Fact based stock research
Nick Scali (ASX:NCK)

AU000000NCK1

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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.

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Nick Scali stock research in summary

nickscali.com.au

ANALYSIS: With an Obermatt Combined Rank of 28 (worse than 72% compared with investment alternatives), Nick Scali (Homefurnishing Retail, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Nick Scali are low in value (priced high) with a consolidated Value Rank of 29 (worse than 71% of alternatives), and are riskily financed (Safety Rank of 37, which means above-average debt burdens) but show above-average growth (Growth Rank of 55). ...read more

RECOMMENDATION: A Combined Rank of 28, is a hold recommendation based on Nick Scali's financial characteristics. As the company Nick Scali shows low value with an Obermatt Value Rank of 29 (71% 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 55% of comparable companies (Obermatt Growth Rank is 55). 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 37 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 Nick Scali, 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

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	29
Growth Rank	55
Safety Rank	37
Combined Rank	28

Country	Australia
Industry	Homefurnishing Retail
Index	ASX 300
Size class	Medium

14-Nov-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: Nick Scali

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	49	31	37	29
GROWTH
GROWTH	100	83	19	55
SAFETY
SAFETY	57	28	28	37
SENTIMENT
SENTIMENT	n/a	28	63	^new
360° VIEW
360° VIEW	n/a	25	14	^new

Most recent update of the stock research: 14-Nov-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 Nick Scali is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	49	31	37	29
GROWTH
GROWTH	100	83	19	55
SAFETY
SAFETY	57	28	28	37
COMBINED
COMBINED	84	43	1	28

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Nick Scali the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 29 (worse than 71% compared with alternatives), Nick Scali shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Nick Scali. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 84% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 11 which means that the stock price compared with what market professionals expect for future profits is higher than 89% of comparable companies, indicating a low value concerning Nick Scali's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 38 which means that the stock price compared with what market professionals expect for future profit levels is higher than 62% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 18 is also low. Compared with invested capital, the stock price is higher than for 82% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 29, is a hold recommendation based on Nick Scali's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Nick Scali? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Nick Scali only if they reasonably expect the low current profit levels to be transitory. 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)	19	15	15	11
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	72	52	61	38
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	6	13	18	18
DIVIDEND YIELD
DIVIDEND YIELD	82	94	86	84
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	49	31	37	29

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Nick Scali; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 55 (better than 55% compared with alternatives), Nick Scali 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 half of the indicators below and half above average for Nick Scali. Sales Growth has a rank of 88 which means that currently professionals expect the company to grow more than 88% of its competitors. Stock Returns are also above average with a rank of 71. But Capital Growth has only a rank of 41, which means that currently professionals expect the company to grow its invested capital less than 59% of its competitors. Profit Growth is also low, with a rank of only 10, 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 55, is a buy 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	76	80	54	88
PROFIT GROWTH
PROFIT GROWTH	94	26	10	10
CAPITAL GROWTH
CAPITAL GROWTH	n/a	68	14	41
STOCK RETURNS
STOCK RETURNS	88	97	73	71
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	100	83	19	55

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Nick Scali.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 37 (better than 37% compared with alternatives), the company Nick Scali 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 Nick Scali 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 Nick Scali. Liquidity is at 46, meaning that the company generates less profit to service its debt than 54% 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 27, meaning the company has an above-average debt-to-equity ratio. It has more debt than 73% of its competitors. Finally, Refinancing is at a rank of 34 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 66% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 37 (worse than 63% compared with alternatives), Nick Scali has a financing structure that is 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 Nick Scali because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	59	12	17	27
REFINANCING
REFINANCING	41	32	28	34
LIQUIDITY
LIQUIDITY	48	51	49	46
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	57	28	28	37

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Nick Scali 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	79	46	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	75	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	16	96	^new
MARKET PULSE
MARKET PULSE	n/a	31	11	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	28	63	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Nick Scali.
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