Fact based stock research
Yakult Honsha (TSE:2267)

JP3931600005

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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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Yakult Honsha stock research in summary

yakult.co.jp

ANALYSIS: With an Obermatt Combined Rank of 13 (worse than 87% compared with investment alternatives), Yakult Honsha (Packaged Foods & Meats, Japan) shares have lower financial characteristics compared with similar stocks. Shares of Yakult Honsha are low in value (priced high) with a consolidated Value Rank of 15 (worse than 85% of alternatives) and show below-average growth (Growth Rank of 13) but are safely financed (Safety Rank of 67), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 13, is a sell recommendation based on Yakult Honsha's financial characteristics. As the company Yakult Honsha's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 15) and low growth (Obermatt Growth Rank of 13), 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 67) 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	15
Growth Rank	13
Safety Rank	67
Combined Rank	13

Country	Japan
Industry	Packaged Foods & Meats
Index
Size class	X-Large

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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Research History: Yakult Honsha

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	59	17	20	15
GROWTH
GROWTH	29	61	31	13
SAFETY
SAFETY	100	71	73	67
SENTIMENT
SENTIMENT	n/a	31	22	^new
360° VIEW
360° VIEW	n/a	29	18	^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 Yakult Honsha is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	59	17	20	15
GROWTH
GROWTH	29	61	31	13
SAFETY
SAFETY	100	71	73	67
COMBINED
COMBINED	76	37	28	13

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 15 (worse than 85% compared with alternatives), Yakult Honsha 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 Yakult Honsha. Price-to-Sales is 11 which means that the stock price compared with what market professionals expect for future profits is higher than 89% of comparable companies, indicating a low value concerning Yakult Honsha's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 25, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Yakult Honsha. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 34 and Dividend Yield, which is lower than 63% 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 15, is a sell recommendation based on Yakult Honsha's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Yakult Honsha? 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 Yakult Honsha? 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. Yakult Honsha 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)	44	19	11	11
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	62	25	43	34
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	63	23	27	25
DIVIDEND YIELD
DIVIDEND YIELD	49	16	37	37
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	59	17	20	15

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 13 (better than 13% compared with alternatives), Yakult Honsha shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Yakult Honsha. Only Capital Growth has a good rank of 66, which means that currently professionals expect the company to grow its invested capital more than 25% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 12 which means that currently professionals expect the company to grow less than 88% of its competitors. Profit Growth with a rank of 25 and Stock Returns with a rank of 23 are also low (below 77% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 13, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Yakult Honsha is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the 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 limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	19	52	45	12
PROFIT GROWTH
PROFIT GROWTH	87	54	34	25
CAPITAL GROWTH
CAPITAL GROWTH	n/a	19	90	66
STOCK RETURNS
STOCK RETURNS	33	79	7	23
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	29	61	31	13

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 67 (better than 67% compared with alternatives), the company Yakult Honsha has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Yakult Honsha 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 Yakult Honsha. Leverage is at a rank of 70, meaning the company has a below-average debt-to-equity ratio. It has less debt than 70% of its competitors. Liquidity is also good at a rank of 81, meaning the company generates more profit to service its debt than 81% 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 37, 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 63% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 67 (better than 67% compared with alternatives), Yakult Honsha has a financing structure that is 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 Yakult Honsha. 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 Yakult Honsha 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	90	62	68	70
REFINANCING
REFINANCING	43	53	37	37
LIQUIDITY
LIQUIDITY	100	73	83	81
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	100	71	73	67

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Yakult Honsha 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	37	37	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	42	11	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	33	36	^new
MARKET PULSE
MARKET PULSE	n/a	55	54	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	31	22	^new

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