Fact based stock research
NEXTDC (ASX:NXT)
AU000000NXT8
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.
NEXTDC stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 17 (worse than 83% 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 23 (worse than 77% of alternatives), and are riskily financed (Safety Rank of 18, which means above-average debt burdens) but show above-average growth (Growth Rank of 69). ...read more
RECOMMENDATION: A Combined Rank of 17, is a sell recommendation based on NEXTDC's financial characteristics. As the company NEXTDC shows low value with an Obermatt Value Rank of 23 (77% 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 69% of comparable companies (Obermatt Growth Rank is 69). 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 18 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 NEXTDC, even a low-value company (in terms of its key financial indicators) can be a good investment. 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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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 |
|
23 |
|
| GROWTH | ||||||||
| GROWTH | 61 |
|
75 |
|
31 |
|
69 |
|
| SAFETY | ||||||||
| SAFETY | 30 |
|
15 |
|
16 |
|
18 |
|
| 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 17 (worse than 83% 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 23 (worse than 77% of alternatives), and are riskily financed (Safety Rank of 18, which means above-average debt burdens) but show above-average growth (Growth Rank of 69). ...read more
RECOMMENDATION: A Combined Rank of 17, is a sell recommendation based on NEXTDC's financial characteristics. As the company NEXTDC shows low value with an Obermatt Value Rank of 23 (77% 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 69% of comparable companies (Obermatt Growth Rank is 69). 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 18 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 NEXTDC, even a low-value company (in terms of its key financial indicators) can be a good investment. 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 |
|
23 |
|
| GROWTH | ||||||||
| GROWTH | 61 |
|
75 |
|
31 |
|
69 |
|
| SAFETY | ||||||||
| SAFETY | 30 |
|
15 |
|
16 |
|
18 |
|
| COMBINED | ||||||||
| COMBINED | 30 |
|
8 |
|
1 |
|
17 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 23 (worse than 77% compared with alternatives), NEXTDC 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 NEXTDC. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 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. But Price-to-Sales is 3 which means that the stock price compared with what market professionals expect for future profits is higher than for 97% of comparable companies, indicating a low 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 48 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 23, is a sell recommendation based on NEXTDC'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 NEXTDC 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. 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) | 15 |
|
10 |
|
3 |
|
3 |
|
| 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 |
|
48 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
1 |
|
1 |
|
1 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 17 |
|
11 |
|
25 |
|
23 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 69 (better than 69% compared with alternatives), NEXTDC 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 all but one indicator above average for NEXTDC. Sales Growth has a rank of 55 which means that currently, professionals expect the company to grow more than 55% of its competitors. Capital Growth is also above 1% of competitors with a rank of 95, and Stock Returns with the rank of 84 is also an outperformance. Only Profit Growth is low with a rank of 1 which means that currently, professionals expect the company to grow its profits less than 99% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 69, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, NEXTDC is a good growth stock. 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. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 45 |
|
79 |
|
62 |
|
55 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 85 |
|
86 |
|
4 |
|
1 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
37 |
|
10 |
|
95 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 44 |
|
53 |
|
91 |
|
84 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 61 |
|
75 |
|
31 |
|
69 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 18 (better than 18% 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 all three metrics below average for NEXTDC. Liquidity is at 24, meaning that the company generates less profit to service its debt than 76% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 16, meaning the company has an above-average debt-to-equity ratio. It has more debt than 84% of its competitors. Finally, Refinancing is at a rank of 38 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 62% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 18 (worse than 82% compared with alternatives), NEXTDC has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of NEXTDC because it may suffer significantly in case of future difficulties. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 41 |
|
19 |
|
14 |
|
16 |
|
| REFINANCING | ||||||||
| REFINANCING | 41 |
|
62 |
|
48 |
|
38 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 35 |
|
10 |
|
26 |
|
24 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 30 |
|
15 |
|
16 |
|
18 |
|
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 |
|
Stock analysis by the purely fact based Obermatt Method for NEXTDC from April 25, 2024.
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