Fact based stock research
Novatek Microelectronics (TSEC:3034)

TW0003034005

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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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Novatek Microelectronics stock research in summary

novatek.com.tw

ANALYSIS: With an Obermatt Combined Rank of 99 (better than 99% compared with investment alternatives), Novatek Microelectronics (Semiconductors, Taiwan) shares have much better financial characteristics than comparable stocks. Shares of Novatek Microelectronics are a good value (attractively priced) with a consolidated Value Rank of 73 (better than 73% of alternatives), show above-average growth (Growth Rank of 51), and are safely financed (Safety Rank of 97), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 99, is a strong buy recommendation based on Novatek Microelectronics's financial characteristics. As the company Novatek Microelectronics's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 73), above-average growth (Obermatt Growth Rank of 51), and indicate that the company is safely financed (Obermatt Safety Rank of 97), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Novatek Microelectronics. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. 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	n/a
Growth Rank	n/a
Safety Rank	n/a
Combined Rank	n/a

Country	Taiwan
Industry	Semiconductors
Index	FTSE Taiwan
Size class	X-Large

This stock has achievements: Top 10 Stock.

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Research History: Novatek Microelectronics

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	85	69	69	n/a
GROWTH
GROWTH	93	45	65	n/a
SAFETY
SAFETY	95	95	97	n/a
SENTIMENT
SENTIMENT	n/a	65	76	^new
360° VIEW
360° VIEW	n/a	91	100	^new

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

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	85	69	69	n/a
GROWTH
GROWTH	93	45	65	n/a
SAFETY
SAFETY	95	95	97	n/a
COMBINED
COMBINED	100	89	100	n/a

Last update of combined financial performance: . Stock analysis on combined financial performance: The higher the rank of Novatek Microelectronics the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 73 (better than 73% compared with alternatives), Novatek Microelectronics shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Novatek Microelectronics. Price-to-Profit (also referred to as price-earnings, P/E) is 85 which means that the stock price compared with what market professionals expect for future profits is lower than for 85% of comparable companies, indicating a good value concerning Novatek Microelectronics'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 26, which means that the stock price is lower as regards to invested capital than for 26% of comparable investments. On the other hand, Price-to-Sales is less favorable than 52% of alternatives (only 48% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 5% 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 73, is a buy recommendation based on Novatek Microelectronics'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 in respect to expected revenues, it means that 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 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 pay it out to shareholders, 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)	64	54	45	n/a
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	96	84	78	n/a
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	41	25	22	n/a
DIVIDEND YIELD
DIVIDEND YIELD	96	93	100	n/a
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	85	69	69	n/a

Last update of Value Rank: . Stock analysis on value ratios: The higher the rank, the lower the value ratio of Novatek Microelectronics; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 51 (better than 51% compared with alternatives), Novatek Microelectronics 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 Novatek Microelectronics. Profit Growth has a rank of 62, which means that currently professionals expect the company to grow its profits more than 62% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 63 (above 63% of alternative investments). But Sales Growth has a below the median rank of 26, which means that, currently, professionals expect the company to grow less than 74% of its competitors, and Capital Growth also has a lower rank of 30. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 51, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Novatek Microelectronics. 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	85	19	26	n/a
PROFIT GROWTH
PROFIT GROWTH	25	86	64	n/a
CAPITAL GROWTH
CAPITAL GROWTH	n/a	27	46	n/a
STOCK RETURNS
STOCK RETURNS	69	63	77	n/a
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	93	45	65	n/a

Last update of Growth Rank: . Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Novatek Microelectronics.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 97 (better than 97% compared with alternatives) for 2025, the company Novatek Microelectronics has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Novatek Microelectronics 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 Novatek Microelectronics. Leverage is at a rank of 94, meaning the company has a below-average debt-to-equity ratio. It has less debt than 94% of its competitors. Liquidity is also good at a rank of 99, meaning the company generates more profit to service its debt than 99% 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 47, 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 53% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 97 (better than 97% compared with alternatives), Novatek Microelectronics 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 Novatek Microelectronics. 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 Novatek Microelectronics 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	86	92	94	n/a
REFINANCING
REFINANCING	49	47	47	n/a
LIQUIDITY
LIQUIDITY	100	97	99	n/a
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	95	95	97	n/a

Last update of Safety Rank: . Stock analysis on safety metrics: The higher the rank, the lower the leverage of Novatek Microelectronics 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	46	40	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	95	53	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	33	77	^new
MARKET PULSE
MARKET PULSE	n/a	56	73	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	65	76	^new

Last update of Sentiment Rank: . Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Novatek Microelectronics.
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