Fact based stock research
Recruits (TSE:6098)

JP3970300004

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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.

Recruits stock research in summary

recruit-holdings.com

ANALYSIS: With an Obermatt Combined Rank of 24 (worse than 76% compared with investment alternatives), Recruits (HR- & Employment Services, Japan) shares have lower financial characteristics compared with similar stocks. Shares of Recruits are low in value (priced high) with a consolidated Value Rank of 10 (worse than 90% of alternatives), and are riskily financed (Safety Rank of 49, which means above-average debt burdens) but show above-average growth (Growth Rank of 75). ...read more

RECOMMENDATION: A Combined Rank of 24, is a sell recommendation based on Recruits's financial characteristics. As the company Recruits shows low value with an Obermatt Value Rank of 10 (90% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 75% of comparable companies (Obermatt Growth Rank is 75). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 49 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Recruits, even a low-value company (in terms of its key financial indicators) can be a good investment. 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	10
Growth Rank	75
Safety Rank	49
Combined Rank	24

Country	Japan
Industry	HR- & Employment Services
Index	TOPIX 100, Nikkei 225
Size class	XX-Large

This stock has achievements: Top 10 Stock.

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

Further information

Multiple opinions. One number.

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Why popular stocks have low ratings

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Recruits

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	17	33	24	10
GROWTH
GROWTH	94	93	29	75
SAFETY
SAFETY	52	40	58	49
SENTIMENT
SENTIMENT	n/a	87	55	^new
360° VIEW
360° VIEW	n/a	87	25	^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 Recruits is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	17	33	24	10
GROWTH
GROWTH	94	93	29	75
SAFETY
SAFETY	52	40	58	49
COMBINED
COMBINED	65	64	9	24

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 10 (worse than 90% compared with alternatives), Recruits 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 Recruits. Price-to-Sales is 23 which means that the stock price compared with what market professionals expect for future profits is higher than 77% of comparable companies, indicating a low value concerning Recruits's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 15, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Recruits. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 13 and Dividend Yield, which is lower than 74% 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 10, is a sell recommendation based on Recruits's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Recruits? 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 Recruits? 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. Recruits 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)	42	54	43	23
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	56	32	30	13
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	4	26	30	15
DIVIDEND YIELD
DIVIDEND YIELD	47	43	29	26
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	17	33	24	10

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 75 (better than 75% compared with alternatives) for 2024, Recruits 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 Recruits. Capital Growth has a rank of 64, which means that currently professionals expect the company to grow its invested capital more than 45% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 97 (above 97% of alternative investments). But Sales Growth has only a rank of 23, which means that, currently, professionals expect the company to grow less than 77% of its competitors, and Profit Growth is also low at a rank of 45. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 75, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Recruits, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. 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	25	10	23
PROFIT GROWTH
PROFIT GROWTH	n/a	91	55	45
CAPITAL GROWTH
CAPITAL GROWTH	n/a	60	7	64
STOCK RETURNS
STOCK RETURNS	83	87	87	97
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	94	93	29	75

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 49 (better than 49% compared with alternatives), the company Recruits has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Recruits is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, 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 Recruits. Leverage is at a rank of 56, meaning the company has a below-average debt-to-equity ratio. It has less debt than 56% of its competitors. Liquidity is also good at a rank of 76, meaning the company generates more profit to service its debt than 76% 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 26, 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 74% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 49 (worse than 51% compared with alternatives), Recruits has a financing structure that is riskier 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 Recruits. 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 Recruits 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	45	35	52	56
REFINANCING
REFINANCING	40	38	44	26
LIQUIDITY
LIQUIDITY	100	46	65	76
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	52	40	58	49

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Recruits 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	82	57	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	44	45	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	79	80	^new
MARKET PULSE
MARKET PULSE	n/a	48	31	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	87	55	^new

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