August 29, 2024
Top 10 Stock Matrix Service Sell 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: Matrix Service – Top 10 Stock in Dow Jones U.S. Oil Equipment & Services Index
Matrix Service is listed as a top 10 stock on August 29, 2024 in the market index D.J. US Oil Companies 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 6 (6% performer), Obermatt issues an overall sell recommendation for Matrix Service on August 29, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Construction & Engineering |
| Index | NASDAQ, D.J. US Oil Companies |
| Size class | Medium |
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 Matrix Service Sell
| 360 METRICS | August 29, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 43 |
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| GROWTH | ||||||||
| GROWTH | 51 |
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| SAFETY | ||||||||
| SAFETY | 28 |
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| SENTIMENT | ||||||||
| SENTIMENT | 15 |
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| 360° VIEW | ||||||||
| 360° VIEW | 6 |
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ANALYSIS: With an Obermatt 360° View of 6 (better than 6% compared with alternatives), overall professional sentiment and financial characteristics for the stock Matrix Service are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Matrix Service. The consolidated Growth Rank has a good rank of 51, 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 51% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 43 means that the share price of Matrix Service is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 57% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 28, which means that the company has a riskier financing structure than 72% 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 15, indicating professional investors are more pessimistic about the stock than for 85% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 6, Matrix Service is worse than 94% of all alternative stock investment opportunities based on the Obermatt Method. This means that Matrix Service shares are on the riskier side for investors. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 51), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 15), the company is rather risky when it comes to financing (Safety Rank of 28). The negative market view on Matrix Service 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 Matrix Service 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 Matrix Service negative
ANALYSIS: With an Obermatt Sentiment Rank of 15 (better than 15% compared with alternatives), overall professional sentiment and engagement for the stock Matrix Service is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Matrix Service. Analyst Opinions are at a rank of 79 (better than 79% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive and has a rank of 50 which means that currently, stock research experts are getting even more optimistic about investments in Matrix Service. But Market Pulse has a low rank of 2, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 98% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 15, which means that, currently, professional investors hold less stock in this company than in 85% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 15 (less encouraging than 85% compared with investment alternatives), Matrix Service has a reputation among professional investors that is far below that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: Matrix Service Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 43 (worse than 57% compared with alternatives), Matrix Service shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Matrix Service. Price-to-Sales (P/S) is 95, which means that the stock price compared with what market professionals expect for future sales is lower than for 95% of comparable companies, indicating a good value concerning Matrix Service's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 82% of alternatives (18% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 1 are lower than average (dividends are expected to be lower than 99% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 3, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 43, is a hold recommendation based on Matrix Service's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Matrix Service may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: Matrix Service Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 51 (better than 51% compared with alternatives), Matrix Service 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 Matrix Service. 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 61. But Capital Growth has only a rank of 22, which means that currently professionals expect the company to grow its invested capital less than 78% 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 51, 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 61% 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. ...read more
Safety Strategy: Matrix Service Debt Financing Safety below-average
| SAFETY METRICS | August 29, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 83 |
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| REFINANCING | ||||||||
| REFINANCING | 52 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 1 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 28 |
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ANALYSIS: With an Obermatt Safety Rank of 28 (better than 28% compared with alternatives), the company Matrix Service 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 Matrix Service 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 Matrix Service.Leverage is at 83, meaning the company has a below-average debt-to-equity ratio. It has less debt than 83% of its competitors.Refinancing is at a rank of 52, 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 52% of its competitors. Liquidity is at 1, meaning that the company generates less profit to service its debt than 99% 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 28 (worse than 72% compared with alternatives), Matrix Service 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: Matrix Service Lowest Financial Performance
| COMBINED PERFORMANCE | August 29, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 43 |
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| GROWTH | ||||||||
| GROWTH | 51 |
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| SAFETY | ||||||||
| SAFETY | 1 |
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| COMBINED | ||||||||
| COMBINED | 18 |
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ANALYSIS: With an Obermatt Combined Rank of 18 (worse than 82% compared with investment alternatives), Matrix Service (Construction & Engineering, USA) shares have lower financial characteristics compared with similar stocks. Shares of Matrix Service are low in value (priced high) with a consolidated Value Rank of 43 (worse than 57% of alternatives), and are riskily financed (Safety Rank of 28, which means above-average debt burdens) but show above-average growth (Growth Rank of 51). ...read more
RECOMMENDATION: A Combined Rank of 18, is a sell recommendation based on Matrix Service's financial characteristics. As the company Matrix Service shows low value with an Obermatt Value Rank of 43 (57% 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 51% of comparable companies (Obermatt Growth Rank is 51). 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 28 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 Matrix Service, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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