Fact based stock research
Servcorp (ASX:SRV)

AU000000SRV5

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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.

Servcorp stock research in summary

servcorp.com.au

ANALYSIS: With an Obermatt Combined Rank of 12 (worse than 88% compared with investment alternatives), Servcorp (Real Estate: Operating Services, Australia) shares have lower financial characteristics compared with similar stocks. Shares of Servcorp are a good value (attractively priced) with a consolidated Value Rank of 81 (better than 81% of alternatives) but show below-average growth (Growth Rank of 27), and are riskily financed (Safety Rank of 8), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 12, is a sell recommendation based on Servcorp's financial characteristics. As the company Servcorp's key financial metrics exhibit good value (Obermatt Value Rank of 81) but low growth (Obermatt Growth Rank of 27) and risky financing practices (Obermatt Safety Rank of 8), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 81% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. 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	81
Growth Rank	27
Safety Rank	8
Combined Rank	12

Country	Australia
Industry	Real Estate: Operating Services
Index
Size class	Small

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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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.

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

Research History: Servcorp

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	100	87	90	81
GROWTH
GROWTH	15	47	13	27
SAFETY
SAFETY	2	6	6	8
SENTIMENT
SENTIMENT	n/a	20	37	^new
360° VIEW
360° VIEW	n/a	30	8	^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 Servcorp is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	100	87	90	81
GROWTH
GROWTH	15	47	13	27
SAFETY
SAFETY	2	6	6	8
COMBINED
COMBINED	32	42	12	12

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 81 (better than 81% compared with alternatives) for 2024, Servcorp shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Servcorp. Price-to-Sales (P/S) is 71, which means that the stock price compared with what market professionals expect for future sales is lower than for 71% of comparable companies, indicating a good value concerning Servcorp's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 91% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 98 (dividends are expected to be higher than 98% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 56% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Servcorp to 44. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 81, is a buy recommendation based on Servcorp's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	87	82	77	71
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	87	84	93	91
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	84	74	69	44
DIVIDEND YIELD
DIVIDEND YIELD	96	99	98	98
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	100	87	90	81

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 27 (better than 27% compared with alternatives), Servcorp 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 three out of four indicators below average for Servcorp. Sales Growth has a below market rank of 25, which means that, currently, professionals expect the company to grow less than 75% of its competitors. The same is valid for Capital Growth, with a rank of 30, and Profit Growth, with a rank of 19. Currently, professionals expect the company to grow its profits less than 81% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 87, which means that the stock returns have recently been above 87% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 27, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Servcorp, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. 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	5	4	12	25
PROFIT GROWTH
PROFIT GROWTH	34	95	43	19
CAPITAL GROWTH
CAPITAL GROWTH	n/a	1	13	30
STOCK RETURNS
STOCK RETURNS	58	85	57	87
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	15	47	13	27

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 8 (better than 8% compared with alternatives), the company Servcorp has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Servcorp 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 all three metrics below average for Servcorp. Liquidity is at 33, meaning that the company generates less profit to service its debt than 67% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 4, meaning the company has an above-average debt-to-equity ratio. It has more debt than 96% of its competitors. Finally, Refinancing is at a rank of 11 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 89% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 8 (worse than 92% compared with alternatives), Servcorp has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of Servcorp because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	8	9	5	4
REFINANCING
REFINANCING	10	7	11	11
LIQUIDITY
LIQUIDITY	52	17	26	33
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	2	6	6	8

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Servcorp 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	19	80	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	40	57	^new
MARKET PULSE
MARKET PULSE	n/a	49	7	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	20	37	^new

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