Fact based stock research
SABESP (BOVESPA:SBSP3)
BRSBSPACNOR5
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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.
SABESP stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 54 (better than 54% compared with investment alternatives), SABESP (Water Utilities, Brazil) shares have above-average financial characteristics compared with similar stocks. Shares of SABESP are low in value (priced high) with a consolidated Value Rank of 28 (worse than 72% of alternatives). But they show above-average growth (Growth Rank of 76) and are safely financed (Safety Rank of 52, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 54, is a buy recommendation based on SABESP's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company SABESP exhibits low value (Obermatt Value Rank of 28), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 76). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 52) 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
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360° Viewnew| Country | Brazil |
| Industry | Water Utilities |
| Index | BOVESPA, SDG 6, Water Tech |
| Size class | X-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.
Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.
It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.
Review the performance ranks of the individual metrics that form each investment strategy.
Research History: SABESP
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 62 |
|
72 |
|
53 |
|
28 |
|
| GROWTH | ||||||||
| GROWTH | 10 |
|
67 |
|
61 |
|
76 |
|
| SAFETY | ||||||||
| SAFETY | 24 |
|
59 |
|
41 |
|
52 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
70 |
|
92 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
90 |
|
74 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 54 (better than 54% compared with investment alternatives), SABESP (Water Utilities, Brazil) shares have above-average financial characteristics compared with similar stocks. Shares of SABESP are low in value (priced high) with a consolidated Value Rank of 28 (worse than 72% of alternatives). But they show above-average growth (Growth Rank of 76) and are safely financed (Safety Rank of 52, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 54, is a buy recommendation based on SABESP's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company SABESP exhibits low value (Obermatt Value Rank of 28), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 76). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 52) 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
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 62 |
|
72 |
|
53 |
|
28 |
|
| GROWTH | ||||||||
| GROWTH | 10 |
|
67 |
|
61 |
|
76 |
|
| SAFETY | ||||||||
| SAFETY | 24 |
|
59 |
|
41 |
|
52 |
|
| COMBINED | ||||||||
| COMBINED | 16 |
|
82 |
|
49 |
|
54 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 28 (worse than 72% compared with alternatives), SABESP shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for SABESP. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 58, which means that the stock price compared with what market professionals expect for future profits is lower than for 58% of comparable companies, indicating a good value concerning SABESP's profit levels. But Price-to-Sales is 29 which means that the stock price compared with what market professionals expect for future profits is higher than for 71% of comparable companies, indicating a low value concerning SABESP'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 47 and for dividend yield, which is lower than for 73% 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 28, is a hold recommendation based on SABESP's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then SABESP is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. 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) | 64 |
|
61 |
|
37 |
|
29 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 55 |
|
91 |
|
64 |
|
58 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 76 |
|
85 |
|
57 |
|
47 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 31 |
|
35 |
|
40 |
|
27 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 62 |
|
72 |
|
53 |
|
28 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 76 (better than 76% compared with alternatives) for 2024, SABESP 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 but one indicator above average for SABESP. Profit Growth has a rank of 92 which means that currently professionals expect the company to grow its profits more than 92% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 95, and Stock Returns has a rank of 74 which means that the stock returns have recently been above 74% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 1 (99% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 76, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth 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. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 27 |
|
40 |
|
60 |
|
1 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 89 |
|
84 |
|
36 |
|
92 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
80 |
|
59 |
|
95 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 22 |
|
27 |
|
55 |
|
74 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 10 |
|
67 |
|
61 |
|
76 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 52 (better than 52% compared with alternatives), the company SABESP 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 SABESP 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 SABESP. Leverage is at a rank of 63, meaning the company has a below-average debt-to-equity ratio. It has less debt than 63% of its competitors. Liquidity is also good at a rank of 64, meaning the company generates more profit to service its debt than 64% 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 28, 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 72% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 52 (better than 52% compared with alternatives), SABESP has a financing structure that is 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 SABESP. 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 SABESP 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 | 35 |
|
56 |
|
60 |
|
63 |
|
| REFINANCING | ||||||||
| REFINANCING | 40 |
|
33 |
|
27 |
|
28 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 44 |
|
79 |
|
57 |
|
64 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 24 |
|
59 |
|
41 |
|
52 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
3 |
|
74 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
63 |
|
79 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
94 |
|
90 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
65 |
|
36 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
70 |
|
92 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for SABESP from December 19, 2024.
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