Fact based stock research
SABESP (BOVESPA:SBSP3)

BRSBSPACNOR5

How to read the free 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.

SABESP stock research in summary

sabesp.com.br

ANALYSIS: With an Obermatt Combined Rank of 78 (better than 78% compared with investment alternatives), SABESP (Water Utilities, Brazil) shares have much better financial characteristics than comparable 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 98) and are safely financed (Safety Rank of 66, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 78, is a strong 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 98). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 66) 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	28
Growth Rank	98
Safety Rank	66
Combined Rank	78

Country	Brazil
Industry	Water Utilities
Index	BOVESPA, SDG 6, Water Tech
Size class	X-Large

This stock has achievements: Top 10 Stock.

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

Further information

Multiple opinions. One number.

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.

Why popular stocks have low ratings

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	98
SAFETY
SAFETY	24	59	41	66
SENTIMENT
SENTIMENT	n/a	70	92	^new
360° VIEW
360° VIEW	n/a	90	74	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better SABESP is in the corresponding investment strategy.
Upgrade to a Premium Account to access the latest ranks.

Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	62	72	53	28
GROWTH
GROWTH	10	67	61	98
SAFETY
SAFETY	24	59	41	66
COMBINED
COMBINED	16	82	49	78

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of SABESP the better the performance.

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 59, which means that the stock price compared with what market professionals expect for future profits is lower than for 59% of comparable companies, indicating a good value concerning SABESP's profit levels. But Price-to-Sales is 27 which means that the stock price compared with what market professionals expect for future profits is higher than for 73% 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 45 and for dividend yield, which is lower than for 77% 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	27
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	55	91	64	59
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	76	85	57	45
DIVIDEND YIELD
DIVIDEND YIELD	31	35	40	23
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	62	72	53	28

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of SABESP; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 98 (better than 98% 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 four indicators above average for SABESP. Sales Growth has a value of 94, which means that, currently, professionals expect the company to grow more than 94% of its competitors. The same is valid for Profit Growth with a value of 70 and for Capital Growth with 88. In addition, Stock Returns had an above-average rank value of 82, which means they have been higher than 82% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 98, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, SABESP 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. 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	94
PROFIT GROWTH
PROFIT GROWTH	89	84	36	70
CAPITAL GROWTH
CAPITAL GROWTH	n/a	80	59	88
STOCK RETURNS
STOCK RETURNS	22	27	55	82
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	10	67	61	98

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of SABESP.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 66 (better than 66% 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 42, 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 58% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 66 (better than 66% 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	42
LIQUIDITY
LIQUIDITY	44	79	57	64
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	24	59	41	66

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of SABESP 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	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

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for SABESP.
Upgrade to a Premium Account to access the latest ranks.