Fact based stock research
Santos (ASX:STO)

AU000000STO6

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.

Santos stock research in summary

santos.com

ANALYSIS: With an Obermatt Combined Rank of 22 (worse than 78% compared with investment alternatives), Santos (Oil & Gas Production, Australia) shares have lower financial characteristics compared with similar stocks. Shares of Santos are low in value (priced high) with a consolidated Value Rank of 33 (worse than 67% of alternatives), show below-average growth (Growth Rank of 39), and are riskily financed (Safety Rank of 34), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 22, is a sell recommendation based on Santos's financial characteristics. As the company Santos's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 33), low growth (Obermatt Growth Rank of 39), and risky financing practices (Obermatt Safety Rank of 34), 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. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to 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	33
Growth Rank	39
Safety Rank	34
Combined Rank	22

Country	Australia
Industry	Oil & Gas Production
Index	ASX 100, ASX 200, ASX 300, ASX 50, Moonshot Tech
Size class	X-Large

This stock has achievements: Top 10 Stock.

26-Dec-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: Santos

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	24	40	24	33
GROWTH
GROWTH	45	81	41	39
SAFETY
SAFETY	80	51	39	34
SENTIMENT
SENTIMENT	n/a	83	78	^new
360° VIEW
360° VIEW	n/a	82	42	^new

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

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	24	40	24	33
GROWTH
GROWTH	45	81	41	39
SAFETY
SAFETY	80	51	39	34
COMBINED
COMBINED	17	66	17	22

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 33 (worse than 67% compared with alternatives), Santos 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 Santos. Expected dividend yields are higher than for 73% of comparable companies (a Dividend Yield rank of 73), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 64, which means that the stock price is lower compared with invested capital than for 64% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 16 which means that the stock price compared with what market professionals expect for future profits is higher than for 84% of comparable companies, indicating a low value concerning Santos's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Santos with a rank of 38. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 62% of comparable companies, indicating a low value concerning Santos's profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 33, is a hold recommendation based on Santos's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Santos may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. 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)	22	28	20	16
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	32	57	37	38
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	14	38	56	64
DIVIDEND YIELD
DIVIDEND YIELD	62	50	46	73
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	24	40	24	33

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 39 (better than 39% compared with alternatives), Santos 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 all four metrics below average for Santos. Sales Growth has a rank of 38, which means that currently professionals expect the company to grow less than 62% of its competitors. The same is valid for Profit Growth, with a rank of 39, and Capital Growth with 45. In addition, Stock Returns have a below market rank of 41, which means that the stock returns have recently been below 59% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 39, is a hold recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. 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 low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	54	83	11	38
PROFIT GROWTH
PROFIT GROWTH	94	77	29	39
CAPITAL GROWTH
CAPITAL GROWTH	n/a	90	71	45
STOCK RETURNS
STOCK RETURNS	46	27	53	41
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	45	81	41	39

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company Santos 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 Santos 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 Santos. Leverage is at a rank of 52, meaning the company has a below-average debt-to-equity ratio. It has less debt than 52% of its competitors. Liquidity is also good at a rank of 60, meaning the company generates more profit to service its debt than 60% 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 17, 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 83% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% compared with alternatives), Santos 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 Santos. 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 Santos 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	57	33	46	52
REFINANCING
REFINANCING	61	47	35	17
LIQUIDITY
LIQUIDITY	23	50	63	60
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	80	51	39	34

Last update of Safety Rank: 26-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Santos 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	46	80	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	58	15	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	85	68	^new
MARKET PULSE
MARKET PULSE	n/a	50	75	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	83	78	^new

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