Fact based stock research
Sleep Country Canada (TSX:ZZZ)

CA83125J1049

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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.

Sleep Country Canada stock research in summary

sleepcountryir.ca

ANALYSIS: With an Obermatt Combined Rank of 77 (better than 77% compared with investment alternatives), Sleep Country Canada (Homefurnishing Retail, Canada) shares have much better financial characteristics than comparable stocks. Shares of Sleep Country Canada are a good value (attractively priced) with a consolidated Value Rank of 77 (better than 77% of alternatives), show above-average growth (Growth Rank of 85) but are riskily financed (Safety Rank of 28), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 77, is a strong buy recommendation based on Sleep Country Canada's financial characteristics. As the company Sleep Country Canada's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 77) and above-average growth (Obermatt Growth Rank of 85), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 28) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. 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	77
Growth Rank	85
Safety Rank	28
Combined Rank	77

Country	Canada
Industry	Homefurnishing Retail
Index	TSX Composite
Size class	Medium

3-Oct-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: Sleep Country Canada

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	62	53	90	77
GROWTH
GROWTH	90	85	45	85
SAFETY
SAFETY	5	25	30	28
SENTIMENT
SENTIMENT	n/a	55	76	^new
360° VIEW
360° VIEW	n/a	61	72	^new

Most recent update of the stock research: 3-Oct-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 Sleep Country Canada is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	62	53	90	77
GROWTH
GROWTH	90	85	45	85
SAFETY
SAFETY	5	25	30	28
COMBINED
COMBINED	54	60	59	77

Last update of combined financial performance: 3-Oct-2024. Stock analysis on combined financial performance: The higher the rank of Sleep Country Canada the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 77 (better than 77% compared with alternatives) for 2024, Sleep Country Canada shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Sleep Country Canada. Price-to-Profit (also referred to as price-earnings, P/E) is 61 which means that the stock price compared with what market professionals expect for future profits is lower than for 61% of comparable companies, indicating a good value concerning Sleep Country Canada'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 32, which means that the stock price is lower as regards to invested capital than for 32% of comparable investments. On the other hand, Price-to-Sales is less favorable than 64% of alternatives (only 36% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 6% 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 77, is a buy recommendation based on Sleep Country Canada'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)	36	22	33	36
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	61	31	80	61
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	37	48	54	32
DIVIDEND YIELD
DIVIDEND YIELD	80	88	94	94
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	62	53	90	77

Last update of Value Rank: 3-Oct-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Sleep Country Canada; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 85 (better than 85% compared with alternatives) for 2024, Sleep Country Canada 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 Sleep Country Canada. Sales Growth has a rank of 57 which means that currently, professionals expect the company to grow more than 57% of its competitors. Capital Growth is also above 43% of competitors with a rank of 92, and Stock Returns with the rank of 83 is also an outperformance. Only Profit Growth is low with a rank of 43 which means that currently, professionals expect the company to grow its profits less than 57% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 85, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Sleep Country Canada is a good growth stock. 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	62	75	65	57
PROFIT GROWTH
PROFIT GROWTH	79	23	38	43
CAPITAL GROWTH
CAPITAL GROWTH	n/a	100	22	92
STOCK RETURNS
STOCK RETURNS	90	71	65	83
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	90	85	45	85

Last update of Growth Rank: 3-Oct-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Sleep Country Canada.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 28 (better than 28% compared with alternatives), the company Sleep Country Canada 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 Sleep Country Canada 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 just one indicator above average for Sleep Country Canada. Liquidity is at 55, meaning the company generates more profit to service its debt than 55% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 16, 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 84% of its competitors. Leverage is also high at a rank of 43, which means that the company has an above-average debt-to-equity ratio. It has more debt than 57% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 28 (worse than 72% compared with alternatives), Sleep Country Canada has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	24	36	39	43
REFINANCING
REFINANCING	22	6	16	16
LIQUIDITY
LIQUIDITY	55	50	51	55
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	5	25	30	28

Last update of Safety Rank: 3-Oct-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Sleep Country Canada 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	28	60	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	26	25	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	45	92	^new
MARKET PULSE
MARKET PULSE	n/a	98	81	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	55	76	^new

Last update of Sentiment Rank: 3-Oct-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Sleep Country Canada.
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