Fact based stock research
Nitori (TSE:9843)

JP3756100008

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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.

(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.

Nitori stock research in summary

nitorihd.co.jp

ANALYSIS: With an Obermatt Combined Rank of 16 (worse than 84% compared with investment alternatives), Nitori (Homefurnishing Retail, Japan) shares have lower financial characteristics compared with similar stocks. Shares of Nitori are low in value (priced high) with a consolidated Value Rank of 9 (worse than 91% of alternatives) and show below-average growth (Growth Rank of 23) but are safely financed (Safety Rank of 82), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 16, is a sell recommendation based on Nitori's financial characteristics. As the company Nitori's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 9) and low growth (Obermatt Growth 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. In this case, good financing practices (Obermatt Safety Rank of 82) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for 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	9
Growth Rank	23
Safety Rank	82
Combined Rank	16

Country	Japan
Industry	Homefurnishing Retail
Index	TOPIX 100
Size class	X-Large

19-Dec-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: Nitori

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	35	15	5	9
GROWTH
GROWTH	45	37	53	23
SAFETY
SAFETY	91	82	77	82
SENTIMENT
SENTIMENT	n/a	96	31	^new
360° VIEW
360° VIEW	n/a	69	20	^new

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

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	35	15	5	9
GROWTH
GROWTH	45	37	53	23
SAFETY
SAFETY	91	82	77	82
COMBINED
COMBINED	58	25	29	16

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 9 (worse than 91% compared with alternatives), Nitori shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Nitori. Price-to-Sales is 16 which means that the stock price compared with what market professionals expect for future profits is higher than 84% of comparable companies, indicating a low value concerning Nitori's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 45, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Nitori. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 16 and Dividend Yield, which is lower than 86% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 9, is a sell recommendation based on Nitori's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Nitori? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Nitori? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Nitori may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. 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)	13	21	11	16
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	39	33	21	16
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	44	40	41	45
DIVIDEND YIELD
DIVIDEND YIELD	38	14	14	14
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	35	15	5	9

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 23 (better than 23% compared with alternatives), Nitori shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for Nitori. While Sales Growth ranks at 51, professionals currently expect the company to grow more than 51% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 41, which means that, currently, professionals expect the company to grow its profits less than 59% of its competitors, and Capital Growth has a low rank of 14. Historic stock returns were also below average with a current Stock Returns rank of 45 which means that the stock returns have recently been below 55% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 23, is a sell recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. 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 isn't stellar here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	39	51	50	51
PROFIT GROWTH
PROFIT GROWTH	67	46	32	41
CAPITAL GROWTH
CAPITAL GROWTH	n/a	52	64	14
STOCK RETURNS
STOCK RETURNS	32	17	47	45
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	45	37	53	23

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 82 (better than 82% compared with alternatives) for 2024, the company Nitori has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Nitori 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, with two out of three indicators above average for Nitori. Leverage is at a rank of 83, meaning the company has a below-average debt-to-equity ratio. It has less debt than 83% of its competitors. Liquidity is also good at a rank of 86, meaning the company generates more profit to service its debt than 86% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 38, which means that the portion of the debt that is 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 82 (better than 82% compared with alternatives), Nitori has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Nitori. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Nitori 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	82	84	75	83
REFINANCING
REFINANCING	36	48	36	38
LIQUIDITY
LIQUIDITY	100	90	88	86
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	91	82	77	82

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Nitori 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	50	36	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	100	17	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	92	70	^new
MARKET PULSE
MARKET PULSE	n/a	51	49	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	96	31	^new

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