Fact based stock research
Spirent (LSE:SPT)

GB0004726096

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.

Spirent stock research in summary

spirent.com

ANALYSIS: With an Obermatt Combined Rank of 71 (better than 71% compared with investment alternatives), Spirent (Communications Equipment, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Spirent are low in value (priced high) with a consolidated Value Rank of 44 (worse than 56% of alternatives) and show below-average growth (Growth Rank of 44) but are safely financed (Safety Rank of 80), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 71, is a buy recommendation based on Spirent's financial characteristics. As the company Spirent's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 44) and low growth (Obermatt Growth Rank of 44), 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 80) 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	44
Growth Rank	44
Safety Rank	80
Combined Rank	71

Country	United Kingdom
Industry	Communications Equipment
Index	FTSE All Shares, FTSE 250, FTSE 350
Size class	Medium

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: Spirent

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	59	77	83	44
GROWTH
GROWTH	44	17	3	44
SAFETY
SAFETY	29	85	85	80
SENTIMENT
SENTIMENT	n/a	10	47	^new
360° VIEW
360° VIEW	n/a	41	63	^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 Spirent is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	59	77	83	44
GROWTH
GROWTH	44	17	3	44
SAFETY
SAFETY	29	85	85	80
COMBINED
COMBINED	29	73	70	71

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 44 (worse than 56% compared with alternatives), Spirent 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 Spirent. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 59% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 38 which means that the stock price compared with what market professionals expect for future profits is higher than 62% of comparable companies, indicating a low value concerning Spirent's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 28 which means that the stock price compared with what market professionals expect for future profit levels is higher than 72% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 31 is also low. Compared with invested capital, the stock price is higher than for 69% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 44, is a hold recommendation based on Spirent's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Spirent? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Spirent only if they reasonably expect the low current profit levels to be transitory. 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)	43	53	56	38
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	72	74	54	28
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	18	37	53	31
DIVIDEND YIELD
DIVIDEND YIELD	56	75	88	59
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	59	77	83	44

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 44 (better than 44% compared with alternatives), Spirent 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 Spirent. Capital Growth has a rank of 59, which means that currently professionals expect the company to grow its invested capital more than 8% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 94 (above 94% of alternative investments). But Sales Growth has only a rank of 34, which means that, currently, professionals expect the company to grow less than 66% of its competitors, and Profit Growth is also low at a rank of 8. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 44, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Spirent, investors may want to look at value and sentiment indicators for a well-rounded picture of this 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, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	39	17	10	34
PROFIT GROWTH
PROFIT GROWTH	45	19	10	8
CAPITAL GROWTH
CAPITAL GROWTH	n/a	84	28	59
STOCK RETURNS
STOCK RETURNS	52	23	9	94
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	44	17	3	44

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 80 (better than 80% compared with alternatives) for 2024, the company Spirent has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Spirent 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 Spirent. Leverage is at a rank of 77, meaning the company has a below-average debt-to-equity ratio. It has less debt than 77% of its competitors. Liquidity is also good at a rank of 89, meaning the company generates more profit to service its debt than 89% 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 34, 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 66% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 80 (better than 80% compared with alternatives), Spirent has a financing structure that is significantly 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 Spirent. 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 Spirent 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	60	76	78	77
REFINANCING
REFINANCING	14	41	51	34
LIQUIDITY
LIQUIDITY	84	89	91	89
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	29	85	85	80

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Spirent 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	36	84	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	34	62	^new
MARKET PULSE
MARKET PULSE	n/a	16	20	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	10	47	^new

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