Fact based stock research
Petro Rio (BOVESPA:PRIO3)

BRPRIOACNOR1

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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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Petro Rio stock research in summary

prio3.com.bren

ANALYSIS: With an Obermatt Combined Rank of 74 (better than 74% compared with investment alternatives), Petro Rio (Oil & Gas Production, Brazil) shares have above-average financial characteristics compared with similar stocks. Shares of Petro Rio are low in value (priced high) with a consolidated Value Rank of 35 (worse than 65% of alternatives). But they show above-average growth (Growth Rank of 83) and are safely financed (Safety Rank of 64, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 74, is a buy recommendation based on Petro Rio's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Petro Rio exhibits low value (Obermatt Value Rank of 35), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 83). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 64) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). 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	35
Growth Rank	83
Safety Rank	64
Combined Rank	74

Country	Brazil
Industry	Oil & Gas Production
Index	BOVESPA
Size class	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: Petro Rio

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	1	24	20	35
GROWTH
GROWTH	97	95	99	83
SAFETY
SAFETY	97	53	23	64
SENTIMENT
SENTIMENT	n/a	26	32	^new
360° VIEW
360° VIEW	n/a	57	37	^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 Petro Rio is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	1	24	20	35
GROWTH
GROWTH	97	95	99	83
SAFETY
SAFETY	97	53	23	64
COMBINED
COMBINED	79	72	41	74

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 35 (worse than 65% compared with alternatives), Petro Rio 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 Petro Rio. Price-to-Profit (also referred to as price-earnings, P/E) is 88 which means that the stock price compared with what market professionals expect for future profits is lower than for 88% of comparable companies, indicating a good value concerning Petro Rio'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 44, which means that the stock price is lower as regards to invested capital than for 44% of comparable investments. On the other hand, Price-to-Sales is less favorable than 77% of alternatives (only 23% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 43% 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 35, is a hold recommendation based on Petro Rio'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)	6	7	21	23
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	31	55	89	88
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	4	60	15	44
DIVIDEND YIELD
DIVIDEND YIELD	1	37	1	57
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	1	24	20	35

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 83 (better than 83% compared with alternatives) for 2024, Petro Rio shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Petro Rio. Sales Growth has a rank of 94 which means that currently, professionals expect the company to grow more than 94% of its competitors. Capital Growth is also above 44% of competitors with a rank of 91. But Profit Growth only has a rank of 44, which means that currently professionals expect the company to grow its profits less than 56% of its competitors. And Stock Returns have also been below average with a rank of only 25. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 83, is a buy recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. 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	94	86	89	94
PROFIT GROWTH
PROFIT GROWTH	n/a	70	86	44
CAPITAL GROWTH
CAPITAL GROWTH	n/a	98	81	91
STOCK RETURNS
STOCK RETURNS	78	79	67	25
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	97	95	99	83

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 64 (better than 64% compared with alternatives), the company Petro Rio has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Petro Rio 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 Petro Rio. Refinancing is at 67, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 67% of its competitors. Liquidity is also good at 63, meaning the company generates more profit to service its debt than 63% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 38, which means the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 64 (better than 64% compared with alternatives), Petro Rio has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Petro Rio could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Petro Rio 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	32	22	38
REFINANCING
REFINANCING	71	57	27	67
LIQUIDITY
LIQUIDITY	97	53	55	63
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	97	53	23	64

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Petro Rio 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	77	51	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	10	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	6	57	^new
MARKET PULSE
MARKET PULSE	n/a	34	52	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	26	32	^new

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