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
ANALYSIS: With an Obermatt Combined Rank of 4 (worse than 96% 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 25 (worse than 75% of alternatives), show below-average growth (Growth Rank of 31), and are riskily financed (Safety Rank of 23), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 4, 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 25), low growth (Obermatt Growth Rank of 31), and risky financing practices (Obermatt Safety Rank of 23), 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
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360° ViewnewThis stock has achievements: Top 10 Stock.
14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
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.
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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 |
|
25 |
|
| GROWTH | ||||||||
| GROWTH | 61 |
|
75 |
|
31 |
|
31 |
|
| SAFETY | ||||||||
| SAFETY | 30 |
|
15 |
|
16 |
|
23 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
45 |
|
60 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
19 |
|
8 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 4 (worse than 96% 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 25 (worse than 75% of alternatives), show below-average growth (Growth Rank of 31), and are riskily financed (Safety Rank of 23), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 4, 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 25), low growth (Obermatt Growth Rank of 31), and risky financing practices (Obermatt Safety Rank of 23), 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
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 17 |
|
11 |
|
25 |
|
25 |
|
| GROWTH | ||||||||
| GROWTH | 61 |
|
75 |
|
31 |
|
31 |
|
| SAFETY | ||||||||
| SAFETY | 30 |
|
15 |
|
16 |
|
23 |
|
| COMBINED | ||||||||
| COMBINED | 30 |
|
8 |
|
1 |
|
4 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 25 (worse than 75% 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 69, which means that the stock price is lower as regards to invested capital than for 69% 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 25, 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 |
|
69 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
1 |
|
1 |
|
1 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 17 |
|
11 |
|
25 |
|
25 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% 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 75 which means that currently professionals expect the company to grow more than 75% of its competitors. Stock Returns are also above average with a rank of 71. But Capital Growth has only a rank of 10, which means that currently professionals expect the company to grow its invested capital less than 90% of its competitors. Profit Growth is also low, with a rank of only 6, 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 31, 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 71% 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 |
|
75 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 85 |
|
86 |
|
4 |
|
6 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
37 |
|
10 |
|
10 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 44 |
|
53 |
|
91 |
|
71 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 61 |
|
75 |
|
31 |
|
31 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 23 (better than 23% compared with alternatives), the company NEXTDC has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly 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 55, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 55% 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 17, meaning the company generates less profit to service its debt than 83% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 23 (worse than 77% compared with alternatives), NEXTDC has a financing structure that is significantly 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 |
|
55 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 35 |
|
10 |
|
26 |
|
17 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 30 |
|
15 |
|
16 |
|
23 |
|
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 |
|
Free stock analysis by the purely fact based Obermatt Method for NEXTDC from November 14, 2024.
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