Fact based stock research
Murata Manufacturing (TSE:6981)

JP3914400001

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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.

Murata Manufacturing stock research in summary

murata.com

ANALYSIS: With an Obermatt Combined Rank of 39 (worse than 61% compared with investment alternatives), Murata Manufacturing (Electronic Components, Japan) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Murata Manufacturing are low in value (priced high) with a consolidated Value Rank of 19 (worse than 81% of alternatives) and show below-average growth (Growth Rank of 41) but are safely financed (Safety Rank of 87), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 39, is a hold recommendation based on Murata Manufacturing's financial characteristics. As the company Murata Manufacturing's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 19) and low growth (Obermatt Growth Rank of 41), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 87) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. 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	19
Growth Rank	41
Safety Rank	87
Combined Rank	39

Country	Japan
Industry	Electronic Components
Index	TOPIX 100, Low Emissions, Energy Efficient
Size class	X-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: Murata Manufacturing

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	75	9	11	19
GROWTH
GROWTH	63	27	55	41
SAFETY
SAFETY	98	81	89	87
SENTIMENT
SENTIMENT	n/a	6	54	^new
360° VIEW
360° VIEW	n/a	13	43	^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 Murata Manufacturing is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	75	9	11	19
GROWTH
GROWTH	63	27	55	41
SAFETY
SAFETY	98	81	89	87
COMBINED
COMBINED	93	17	45	39

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 19 (worse than 81% compared with alternatives), Murata Manufacturing shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators where three out of four are below average for Murata Manufacturing. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 53, which means that the stock price is lower compared with invested capital than for 53% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 20 which means the stock price compared with what market professionals expect for future profits is higher than 80% of comparable companies, indicating a low value concerning Murata Manufacturing's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 53 and for the dividend yields rank which is lower than for 66% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 19, is a sell recommendation based on Murata Manufacturing's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Murata Manufacturing, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. 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)	43	16	16	20
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	81	21	33	43
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	60	44	50	53
DIVIDEND YIELD
DIVIDEND YIELD	74	18	34	34
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	75	9	11	19

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 41 (better than 41% compared with alternatives), Murata Manufacturing shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for Murata Manufacturing. Profit Growth, with a rank of 58 (better than 58% of its competitors), and Capital Growth, with a rank of 65, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 34, which means that, currently, professionals expect the company to grow less than 66% of its competitors, and Stock Returns are at a rank of 33. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 41, is a hold recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. 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	33	30	33	34
PROFIT GROWTH
PROFIT GROWTH	25	37	63	58
CAPITAL GROWTH
CAPITAL GROWTH	n/a	48	43	65
STOCK RETURNS
STOCK RETURNS	68	37	55	33
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	63	27	55	41

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 87 (better than 87% compared with alternatives) for 2024, the company Murata Manufacturing has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Murata Manufacturing 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 Murata Manufacturing. Leverage is at a rank of 88, meaning the company has a below-average debt-to-equity ratio. It has less debt than 88% of its competitors. Liquidity is also good at a rank of 92, meaning the company generates more profit to service its debt than 92% 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 45, 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 55% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 87 (better than 87% compared with alternatives), Murata Manufacturing has a financing structure that is significantly 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 Murata Manufacturing. 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 Murata Manufacturing 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	74	80	86	88
REFINANCING
REFINANCING	62	35	35	45
LIQUIDITY
LIQUIDITY	100	95	93	92
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	98	81	89	87

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Murata Manufacturing 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	45	37	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	30	88	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	25	100	^new
MARKET PULSE
MARKET PULSE	n/a	12	18	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	6	54	^new

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