Fact based stock research
NEXTDC (ASX:NXT)

AU000000NXT8

How to read the free 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.

NEXTDC stock research in summary

nextdc.com

ANALYSIS: With an Obermatt Combined Rank of 6 (worse than 94% compared with investment alternatives), NEXTDC (Internet Services & Infrastructure, Australia) shares have lower financial characteristics compared with similar stocks. Shares of NEXTDC are low in value (priced high) with a consolidated Value Rank of 33 (worse than 67% of alternatives), show below-average growth (Growth Rank of 25), and are riskily financed (Safety Rank of 25), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 6, is a sell recommendation based on NEXTDC's financial characteristics. As the company NEXTDC's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 33), low growth (Obermatt Growth Rank of 25), and risky financing practices (Obermatt Safety Rank of 25), 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. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to 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	33
Growth Rank	25
Safety Rank	25
Combined Rank	6

Country	Australia
Industry	Internet Services & Infrastructure
Index	ASX 100, ASX 200, ASX 300
Size class	Small

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: NEXTDC

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	17	11	25	33
GROWTH
GROWTH	61	75	31	25
SAFETY
SAFETY	30	15	16	25
SENTIMENT
SENTIMENT	n/a	45	60	^new
360° VIEW
360° VIEW	n/a	19	8	^new

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

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	17	11	25	33
GROWTH
GROWTH	61	75	31	25
SAFETY
SAFETY	30	15	16	25
COMBINED
COMBINED	30	8	1	6

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 33 (worse than 67% compared with alternatives), NEXTDC shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for NEXTDC. Price-to-Profit (also referred to as price-earnings, P/E) is 55 which means that the stock price compared with what market professionals expect for future profits is lower than for 55% of comparable companies, indicating a good value concerning NEXTDC'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 78, which means that the stock price is lower as regards to invested capital than for 78% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 95% of alternatives (only 5% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 33, is a hold recommendation based on NEXTDC's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. 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 especially important 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)	15	10	3	5
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	26	3	55	55
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	43	67	55	78
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	17	11	25	33

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 25 (better than 25% compared with alternatives), NEXTDC 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, with half of the indicators below and half above average for NEXTDC. Sales Growth has a rank of 73 which means that currently professionals expect the company to grow more than 73% of its competitors. Stock Returns are also above average with a rank of 55. But Capital Growth has only a rank of 7, which means that currently professionals expect the company to grow its invested capital less than 93% of its competitors. Profit Growth is also low, with a rank of only 12, 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 25, is a hold 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 55% 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	45	79	62	73
PROFIT GROWTH
PROFIT GROWTH	85	86	4	12
CAPITAL GROWTH
CAPITAL GROWTH	n/a	37	10	7
STOCK RETURNS
STOCK RETURNS	44	53	91	55
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	61	75	31	25

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 25 (better than 25% compared with alternatives), the company NEXTDC 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 NEXTDC 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, with just one indicator above average for NEXTDC and the other two below average. Refinancing is at 61, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 61% of its competitors. But Leverage is high with a rank of 21, meaning the company has an above-average debt-to-equity ratio. It has more debt than 79% of its competitors. Liquidity is also on the riskier side with a rank of 18, meaning the company generates less profit to service its debt than 82% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 25 (worse than 75% compared with alternatives), NEXTDC has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for NEXTDC are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with NEXTDC 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	41	19	14	21
REFINANCING
REFINANCING	41	62	48	61
LIQUIDITY
LIQUIDITY	35	10	26	18
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	30	15	16	25

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of NEXTDC 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	86	97	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	44	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	7	1	^new
MARKET PULSE
MARKET PULSE	n/a	47	78	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	45	60	^new

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