocks. Shares of Kyushu Railway are low in value (priced high) with a consolidated Value Rank of 45 (worse than 55% of alternatives). But they show above-average growth (Growth Rank of 77) and are safely financed (Safety Rank of 77, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 85, is a strong buy recommendation based on Kyushu Railway's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Kyushu Railway exhibits low value (Obermatt Value Rank of 45), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 77). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 77) 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	45
Growth Rank	77
Safety Rank	77
Combined Rank	85

Country	Japan
Industry	Railroads
Index
Size class	Large

19-Dec-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: Kyushu Railway

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	68	89	78	45
GROWTH
GROWTH	44	75	67	77
SAFETY
SAFETY	13	39	69	77
SENTIMENT
SENTIMENT	n/a	34	55	^new
360° VIEW
360° VIEW	n/a	71	83	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Kyushu Railway is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	68	89	78	45
GROWTH
GROWTH	44	75	67	77
SAFETY
SAFETY	13	39	69	77
COMBINED
COMBINED	26	86	88	85

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Kyushu Railway the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 45 (worse than 55% compared with alternatives), Kyushu Railway 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 Kyushu Railway. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 62, which means that the stock price compared with what market professionals expect for future profits is lower than for 62% of comparable companies, indicating a good value concerning Kyushu Railway's profit levels. But Price-to-Sales is 45 which means that the stock price compared with what market professionals expect for future profits is higher than for 55% of comparable companies, indicating a low value concerning Kyushu Railway's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 38 and for dividend yield, which is lower than for 57% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 45, is a hold recommendation based on Kyushu Railway's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then Kyushu Railway is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. 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)	68	62	41	45
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	1	55	84	62
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	80	88	67	38
DIVIDEND YIELD
DIVIDEND YIELD	82	72	63	43
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	68	89	78	45

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Kyushu Railway; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 77 (better than 77% compared with alternatives) for 2024, Kyushu Railway 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 half of the indicators below and half above average for Kyushu Railway. Sales Growth has a rank of 90 which means that currently professionals expect the company to grow more than 90% of its competitors. Stock Returns are also above average with a rank of 85. But Capital Growth has only a rank of 28, which means that currently professionals expect the company to grow its invested capital less than 72% of its competitors. Profit Growth is also low, with a rank of only 38, 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 77, 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 85% 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	23	69	31	90
PROFIT GROWTH
PROFIT GROWTH	n/a	70	71	38
CAPITAL GROWTH
CAPITAL GROWTH	n/a	47	59	28
STOCK RETURNS
STOCK RETURNS	72	57	61	85
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	44	75	67	77

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Kyushu Railway.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 77 (better than 77% compared with alternatives) for 2024, the company Kyushu Railway has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Kyushu Railway 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 Kyushu Railway. Refinancing is at 57, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 57% of its competitors. Liquidity is also good at 88, meaning the company generates more profit to service its debt than 88% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 44, which means the company has an above-average debt-to-equity ratio. It has more debt than 56% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 77 (better than 77% compared with alternatives), Kyushu Railway has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Kyushu Railway could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Kyushu Railway 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	28	68	44	44
REFINANCING
REFINANCING	26	51	57	57
LIQUIDITY
LIQUIDITY	21	4	74	88
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	13	39	69	77

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Kyushu Railway 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	1	22	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	72	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	100	96	^new
MARKET PULSE
MARKET PULSE	n/a	15	24	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	34	55	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Kyushu Railway.
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