Companhia De Saneamento Basico Do Estado De Sao Paulo (SBS, Financial), a regulated utilities company, has been making waves in the stock market. As of August 16, 2023, the company's stock price stands at $11.62, with a market cap of $7.94 billion. The stock has seen a gain of 5.35% today and a 2.56% increase over the past four weeks. The company's impressive performance is reflected in its GF Score of 86 out of 100, indicating good outperformance potential.
Financial Strength Analysis
The Financial Strength of SBS is ranked at 5/10. This score is based on several factors, including the company's interest coverage of 3.75, indicating a manageable debt burden. The company's debt to revenue ratio is 0.80, which is relatively low, suggesting a healthy financial situation. However, the Altman Z-Score of 1.51, which measures the likelihood of bankruptcy, suggests some financial risk.
Profitability Rank Analysis
SBS's Profitability Rank is an impressive 9/10. The company's operating margin stands at 21.32%, and it has a Piotroski F-Score of 7, indicating a healthy profitability. The company has also shown consistent profitability over the past 10 years. However, the 5-year average trend of the operating margin is -7.70%, indicating some volatility in profitability.
Growth Rank Analysis
The company's Growth Rank is 9/10, reflecting strong growth in terms of revenue and profitability. The 5-year revenue growth rate is 7.80%, and the 3-year revenue growth rate is 7.00%. The 5-year EBITDA growth rate is 5.10%, indicating a steady increase in the company's business operations.
GF Value Rank Analysis
The GF Value Rank of SBS is 3/10, suggesting that the stock is currently overvalued. This rank is determined by the price-to-GF-Value ratio, a proprietary metric calculated based on historical multiples and an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.
Momentum Rank Analysis
The Momentum Rank of SBS is 6/10, indicating a moderate momentum in the stock price. This rank is determined using the standardized momentum ratio and other momentum indicators.
Competitor Analysis
When compared to its main competitors in the same industry, SBS holds a strong position. Compania de Saneamento de Minas Gerais - COPASA MG has a GF Score of 81, CIA Saneamento Do Parana-SANEPAR has a GF Score of 92, and American Water Works Co Inc has a GF Score of 85. Despite the intense competition, SBS's GF Score of 86 suggests that it has good outperformance potential.
Conclusion
In conclusion, Companhia De Saneamento Basico Do Estado De Sao Paulo has shown strong financial strength, profitability, and growth, as reflected in its high GF Score. Despite some financial risk and overvaluation, the company's consistent profitability and strong growth potential make it a promising investment. However, investors should keep an eye on the company's financial situation and market trends to make informed decisions.
