Fact based stock research
Santen Pharmaceutical (TSE:4536)

JP3336000009

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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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Santen Pharmaceutical stock research in summary

santen.co.jpja

ANALYSIS: With an Obermatt Combined Rank of 54 (better than 54% compared with investment alternatives), Santen Pharmaceutical (Pharmaceuticals, Japan) shares have above-average financial characteristics compared with similar stocks. Shares of Santen Pharmaceutical are low in value (priced high) with a consolidated Value Rank of 40 (worse than 60% of alternatives) and show below-average growth (Growth Rank of 46) but are safely financed (Safety Rank of 63), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 54, is a buy recommendation based on Santen Pharmaceutical's financial characteristics. As the company Santen Pharmaceutical's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 40) and low growth (Obermatt Growth Rank of 46), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 63) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. 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	40
Growth Rank	46
Safety Rank	63
Combined Rank	54

Country	Japan
Industry	Pharmaceuticals
Index
Size class	Large

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

Further information

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

Research History: Santen Pharmaceutical

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	76	77	70	40
GROWTH
GROWTH	32	43	51	46
SAFETY
SAFETY	92	84	80	63
SENTIMENT
SENTIMENT	n/a	27	70	^new
360° VIEW
360° VIEW	n/a	71	94	^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 Santen Pharmaceutical is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	76	77	70	40
GROWTH
GROWTH	32	43	51	46
SAFETY
SAFETY	92	84	80	63
COMBINED
COMBINED	78	82	90	54

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 40 (worse than 60% compared with alternatives), Santen Pharmaceutical 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 Santen Pharmaceutical. Price-to-Profit (also referred to as price-earnings, P/E) is 63 which means that the stock price compared with what market professionals expect for future profits is lower than for 63% of comparable companies, indicating a good value concerning Santen Pharmaceutical'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 33, which means that the stock price is lower as regards to invested capital than for 33% of comparable investments. On the other hand, Price-to-Sales is less favorable than 54% of alternatives (only 46% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 39% 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 40, is a hold recommendation based on Santen Pharmaceutical'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. 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 especially important 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)	74	59	62	46
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	40	78	63	63
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	56	67	56	33
DIVIDEND YIELD
DIVIDEND YIELD	83	88	76	61
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	76	77	70	40

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 46 (better than 46% compared with alternatives), Santen Pharmaceutical shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Santen Pharmaceutical. Profit Growth has a rank of 58, which means that currently professionals expect the company to grow its profits more than 58% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 76 (above 76% of alternative investments). But Sales Growth has a below the median rank of 9, which means that, currently, professionals expect the company to grow less than 91% of its competitors, and Capital Growth also has a lower rank of 48. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 46, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Santen Pharmaceutical. 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	41	16	8	9
PROFIT GROWTH
PROFIT GROWTH	50	96	94	58
CAPITAL GROWTH
CAPITAL GROWTH	n/a	43	23	48
STOCK RETURNS
STOCK RETURNS	8	37	79	76
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	32	43	51	46

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 63 (better than 63% compared with alternatives), the company Santen Pharmaceutical 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 Santen Pharmaceutical 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 Santen Pharmaceutical. Leverage is at a rank of 59, meaning the company has a below-average debt-to-equity ratio. It has less debt than 59% of its competitors. Liquidity is also good at a rank of 70, meaning the company generates more profit to service its debt than 70% 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 48, 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 52% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 63 (better than 63% compared with alternatives), Santen Pharmaceutical 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 Santen Pharmaceutical. 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 Santen Pharmaceutical 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	67	74	63	59
REFINANCING
REFINANCING	60	61	63	48
LIQUIDITY
LIQUIDITY	100	84	76	70
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	92	84	80	63

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Santen Pharmaceutical 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	31	39	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	82	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	37	100	^new
MARKET PULSE
MARKET PULSE	n/a	47	26	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	27	70	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Santen Pharmaceutical.
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