October 10, 2024
Top 10 Stock Nektar Hold 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: Nektar – Top 10 Stock in Dow Jones U.S. Pharmaceuticals Index
Nektar is listed as a top 10 stock on October 10, 2024 in the market index D.J. US Pharmaceutical because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 34 (34% performer), Obermatt assesses an overall hold recommendation for Nektar on October 10, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Pharmaceuticals |
| Index | NASDAQ, D.J. US Pharmaceutical, S&P MIDCAP |
| Size class | Small |
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 Nektar Hold
| 360 METRICS | October 10, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 9 |
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| GROWTH | ||||||||
| GROWTH | 79 |
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| SAFETY | ||||||||
| SAFETY | 94 |
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| SENTIMENT | ||||||||
| SENTIMENT | 7 |
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| 360° VIEW | ||||||||
| 360° VIEW | 34 |
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ANALYSIS: With an Obermatt 360° View of 34 (better than 34% compared with alternatives), overall professional sentiment and financial characteristics for the stock Nektar are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Nektar. The consolidated Growth Rank has a good rank of 79, 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. This means that growth is higher than for 79% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 94 which means that the company has a financing structure that is safer than 94% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 9 which means that the share price of Nektar is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 91% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 7, which means that professional investors are more pessimistic about the stock than for 93% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 34, Nektar is worse than 66% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 79), and the company is safely financed (Safety Rank of 94). However, professional market sentiment is low(Sentiment Rank of 7). The negative market view on Nektar 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 board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Nektar compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred 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 if the value rank is above 60. As market sentiment is low, 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 Nektar negative
ANALYSIS: With an Obermatt Sentiment Rank of 7 (better than 7% compared with alternatives), overall professional sentiment and engagement for the stock Nektar is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Nektar. Analyst Opinions are at a rank of 9 (worse than 91% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in Nektar. But the Professional Investors rank is low at 40, which means that professional investors hold less stock in this company than in 60% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 12, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 88% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 7 (less encouraging than 93% compared with investment alternatives), Nektar has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: Nektar Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 9 (worse than 91% compared with alternatives), Nektar 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 Nektar. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 81, which means that the stock price compared with what market professionals expect for future profits is lower than for 81% of comparable companies, indicating a good value concerning Nektar's profit levels. But Price-to-Sales is 37 which means that the stock price compared with what market professionals expect for future profits is higher than for 63% of comparable companies, indicating a low value concerning Nektar'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 9 and for dividend yield, which is lower than for 99% 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 9, is a sell recommendation based on Nektar'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 Nektar 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. ...read more
Growth Strategy: Nektar Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 79 (better than 79% compared with alternatives) for 2024, Nektar 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 all but one indicator above average for Nektar. Sales Growth has a rank of 64 which means that currently, professionals expect the company to grow more than 64% of its competitors. Both Profit Growth, with a rank of 68, and Stock Returns, with a rank of 97, are also above average. But Capital Growth only has a rank of 15, which means that, currently, professionals expect the company to grow its invested capital less than 85% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 79, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: Nektar Debt Financing Safety very solid
| SAFETY METRICS | October 10, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 100 |
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| REFINANCING | ||||||||
| REFINANCING | 93 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 23 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 94 |
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ANALYSIS: With an Obermatt Safety Rank of 94 (better than 94% compared with alternatives) for 2024, the company Nektar has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Nektar 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 where two out of three are above average for Nektar.Leverage is at 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors.Refinancing is at a rank of 93, 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 93% of its competitors. Liquidity is at 23, meaning that the company generates less profit to service its debt than 77% 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 94 (better than 94% compared with alternatives), Nektar has a financing structure that is significantly safer 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: Nektar Above-Average Financial Performance
| COMBINED PERFORMANCE | October 10, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 9 |
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| GROWTH | ||||||||
| GROWTH | 79 |
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| SAFETY | ||||||||
| SAFETY | 23 |
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| COMBINED | ||||||||
| COMBINED | 72 |
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ANALYSIS: With an Obermatt Combined Rank of 72 (better than 72% compared with investment alternatives), Nektar (Pharmaceuticals, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Nektar are low in value (priced high) with a consolidated Value Rank of 9 (worse than 91% of alternatives). But they show above-average growth (Growth Rank of 79) and are safely financed (Safety Rank of 94, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 72, is a buy recommendation based on Nektar's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Nektar exhibits low value (Obermatt Value Rank of 9), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 79). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 94) 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). ...read more
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