August 1, 2024
Top 10 Stock Prosus Strong Buy Recommendation
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.
Snapshot: Prosus – Top 10 Stock in AEX Index
Prosus is listed as a top 10 stock on August 01, 2024 in the market index AEX because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 96 (top 96% performer), Obermatt assesses an overall strong buy recommendation for Prosus on August 01, 2024.
Snapshot: Obermatt Ranks
| Country | Netherlands |
| Industry | Internet Retail |
| Index | AEX, EURO STOXX 50, Employee Focus EU |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Prosus Strong Buy
| 360 METRICS | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 39 |
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| GROWTH | ||||||||
| GROWTH | 88 |
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| SAFETY | ||||||||
| SAFETY | 72 |
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| SENTIMENT | ||||||||
| SENTIMENT | 90 |
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| 360° VIEW | ||||||||
| 360° VIEW | 96 |
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ANALYSIS: With an Obermatt 360° View of 96 (better than 96% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Prosus are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Prosus. The consolidated Growth Rank has a good rank of 88, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. This means that growth is higher than for 88% of competitors in the same industry. The consolidated Safety Rank at 72 means that the company has a financing structure that is safer than 72% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 90, which means that professional investors are more optimistic about the stock than for 90% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 39, meaning that the share price of Prosus is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 61% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 96, Prosus is better positioned than 96% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 88), a safe financing structure (Safety Rank of 72), and positive professional market sentiment (Sentiment Rank of 90), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Prosus compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (88% better than peers). The value rank could be the reverse reflection of that (12%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Prosus very positive
ANALYSIS: With an Obermatt Sentiment Rank of 90 (better than 90% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Prosus is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Prosus. Analyst Opinions are at a rank of 84 (better than 84% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 61, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Prosus. The Professional Investors rank is 67, which means that currently, professional investors hold more stock in this company than in 67% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 57 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 57% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 90 (more positive than 90% compared with investment alternatives), Prosus has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Prosus stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Prosus Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 39 (worse than 61% compared with alternatives), Prosus 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 Prosus. Price-to-Profit (also referred to as price-earnings, P/E) is 52 which means that the stock price compared with what market professionals expect for future profits is lower than for 52% of comparable companies, indicating a good value concerning Prosus'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, which means that the stock price is lower as regards to invested capital than for 48% of comparable investments. On the other hand, Price-to-Sales is less favorable than 99% of alternatives (only 1% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 37% 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 39, is a hold recommendation based on Prosus'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. ...read more
Growth Strategy: Prosus Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 88 (better than 88% compared with alternatives) for 2024, Prosus 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 all four indicators above average for Prosus. Sales Growth has a value of 91, which means that, currently, professionals expect the company to grow more than 91% of its competitors. The same is valid for Profit Growth with a value of 64 and for Capital Growth with 81. In addition, Stock Returns had an above-average rank value of 65, which means they have been higher than 65% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 88, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Prosus exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Prosus Debt Financing Safety above-average
| SAFETY METRICS | August 1, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 85 |
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| REFINANCING | ||||||||
| REFINANCING | 46 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 37 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 72 |
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ANALYSIS: With an Obermatt Safety Rank of 72 (better than 72% compared with alternatives), the company Prosus 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 Prosus 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 just one indicator above average for Prosus and the other two below average. Leverage is at a rank of 85 meaning the company has a below-average debt-to-equity ratio. It has less debt than 85% of its competitors.Refinancing is at a rank of 46, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 54% of its competitors. Liquidity is at a rank of 37, meaning that the company generates less profit to service its debt than 63% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 72 (better than 72% compared with alternatives), Prosus has a financing structure that is safer than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Prosus are on the safer side. ...read more
Combined financial peformance: Prosus Top Financial Performance
| COMBINED PERFORMANCE | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 39 |
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| GROWTH | ||||||||
| GROWTH | 88 |
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| SAFETY | ||||||||
| SAFETY | 37 |
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| COMBINED | ||||||||
| COMBINED | 90 |
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ANALYSIS: With an Obermatt Combined Rank of 90 (better than 90% compared with investment alternatives), Prosus (Internet Retail, Netherlands) shares have much better financial characteristics than comparable stocks. Shares of Prosus are low in value (priced high) with a consolidated Value Rank of 39 (worse than 61% of alternatives). But they show above-average growth (Growth Rank of 88) and are safely financed (Safety Rank of 72, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 90, is a strong buy recommendation based on Prosus's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Prosus exhibits low value (Obermatt Value Rank of 39), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 88). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 72) 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). ...read more
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