Fact based stock research
Zensho Holdings (TSE:7550)

JP3429300001

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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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Zensho Holdings stock research in summary

zensho.co.jp

ANALYSIS: With an Obermatt Combined Rank of 59 (better than 59% compared with investment alternatives), Zensho Holdings (Restaurants, Japan) shares have above-average financial characteristics compared with similar stocks. Shares of Zensho Holdings are low in value (priced high) with a consolidated Value Rank of 19 (worse than 81% of alternatives), and are riskily financed (Safety Rank of 34, which means above-average debt burdens) but show above-average growth (Growth Rank of 93). ...read more

RECOMMENDATION: A Combined Rank of 59, is a buy recommendation based on Zensho Holdings's financial characteristics. As the company Zensho Holdings shows low value with an Obermatt Value Rank of 19 (81% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 93% of comparable companies (Obermatt Growth Rank is 93). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 34 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Zensho Holdings, even a low-value company (in terms of its key financial indicators) can be a good investment. 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	19
Growth Rank	93
Safety Rank	34
Combined Rank	59

Country	Japan
Industry	Restaurants
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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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Zensho Holdings

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	39	45	15	19
GROWTH
GROWTH	44	55	83	93
SAFETY
SAFETY	33	14	18	34
SENTIMENT
SENTIMENT	n/a	21	23	^new
360° VIEW
360° VIEW	n/a	18	16	^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 Zensho Holdings is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	39	45	15	19
GROWTH
GROWTH	44	55	83	93
SAFETY
SAFETY	33	14	18	34
COMBINED
COMBINED	18	24	27	59

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 19 (worse than 81% compared with alternatives), Zensho Holdings 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 Zensho Holdings. Price-to-Sales is 39 which means that the stock price compared with what market professionals expect for future profits is higher than 61% of comparable companies, indicating a low value concerning Zensho Holdings's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 23, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Zensho Holdings. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 25 and Dividend Yield, which is lower than 72% 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 19, is a sell recommendation based on Zensho Holdings's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Zensho Holdings? 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 Zensho Holdings? 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. Zensho Holdings 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)	61	76	37	39
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	21	26	8	25
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	30	45	17	23
DIVIDEND YIELD
DIVIDEND YIELD	46	30	28	28
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	39	45	15	19

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 93 (better than 93% compared with alternatives) for 2024, Zensho Holdings 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, where half of the indicators are below and half above average for Zensho Holdings. Profit Growth, with a rank of 81 (better than 81% of its competitors), and Capital Growth, with a rank of 99, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 39, which means that, currently, professionals expect the company to grow less than 61% of its competitors, and Stock Returns are at a rank of 43. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 93, is a buy recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. 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	36	9	89	39
PROFIT GROWTH
PROFIT GROWTH	17	100	88	81
CAPITAL GROWTH
CAPITAL GROWTH	n/a	50	1	99
STOCK RETURNS
STOCK RETURNS	36	45	99	43
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	44	55	83	93

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company Zensho Holdings 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 Zensho Holdings 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 Zensho Holdings. Liquidity is at 52, meaning the company generates more profit to service its debt than 52% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 31, 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 69% of its competitors. Leverage is also high at a rank of 23, which means that the company has an above-average debt-to-equity ratio. It has more debt than 77% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% compared with alternatives), Zensho Holdings 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	34	12	16	23
REFINANCING
REFINANCING	46	19	25	31
LIQUIDITY
LIQUIDITY	25	32	38	52
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	33	14	18	34

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Zensho Holdings 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	79	25	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	16	69	^new
MARKET PULSE
MARKET PULSE	n/a	9	5	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	21	23	^new

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