Fact based stock research
Treatt (LSE:TET)

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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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Treatt stock research in summary

treatt.com

ANALYSIS: With an Obermatt Combined Rank of 83 (better than 83% compared with investment alternatives), Treatt (Specialty Chemicals, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of Treatt are low in value (priced high) with a consolidated Value Rank of 22 (worse than 78% of alternatives). But they show above-average growth (Growth Rank of 67) and are safely financed (Safety Rank of 100, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 83, is a strong buy recommendation based on Treatt's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Treatt exhibits low value (Obermatt Value Rank of 22), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 67). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 100) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). 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	22
Growth Rank	67
Safety Rank	100
Combined Rank	83

Country	United Kingdom
Industry	Specialty Chemicals
Index	FTSE All Shares
Size class	Small

19-Dec-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: Treatt

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	26	5	21	22
GROWTH
GROWTH	66	29	79	67
SAFETY
SAFETY	76	86	84	100
SENTIMENT
SENTIMENT	n/a	71	86	^new
360° VIEW
360° VIEW	n/a	43	90	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 31-Mar-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Treatt is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	26	5	21	22
GROWTH
GROWTH	66	29	79	67
SAFETY
SAFETY	76	86	84	100
COMBINED
COMBINED	75	28	74	83

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Treatt the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 22 (worse than 78% compared with alternatives), Treatt shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Treatt. Price-to-Sales is 19 which means that the stock price compared with what market professionals expect for future profits is higher than 81% of comparable companies, indicating a low value concerning Treatt's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 39, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Treatt. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 31 and Dividend Yield, which is lower than 67% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 22, is a sell recommendation based on Treatt's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Treatt? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Treatt? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Treatt may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. 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)	23	13	23	19
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	48	5	29	31
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	10	12	36	39
DIVIDEND YIELD
DIVIDEND YIELD	52	32	34	33
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	26	5	21	22

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Treatt; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 67 (better than 67% compared with alternatives), Treatt shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Treatt. Sales Growth has a rank of 80 which means that currently professionals expect the company to grow more than 80% of its competitors. Stock Returns are also above average with a rank of 80. But Capital Growth has only a rank of 35, which means that currently professionals expect the company to grow its invested capital less than 65% of its competitors. Profit Growth is also low, with a rank of only 48, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 67, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 80% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. 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	43	47	75	80
PROFIT GROWTH
PROFIT GROWTH	70	23	83	48
CAPITAL GROWTH
CAPITAL GROWTH	n/a	24	58	35
STOCK RETURNS
STOCK RETURNS	64	89	33	80
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	66	29	79	67

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Treatt.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 100 (better than 100% compared with alternatives) for 2024, the company Treatt has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Treatt 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, where all three are above average for Treatt. Leverage is at 97, meaning the company has a below-average debt-to-equity ratio. It has less debt than 97% of its competitors. Refinancing is at a rank of 52, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 52% of its competitors. Finally, Liquidity is also good at a rank of 100, which means that the company generates more profit to service its debt than 100% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 100 (better than 100% compared with alternatives), Treatt has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. Investors may not have a debt issue with Treatt but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	44	91	95	97
REFINANCING
REFINANCING	62	30	46	52
LIQUIDITY
LIQUIDITY	59	94	68	100
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	76	86	84	100

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Treatt 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	85	89	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	31	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	13	48	^new
MARKET PULSE
MARKET PULSE	n/a	68	81	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	71	86	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Treatt.
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