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Raia Drogasil (BOVESPA:RADL3)

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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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Raia Drogasil stock research in summary

rd.com.br

ANALYSIS: With an Obermatt Combined Rank of 28 (worse than 72% compared with investment alternatives), Raia Drogasil (Drug Retail, Brazil) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Raia Drogasil are low in value (priced high) with a consolidated Value Rank of 15 (worse than 85% of alternatives). But they show above-average growth (Growth Rank of 53) and are safely financed (Safety Rank of 54, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 28, is a hold recommendation based on Raia Drogasil's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Raia Drogasil exhibits low value (Obermatt Value Rank of 15), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 53). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 54) 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	15
Growth Rank	53
Safety Rank	54
Combined Rank	28

Country	Brazil
Industry	Drug Retail
Index	BOVESPA, Independent Boards Growth Markets, Renewables Users
Size class	X-Large

26-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Research History: Raia Drogasil

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	1	11	7	15
GROWTH
GROWTH	61	83	97	53
SAFETY
SAFETY	48	48	50	54
SENTIMENT
SENTIMENT	n/a	85	77	^new
360° VIEW
360° VIEW	n/a	71	60	^new

Most recent update of the stock research: 26-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 Raia Drogasil is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	1	11	7	15
GROWTH
GROWTH	61	83	97	53
SAFETY
SAFETY	48	48	50	54
COMBINED
COMBINED	10	39	50	28

Last update of combined financial performance: 26-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Raia Drogasil the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 15 (worse than 85% compared with alternatives), Raia Drogasil 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 Raia Drogasil. Price-to-Sales is 46 which means that the stock price compared with what market professionals expect for future profits is higher than 54% of comparable companies, indicating a low value concerning Raia Drogasil's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 17, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Raia Drogasil. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 23 and Dividend Yield, which is lower than 82% 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 15, is a sell recommendation based on Raia Drogasil's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Raia Drogasil? 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 Raia Drogasil? 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. Raia Drogasil 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)	23	36	25	46
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	14	32	15	23
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	6	20	11	17
DIVIDEND YIELD
DIVIDEND YIELD	1	15	15	18
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	1	11	7	15

Last update of Value Rank: 26-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Raia Drogasil; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 53 (better than 53% compared with alternatives), Raia Drogasil 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 Raia Drogasil. 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 28% of competitors with a rank of 78. But Profit Growth only has a rank of 28, which means that currently professionals expect the company to grow its profits less than 72% of its competitors. And Stock Returns have also been below average with a rank of only 23. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 53, 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	62	75	90	94
PROFIT GROWTH
PROFIT GROWTH	43	78	71	28
CAPITAL GROWTH
CAPITAL GROWTH	n/a	69	65	78
STOCK RETURNS
STOCK RETURNS	38	19	81	23
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	61	83	97	53

Last update of Growth Rank: 26-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Raia Drogasil.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 54 (better than 54% compared with alternatives), the company Raia Drogasil 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 Raia Drogasil 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 Raia Drogasil and the other two below average. Refinancing is at 61, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 61% of its competitors. But Leverage is high with a rank of 39, meaning the company has an above-average debt-to-equity ratio. It has more debt than 61% of its competitors. Liquidity is also on the riskier side with a rank of 45, meaning the company generates less profit to service its debt than 55% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 54 (better than 54% compared with alternatives), Raia Drogasil has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Raia Drogasil are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Raia Drogasil 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	64	38	40	39
REFINANCING
REFINANCING	48	53	57	61
LIQUIDITY
LIQUIDITY	39	60	43	45
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	48	48	50	54

Last update of Safety Rank: 26-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Raia Drogasil 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	26	45	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	64	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	93	73	^new
MARKET PULSE
MARKET PULSE	n/a	68	84	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	85	77	^new

Last update of Sentiment Rank: 26-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Raia Drogasil.
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