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CSGP Stock Study (11-14-25)

Posted by on March 27, 2025 at 08:22 | Last modified: November 14, 2025 10:39

I recently did a stock study on CoStar Group (CSGP, $68.53).

Value Line (VL) writes:

     > CoStar Group, Inc., founded in 1987, is a leading provider of commercial
     > and residential real estate information, analytics, online marketplaces,
     > and 3D digital twin technology. Web properties include Homes.com, the
     > second-largest real estate marketplace in the U.S. by traffic; LoopNet,
     > the most heavily trafficked commercial real estate marketplace on the
     > Web; as well as the apartment resource site Apartments.com.

Since 2016, the medium-sized company has grown sales and earnings at annualized rates of 16.3% and 7.5%, respectively (2015 excluded from full analysis as -$0.01/share EPS mathematically inflates growth rate to 49.1%). Through ’23, lines are mostly up, straight, and parallel except for EPS dips in ’20 (large) and ’23. While sales grows every single year, ’24 EPS decreases 63% YOY and results in an overall visual inspection that—I dare say—fails.

Google AI writes:

     > CSGP’s earnings per share (EPS) was down sharply in 2024 primarily
     > due to a significant increase in aggressive investments in product
     > development and expansion, particularly for its Homes.com initiative,
     > which outstripped revenue growth in the near term… while CSGP
     > reported robust revenue growth of 11% for the full year 2024, the
     > heavy operating costs associated with its expansion efforts led to a
     > decrease in operating margins and pressure on its net income and EPS.

Not surprisingly, 5- (9-) year EPS R^2 is 0.12 (0.18) and VL scores Earnings Predictability at 50. I am pursuing the study regardless because of my fascination with growth rates (see below).

Since 2016, PTPM leads peer and industry averages despite falling from 16.3% to 7.7% (’24) with a last-5-year mean of 17.5%. ROE leads peers but trails the industry while falling from 5.3% to 1.9% (’24) with a last-5-year mean of 4.5%. Debt-to-Capital is much less than peer and industry averages while falling from 17.0% to 13.2% with a last-5-year mean of 14.8%.

Quick Ratio is 2.83 and Interest Coverage is “well in the double digits” per M* who assigns “Wide” Economic Moat, gives “Exemplary” rating for Capital Allocation, and gives a Financial Health grade of A (per BI website). VL gives a B++ rating for Financial Strength.

With regard to sales growth:

My 12.0% forecast is below the range.

With regard to EPS growth:

My 32.0% forecast is below the long-term-estimate range (mean of six: 40.7%). Initial value is ’24 EPS of $0.34/share rather than 2025 Q3 $0.05 (TTM).

My Forecast High P/E is 68.0. Since 2016, high P/E increases from 85.8 to 295 (’24) with a last-5-year mean of 157 and last-5-year-mean average P/E of 129. I am below the range (68.6 in ’18) and way above my comfort zone but this situation is unique (perhaps nonsensical).

My Forecast Low P/E is 37.0. Since 2016, low P/E increases from 55.9 to 201 (’24) with a last-5-year mean of 102. I am forecasting below the range (37.8 in ’19).

My Low Stock Price Forecast is $48.00. Default ($12.60) based on initial value given above is unreasonably low at 81.6% (80.3%) less than previous closing price (52-week low). My [arbitrary] projection is 30.0% and 24.8% less, respectively.

These inputs land CSGP in the HOLD zone with a U/D ratio of 1.2. Total Annualized Return (TAR) is 6.2%.

PAR (using Forecast Average–not High–P/E) of 0.8% is unthinkable for an investment prospect. If a healthy margin of safety (MOS) anchors the study, then I can focus on TAR instead but even that is below what I like to see in a medium-size company.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). I’m not surprised to see MS, currently, is just me.

My forecast high price is $92.50: much lower than VL’s $180.00. VL projects a future average annual P/E of 50.0 and high EPS of $3.00/share (versus my $1.36). That equates to a stock price of $150, which is halfway between its $120-$180 range.

I think MOS is robust in this study because my inputs are near or below historical/analyst averages/ranges.

With regard to valuation, PEG is 2.0 and 33 per Zacks and my projected P/E (low initial value): both overvalued (albeit massively conflicting). Relative Value [(current P/E) / 5-year-mean average P/E] is richest I have ever seen at 8.7. “Quick and dirty DCF” and M* have stock undervalued by 49% and 16%, respectively, while CFRA has it overvalued by 50%.

The overall analyst consensus is bullish. M* and CFRA rate the stock 4 stars and BUY, respectively. Analyst 12-month stock projections are up 2%, 43%, and 53% for low, medium, and high averages, respectively. VL is also quite bullish despite just lowering to its worst (5) Timeliness rating.

Who really knows?

Moral to the story: don’t bother studying stocks unless they are up, straight, and parallel.

Per U/D, CSGP is a BUY under $59/share. BI TAR criterion is met [92.5 / ((14.87 / 100 ) +1 ) ^ 5] ~ $46 given a forecast high price ~$93 (no dividend).

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IT Stock Study (11-13-25)

Posted by on March 24, 2025 at 07:10 | Last modified: November 13, 2025 09:46

I recently did a stock study on Gartner Inc. (IT, $230.13). The previous study is here.

CFRA writes:

     > Gartner, Inc. (IT) is one of the world’s largest research and
     > advisory providers. [Gartner] supplies business leaders with
     > indispensable insights, advice, and tools to achieve their goals and
     > help facilitate business outcomes. [Gartner] currently services
     > more than 15,000 organizations in over 100 countries worldwide.

Over the past decade, the medium-sized company has grown sales and earnings at annualized rates of 12.4% and 29.7% [2017 excluded from full analysis as $0.04/share EPS—primarily due to significant one-time expenses from CEB acquisition (per Google AI)—otherwise inflates growth to 46.5%]. Lines are mostly up, straight, and parallel except for sales dip in ’20 and EPS decline in ’17-’18. Five- (10-) year EPS R^2 is 0.79 (0.78) and Value Line (VL) scores Earnings Predictability at 80.

Over the past decade (excluding ’17), PTPM leads peer and industry averages while climbing from 12.6% (’15) to 22.1% (’24) with a last-5-year mean of 17.8%. ROE swings wildly from -1819% (’16) to 226.9% (’21) with a last-5-year mean (excluding ’21 and -1215% for ’22) of 98.3%. Debt-to-Capital is greater than peer and industry averages despite falling from 119% (’15) to 68.1% (’24) with a last-5-year mean of 81.1%.

Quick Ratio is 0.73 and Interest Coverage 9.3 per M* who assigns “Narrow” [quantitative] Economic Moat and gives a Financial Health grade of C (per BI website). VL gives a B++ rating for Financial Strength. Rather than pay down debt, the company bought back a record $1B in stock for 2025 Q3.

With regard to sales growth:

My 2.0% forecast is below the range.

With regard to EPS growth:

My 2.0% forecast is near bottom of the long-term-estimate range (mean of four: 7.2%). Initial value is ’24 EPS of $16.00/share rather than 2025 Q3 $11.40 (TTM).

My Forecast High P/E is 30.0. Over the past 10 years (excluding outliers over 100 in ’17-’18), high P/E decreases from 45.6 (’15) to 34.9 (’24) with last-5-year mean of 41.8 and last-5-year-mean average P/E of 32.6. I am below the range.

My Forecast Low P/E is 16.0. Over the past 10 years [excluding 2259 (’17) and 84.2 (’18) outliers], low P/E decreases from 36.1 (’15) to 25.7 (’24) with last-5-year mean of 23.3. I am forecasting below the range (16.3 in ’21).

My Low Stock Price Forecast (LSPF) is $160.00. Default ($256.00) based on initial value given above is INVALID on today’s date. My [arbitrary] projection is 30.5% below the previous closing price and 28.1% less [perhaps unreasonably low, one could argue] than the 52-week low.

These inputs land IT in the BUY zone with a U/D ratio of 4.3. Total Annualized Return (TAR) is 18.2%.

PAR (using Forecast Average–not High–P/E) of 12.0% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can focus on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only 8 studies done in the past 90 days (my study and 6 outliers excluded) averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 6.5%, 6.0%, 33.1, and 20.7. Although sample size is too small for a valid comparison, I am lower across the board. VL projects a future average annual P/E of 25.0: less than MS (26.9) but greater than mine (23.0).

MS high / low EPS are $21.77 / $16.25 versus my $17.67 / $16.00 (per share). My high EPS is less due to a lower growth rate. VL’s $17.00 high EPS is less than both.

MS LSPF of $217.60 implies a Forecast Low P/E of 13.4: much less than the above-stated 20.7. MS LSPF is 35.3% less than the default $16.25/share * 20.7 = $336.38 (INVALID on today’s date) resulting in much more conservative zoning. MS LSPF is still 36.0% greater than mine, however.

MOS is robust in this study because my inputs are near or below historical/analyst averages/ranges. Tiny sample size aside, MS TAR (24.3%) exceeding mine by 6.1% per year and my lower LSPF are also suggestive of MOS.

With regard to valuation, PEG is 0.54 and 9.9 per M* and my projected P/E (low growth rate): massively conflicting. Relative Value [(current P/E) / 5-year-mean average P/E] is very inexpensive at 0.62. “Quick and dirty DCF” [CFRA] has stock undervalued by 41% [39%].

Per U/D, IT is a BUY under $252/share. BI TAR criterion is met [530.1 / ((14.87 / 100 ) +1 ) ^ 5] ~ $265 given a forecast high price ~$530 (no dividend).

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EXLS Stock Study (11-12-25)

Posted by on March 21, 2025 at 07:10 | Last modified: November 12, 2025 09:33

I recently studied ExlService Holdings, Inc. (EXLS, $39.57). The previous study is here.

M* writes:

     > ExlService Holdings Inc. is a business process management company
     > that provides digital operations and analytical services to clients
     > driving enterprise-scale business transformation initiatives that
     > leverage company’s deep expertise in analytics, AI, ML and cloud.
     > The company offers business process outsourcing and automation
     > services, and data-driven insights to customers across multiple
     > industries. The company operates through four segments based on
     > the products and services offered and markets served: Insurance,
     > Healthcare, Emerging, Analytics. The vast majority of the company’s
     > revenue is earned in the United States, and more than half of its
     > revenue comes from Analytics segment.

Over the past decade, the medium-size company has grown sales and EPS at annualized rates of 12.5% and 18.8%, respectively. Lines are mostly up, straight, and parallel except for a sales dip in ’20 and EPS dip in ’17. Value Line (VL) gives an Earnings Predictability score of 90.

Over the past decade, PTPM leads peer and industry averages while ranging from 6.8% in ’18 to 14.6% in ’23 with a last-5-year mean of 13.5%. ROE trails peer and industry averages despite increasing from 11.2% (’15) to 21.6% (’24) with a last-5-year mean of 18.3%. Debt-to-Capital is lower than peer and industry averages despite increasing from 13.2% (’15) to 28.2% (’24) with a last-5-year mean of 29.2%.

Quick Ratio is 2.57 and Interest Coverage 17.8 per M* who assigns “Wide” Economic Moat and gives an A grade for Financial Health (per BI website). VL gives a B++ grade for Financial Strength.

With regard to sales growth:

I am forecasting below the range at 9.0% per year.

With regard to EPS growth:

My 12.0% per year forecast is below the long-term-estimate range (mean of six: 14.3%). Initial value is ’24 EPS of $1.21/share rather than 2025 Q3 $1.47 (TTM).

My Forecast High P/E is 30.0. Over the past 10 years, high P/E ranges from 30.6 in ’16 to 45.6 in ’17 with a last-5-year mean of 38.9 and a last-5-year-mean average P/E of 30.5. I am below the range.

My Forecast Low P/E is 20.0. Over the past 10 years, low P/E ranges from 15.7 in ’20 to 31.8 in ’17 with a last-5-year mean of 22.2. I am near the bottom of the range [only ’20 and ’15 (18.4) are less].

My Low Stock Price Forecast (LSPF) is $27.50. Default ($24.20) based on initial value given above is unreasonably low at 38.8% (35.1%) less than the previous close (52-week low). My [arbitrary] selection is 30.5% (26.3%) less, respectively.

These inputs land EXLS in the HOLD zone with a U/D ratio of 2.0. Total Annualized Return (TAR) is 10.1%.

PAR (using Forecast Average—not High—P/E) of 6.1% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 182 studies done in the past 90 days (65 outliers including mine excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 11.8%, 13.2%, 34.4, and 22.0, respectively. I am lower across the board. VL projects a future average annual P/E of 25.0 that is less than MS (28.2) and equal to mine.

MS high / low EPS are $2.65 / $1.42 versus my $2.13 / $1.21 (per share). My high EPS is less due to a lower growth rate and initial value. VL’s ACE high EPS of $2.30 is in the middle.

MS LSPF of $31.60 implies a Forecast Low P/E of 22.3: greater than the above-stated 22.0. MS LSPF is 1.2% greater than the default $1.42/share * 22.0 = $31.24 resulting in [slightly] more aggressive zoning. MS LSPF is 14.9% greater than mine.

With regard to valuation, PEG is 1.5 and 2.0 per Zacks and my projected P/E, respectively: fairly valued (1.0 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is slightly low at 0.88.

MOS is robust in the current study because my inputs are below MS and near/below respective analyst/historical ranges. As further support, MS TAR is 7.2%/year greater than mine.

Per U/D, EXLS is a BUY under $36.60/share. BI TAR criterion would be met [64.0 / ((14.87 / 100 ) +1 ) ^ 5] = $32 with a forecast high price of $64.

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TTEK Stock Study (11-11-25)

Posted by on March 18, 2025 at 07:26 | Last modified: November 11, 2025 10:58

I recently did a stock study on Tetra Tech Inc. (TTEK, $32.07). The previous study is here.

M* writes:

     > Tetra Tech Inc provides consulting and engineering services for
     > environmental, infrastructure, resource management, energy, and
     > international development markets. It specializes in providing
     > water-related services for public and private clients. It designs
     > infrastructure, facilities, and other structures with complex
     > plans and resource management. Tetra Tech has two reportable
     > segments. Its Government Services Group (GSG) segment includes
     > activities with U.S. government clients (federal, state and
     > local) and activities with development agencies world-wide.
     > Commercial/International Services Group (CIG) segment, which
     > derives maximum revenue, includes activities with U.S. commercial
     > clients and international clients other than development agencies.

Since 2016, the medium-size company has grown sales and EPS at annualized rates of 8.1% and 19.0%, respectively [2015 ($0.13/share) excluded to avoid artificial inflation of EPS growth rate]. Lines are mostly up, straight, and parallel except for sales dip in ’20 [FY ends 9/30]. 10-year sales R^2 is 0.88 and Value Line (VL) gives an Earnings Predictability score of 95.

Since 2016, PTPM leads peer and industry averages while trending up from 4.8% to 8.9% (’24) with a last-5-year mean of 8.7%. ROE also leads peer and industry averages while trending up from 9.5% to 19.8% (’24) with a last-5-year mean of 19.3%. Debt-to-Capital is less than peer and industry averages despite increasing from 28.5% to 35.7% (’24) with a last-5-year mean of 33.8%.

Quick Ratio is 1.1 and Interest Coverage is 9.6 per M* who gives a “Narrow” [quantitative] Economic Moat and Financial Health grade of B (per BI website). VL gives a B++ rating for Financial Strength.

With regard to sales growth:

While the rough patch is projected to be short-term, I am forecasting zero long-term growth to be conservative.

With regard to EPS growth:

My 3.0% forecast is less than both long-term estimates (mean: 8.8%). Initial value is ’24 EPS of $1.23/share rather than 2025 Q3 $0.80 (annualized).

My Forecast High P/E is 29.0. Since 2016, high P/E increases from 25.5 to 39.2 (’24) with a last-5-year mean of 36.1 and a last-5-year-mean average P/E of 29.5. I am at lowest level since ’17 (23.5).

My Forecast Low P/E is 18.0. Since 2016, low P/E increases from 16.1 to 23.3 (’24) with a last-5-year mean of 22.9. I am forecasting the lowest level since ’17 (17.0).

My Low Stock Price Forecast (LSPF) of $22.10 is default given initial value from above. That is 31.1% less than the previous close, 19.0% less than the 52-week low, and 10.2% less than the 2023 low.

Since 2016, Payout Ratio (PR) decreases from 23.9% to 17.9% (’24) with a last-5-year mean of 18.5%. I am forecasting below the range at 15.0%.

These inputs land TTEK in the HOLD zone with a U/D ratio of 0.9. Total Annualized Return (TAR) is 5.8%.

PAR (using Forecast Average—not High—P/E) of 1.6% is less than the current risk-free rate (T-bills). If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR but even that is less than I seek in a medium-size company.

To assess MOS, I would compare my inputs with those of Member Sentiment (MS). Four studies (mine excluded) available from the past 90 days are too small a sample for anything but anecdotal comparison. Averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 9.5%, 11.4%, 32.0, 20.2, and 18.6%. I am lower across the board. VL projects an average annual P/E of 28.0, which is greater than MS (26.1) and greater than mine (23.5).

MS high / low EPS are $1.94 / $1.09 versus my $1.43 / $1.23 (per share). My high EPS is less due to a lower growth rate. VL’s $1.80 high EPS is in the middle.

MS LSPF of $25.30 implies a Forecast Low P/E of 23.2 versus the above-stated 20.2. MS LSPF is 14.9% greater than the default $1.09/share * 20.2 = $22.02 resulting in more aggressive zoning. MS LSPF is 14.5% greater than mine.

MOS is robust in this study because my inputs are near or below historical/analyst averages/ranges. MS TAR (13.3%) exceeding mine by 7.5% per year and my lower LSPF are suggestive [anecdotally] of MOS.

With regard to valuation, PEG is 4.3 and 12.5 per M* and my projected P/E, respectively: significantly overvalued. Relative Value [(current P/E) / 5-year-mean average P/E] is also rich at 1.36. “Quick and dirty DCF” has stock undervalued by 17%.

Per U/D, TTEK is a BUY just under $27/share. BI TAR criterion would be met [41.5 / ((14.37 / 100 ) +1 ) ^ 5] ~ $21.20 with a forecast high price ~$42.

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DPZ Stock Study (11-10-25)

Posted by on March 13, 2025 at 07:24 | Last modified: November 10, 2025 09:06

I recently did a stock study on Domino’s Pizza Inc. (DPZ, $410.18). The previouis study is here.

M* writes:

     > Domino’s is a restaurant operator and franchiser with over
     > 21,500 global stores across more than 90 international markets
     > at the end of the second quarter of 2025. The firm generates
     > revenue through the sales of pizza, wings, salads, sandwiches,
     > and desserts at company-owned stores, royalty and marketing
     > contributions from franchise-operated stores, and its network
     > of 25 domestic (and five Canadian) dough manufacturing and
     > supply chain facilities, which centralize purchasing, preparation,
     > and last-mile delivery for the firm’s US and Canadian
     > restaurants. With roughly $19.2 billion in 2024 system sales,
     > Domino’s is the largest player in the global pizza market,
     > ahead of Pizza Hut, Little Caesars, and Papa John’s.

Over the past decade, the medium-size company has grown sales and earnings at annualized rates of 9.0% and 18.7%, respectively. Lines are mostly up, straight, and parallel except for sales dip in ’23 and EPS dip in ’22. Five-year EPS R^2 is 0.75 and Value Line (VL) gives an Earnings Predictability score of 95.

Over the past decade, PTPM lags the industry but leads peers while ranging from 12.5% in ’18 to 15.3% in ’24 with a last-5-year mean of 14.1%. ROE leads the industry but lags peers while ranging from d15.2% in ’20 to d9.0% in ’17 with a last-5-year mean of d12.8% [negative due to long history of using debt to buy back shares therefore resulting in shareholders’ deficit]. Debt-to-Capital soars above peer and industry averages while ranging from 412% in ’20 to 754% in ’17 with a last-5-year mean of 455%.

Quick Ratio is 0.77 and Interest Coverage 4.9 per M* who assigns “Wide” Economic Moat, gives “Exemplary” rating for Capital Allocation [puzzling since analyst note describes balance sheet as average with large debt load in addition to having mixed view on shareholder distributions due to history of buying back stock for inflated prices], and a B grade for Financial Health (per BI website). VL gives a B grade for Financial Strength.

With regard to sales growth:

I am forecasting toward lower end of the range.

With regard to EPS growth:

I am forecasting below the long-term-estimate range (mean of seven: 10.8%). Initial value is ’24 EPS of $16.69/share rather than 2025 Q3 EPS of $17.11 (annualized).

My Forecast High P/E is 26.0. Over the past 10 years, high P/E ranges from 28.4 in ’23 to 45.1 in ’22 with a last-5-year mean of 36.6 and a last-5-year-mean average P/E of 29.6. I am below the range.

My Forecast Low P/E is 19.0. Over the past 10 years, low P/E ranges from 19.5 in ’23 to 26.8 in ’15 and ’17 with a last-5-year mean of 22.5. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $317.10 is default based on initial value given above. That is 22.7% less than the previous close and 19.3% less than the 52-week low.

Over the past 10 years, Payout Ratio (PR) ranges from 25.2% in ’20 to 36.2% in ’24 with a last-5-year average of 31.5%. I am forecasting below the range at 25.0%.

These inputs land DPZ in the HOLD zone with an U/D ratio of 2.1. Total Annualized Return (TAR) is 9.2%.

PAR (using Forecast Average–not High–P/E) of 6.2% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors this study, then I can focus on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only 22 studies done in the past 90 days (10 outliers including my study excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 5.7%, 9.0%, 29.9, 20.8, and 31.1%. Although sample size is too small for a valid comparison, I am lower across the board. VL projects a future average annual P/E of 25.0: less than MS (25.4) but greater than mine (22.5).

MS high / low EPS are $26.50 / $17.06 versus my $23.41 / $16.69 (per share). My high EPS is less due to a lower growth rate. VL’s $31.55 high EPS soars above both.

MS LSPF of $352.80 is roughly equal to the above-stated 20.8. MS LSPF is 11.3% greater than mine, however.

MOS is robust in this study because my inputs are near or below historical/analyst averages/ranges. Tiny sample size aside, MS TAR (14.8%) exceeding mine by 5.6% per year and my lower LSPF are suggestive of MOS.

With regard to valuation, PEG is 2.2 and 3.2 per Zacks and my projected P/E: somewhat overvalued (3.0 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is a bit cheap at 0.81. “Quick and dirty DCF” has stock undervalued by 20%.

Per U/D, DPZ is a BUY under $390/share. BI TAR criterion would be met [608.7 / ((13.87 / 100 ) +1 ) ^ 5] ~ $318 given a forecast high price ~$609.

A 90-day free trial to BetterInvesting® may be secured here (also see link under “Pages” section at top right of this page).

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POOL Stock Study (11-10-25)

Posted by on March 10, 2025 at 07:19 | Last modified: November 8, 2025 08:44

I recently did a stock study on Pool Corp. (POOL, $252.01). Previous studies are here and here.

M* writes:

     > Pool Corp distributes swimming pool supplies and related
     > products. Its products include non-discretionary pool-
     > maintenance products, like chemicals and replacement parts,
     > as well as pool equipment, like packaged pools (kits to build
     > swimming pools), cleaners, filters, heaters, pumps, and lights.
     > Customers include pool builders and remodelers, independent
     > retail stores, and pool repair and service companies.

Over the past decade, the medium-size company has grown sales and earnings at annualized rates of 11.9% and 21.6% per year, respectively. Lines are up, mostly straight, and parallel except for sales+EPS declines in ’23 and ’24. Five- (10-) year EPS R^2 is 0.02 (0.83) and Value Line (VL) gives an Earnings Predictability score of 65.

Over the past decade, PTPM leads peer and industry averages while increasing from 8.8% (’15) to 10.7% (’24) with a last-5-year mean of 13.2%. ROE leads peer and industry averages despite falling from 47.4% (’15) to 29.7% (’24) with a last-5-year mean of 50.7%. Debt-to-Capital is higher than peer and industry averages despite falling from 56.3% (’15) to 50.0% (’24) with a last-5-year mean of 53.0%.

Current Ratio is 0.8 and Interest Coverage is 12.9 per M* who assigns “Narrow” Economic Moat and a B grade for Financial Health (per BI website). VL gives an A grade for Financial Strength.

With regard to sales growth:

My -1.0% per year forecast is below the range.

With regard to EPS growth:

My 3.0% per year forecast is below the long-term-estimate range (mean of five: 6.1%). Initial value is 2025 Q3 EPS of $10.97/share (annualized) rather than ’24 EPS of $11.30.

My Forecast High P/E is 29.0. Over the past 10 years, high P/E increases from 29.1 (’15) to 37.4 (’24) with a last-5-year mean of 35.9 and a last-5-year-mean average P/E of 28.0. I am below the range.

My Forecast Low P/E is 18.0. Over the past 10 years, low P/E ranges from 14.9 in ’22 to 26.0 in ’24 with a last-5-year mean of 20.0. I am forecasting toward bottom of the range [only ’22 and ’20 (17.9) are less].

My Low Stock Price Forecast (LSPF) of $197.50 is default based on initial value given above. That is 21.6% less than the previous close and 18.4% less than the 52-week low.

Over the past decade, Payout Ratio (PR) ranges from 18.7% in ’21 to 41.6% in ’24 with a last-5-year mean of 27.7%. I am forecasting below the range at 18.0%.

These inputs land POOL in the HOLD zone with a U/D ratio of 2.1. Total Annualized Return (TAR) is 8.5%.

PAR (using Forecast Average—not High—P/E) of 4.2% is less than I seek in a medium-size company. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on only nine studies (mine and 2 outliers excluded) over the past 90 days, averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 3.5%, 7.6%, 29.0, 19.8, and 25.0%. Although sample size is too small for a valid comparison, I am lower on four and equal on Forecast High P/E. VL’s projected average annual P/E of 27.5 is higher than MS (24.4) and mine (23.5).

MS high / low EPS are $16.11 / $10.94 versus my $12.72 / $10.97 (per share). VL’s $17.75 high EPS soars above both.

MS LSPF of $226.00 implies a Forecast Low P/E of 20.7 versus the above-stated 19.8. MS LSPF is 4.3% greater than the default $10.94/share * 19.8 = $216.61 resulting in more aggressive zoning. MS LSPF is also 14.4% greater than mine.

MOS is robust in this study because my inputs are near or below historical/analyst averages/ranges. Tiny sample size aside, MS TAR (12.6%) exceeding mine by 4.1% per year and my lower LSPF are suggestive of MOS.

With regard to valuation, PEG is 3.5 and 7.4 (low growth rate) per Zacks/M* and my projected P/E: extremely overvalued. Relative Value [(current P/E) / 5-year-mean average P/E] is somewhat cheap at 0.82.

Per U/D, POOL is a BUY under $240/share. BI TAR criterion would be met [368.9 / ((14.27 / 100 ) +1 ) ^ 5] ~ $189 given a forecast high price ~$369.

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COO Stock Study (11-7-25)

Posted by on March 7, 2025 at 07:01 | Last modified: November 7, 2025 12:02

I recently did a stock study on Cooper Companies, Inc. (COO, $69.00).

M* writes:

     > CooperCompanies is one of the largest eyecare companies in the
     > US. It operates in two segments: CooperVision and CooperSurgical.
     > CooperVision is a pure-play contact lens business with a suite of
     > spherical, multifocal, and toric contact lenses. The company also
     > has one of the most comprehensive specialty lens portfolios in
     > the world. With brands including Proclear, Biofinity, MyDay, and
     > Clariti, Cooper controls roughly one fourth of the US contact lens
     > market. CooperSurgical, founded in 1990, is made up of
     > equipment related to reproductive care, fertility, and women’s
     > care. Cooper has the broadest medical device coverage of the
     > entire IVF cycle. It also has Paragard, the only hormone-free
     > IUD in the US, and controls 17% of the US IUD market.

Over the past decade, the medium-size company has grown sales and earnings at annualized rates of 8.7% and 5.0%, respectively [excluding ’21 due to $14.79 EPS spike resulting largely from one-time “recognition of deferred tax assets following an intra-group transfer of intellectual property to a UK subsidiary… in the third quarter of 2021” (Google AI) that would otherwise inflate growth to 9.4%/year]. Lines are mostly up, straight, and parallel except for sales dip in ’20 and EPS declines in ’18, ’20, and ’23 (FY ends Oct 31). Five- (10-) year EPS R^2 is 0.55 (0.17) and Value Line (VL) gives an Earnings Predictability score of 60.

Over the past decade, PTPM is about even with peer and industry averages while ranging from 11.0% in ’20 to 18.4% in ’17 with a last-5-year mean of 13.7%. ROE is about even with peer and industry averages while ranging from 3.9% in ’23 to 12.7% in ’19 (excluding 43.0% upside outlier in ’21) with a last-5-year mean of 5.1%. Debt-to-Capital is slightly lower than peer and industry averages while decreasing from 33.6% in ’15 to 24.2% in ’24 with a last-5-year mean of 26.5%.

Quick Ratio is 0.91 and Interest Coverage is 7.0 per M* who assigns “Narrow” Economic Moat, gives “Standard” rating for Capital Allocation, and a B grade for Financial Health (per BI website). VL gives an A grade for Financial Strength.

With regard to sales growth:

My 4.0% per year forecast is below the range.

With regard to EPS growth:

My 7.0% per year forecast is below the long-term estimate range [mean of six: 10.9%]. Initial value is ’24 EPS of $1.96/share rather than 2025 Q3 $2.03 (annualized).

My Forecast High P/E is 33.0. Over the past 10 years, high P/E ranges from 7.8 in ’21 (offset by 76 in ’20) to 99.6 in ’18 [due to a low Q3 EPS of $0.65 with stock price around $65 per Google AI, which may not be split-adjusted] for a last-5-year mean of 53.0 and a last-5-year-mean-average P/E of 43.5. I am toward the low end of the range (only ’21 is less).

My Forecast Low P/E is 29.0. Over the past 10 years, low P/E ranges from 5.4 in ’21 to 77.0 in ’18 (see above) with a last-5-year mean of 33.9. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) is $48.00. Default ($41.20) based on initial value given above seems unreasonably low at 40.3% (33.3%) less than the previous close (52-week low). My [arbitrary] selection is 30.4% (22.3%) less, respectively.

Over the past decade, Payout Ratio (PR) has decreased from 1.4% in ’15 to 0.0% in ’24. Since the dividend is still suspended, I am forecasting zero.

These inputs land COO in the HOLD zone with a U/D ratio of 1.0. Total Annualized Return (TAR) is 5.7%.

PAR (using Forecast Average—not High—P/E) of 1.5% is less than the current risk-free rate. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR but even that is less than I seek for a medium-size company.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only five studies done in the past 90 days (my study excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 6.0%, 12.7%, 45.0, 29.7, and 0.5%. Although such a small sample size precludes any legit comparison, I am lower across the board. VL projects future average annual P/E of 22.0 that is much less than mine (31.0).

MS high / low EPS are $4.23 / $2.03 versus my $2.75 / $1.96 (per share). VL’s $5.50 high EPS is 100% greater than mine (offsets future P/E difference just mentioned).

MS LSPF of $57.00 implies a Forecast Low P/E of 28.1 versus the above-stated 29.7. MS LSPF is 5.5% less than the default $2.03/share * 29.7 = $60.29 resulting in more conservative zoning. MS LSPF is 18.8% greater than mine, however.

MOS is robust in this study because my inputs are near or below historical/analyst averages/ranges. Tiny sample size aside, MS TAR (21.3%) exceeding mine by 15.6% per year and my lower LSPF are suggestive of MOS.

With regard to valuation, PEG is 1.7 and 4.5 per Zacks and my projected P/E: somewhat overvalued (4.3 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is cheap at 0.78. “Quick and dirty DCF” has the stock undervalued by 29%.

Per U/D, COO is a BUY under $58.70/share. BI TAR criterion would be met [90.8 / ((14.87 / 100 ) +1 ) ^ 5] = $45.40 with a forecast high price ~$91 (no dividend).

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DXCM Stock Study (11-7-25)

Posted by on March 4, 2025 at 07:10 | Last modified: November 7, 2025 08:24

I recently did a stock study on Dexcom, Inc. (DXCM, $58.02).

M* writes:

     > DexCom designs and commercializes continuous glucose
     > monitoring systems for diabetic patients. CGM systems
     > serve as an alternative to the traditional blood glucose
     > meter process, and the company is evolving its CGM
     > systems to provide integration with insulin pumps from
     > Insulet and Tandem for automatic insulin delivery.

Since turning profitable in 2019, the medium-size company has grown sales and earnings at annualized rates of 22.5% and 29.5%, respectively. Lines are mostly up, straight, and parallel except for an EPS spike and subsequent decline in ’20-’21. Five- (Six-) year EPS R^2 is 0.18 (0.48) and Value Line (VL) gives an Earnings Predictability score of 45.

Since 2019, PTPM is about even with peer and industry averages while increasing from 7.1% to 17.6% (’24) with a last-5-year mean of 13.9%. ROE is about even with peer and industry averages while increasing from 13.2% to 28.0% (’24) with a last-5-year mean of 21.4%. Debt-to-Capital is greater than peer and industry averages while ranging from 45.5% in ’21 to 56.8% in ’20 with a last-5-year mean of 51.3%.

Quick Ratio is 1.4 and Interest Coverage is 52 per M* who assigns “Narrow” Economic Moat, gives “Exemplary” rating for Capital Allocation, and a B grade for Financial Health (per BI website). VL gives a B+ grade for Financial Strength.

With regard to sales growth:

My 12.0% per year forecast is below the range.

With regard to EPS growth:

My 15.0% per year forecast is below the long-term estimate range [mean of seven: 22.8%]. Initial value is ’24 EPS of $1.42/share rather than 2025 Q3 $1.80 (annualized).

My Forecast High P/E is 45.0. Since 2019, high P/E ranges from 90.2 in ’20 to 425 in ’21 with four data points in triple digits. I am above the current P/E of 32.9 but way below the high P/E range.

My Forecast Low P/E is 29.0. Since 2019, low P/E ranges from 36.0 in ’20 to 205 in ’21 with a last-5-year mean (excluding ’21) of 54.7. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $41.20 is default based on initial value given above. That is 29.0% less than the previous closing price and 27.1% less than the 52-week low.

These inputs land DXCM in the BUY zone with a U/D ratio of 3.8. Total Annualized Return (TAR) is 16.8%.

PAR (using Forecast Average—not High—P/E) of 12.3% is decent for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only 22 studies done in the past 90 days (my study along with 5 outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E, are 14.9%, 19.4%, 51.8, and 35.0. I am lower across the board. VL projects future average annual P/E of 35.0 that is less than MS (43.4) and less than mine (37.0).

MS high / low EPS are $3.54 / $1.44 versus my $2.86 / $1.42 (per share). My high EPS is less due to a lower growth rate. VL’s $3.55 is greater than both.

MS LSPF of $52.60 implies a Forecast Low P/E of 36.5 versus the above-stated 35.0. MS LSPF is 4.4% greater than the default $1.44/share * 35.0 = $50.40 resulting in more aggressive zoning. MS LSPF is also 27.7% greater than mine.

MOS is robust in this study because my inputs are near or below historical/analyst averages/ranges. Although a small MS sample size only allows for anecdotal comparison, MS TAR (21.1%) exceeding mine by 4.3% per year and my lower LSPF are evidence for MOS.

With regard to valuation, PEG is 1.3 and 1.9 per Zacks/M* and my projected P/E: fairly valued. Relative Value is extremely cheap [(current P/E) / 5-year-mean average P/E] with history of sky-high P/Es, but I don’t find that credible as multiple contraction will occur sooner or later.

Reading reports makes it clear the company has its challenges from a qualitative standpoint. I let the analysts mind these details with the estimates they provide.

Nevertheless, discovering a BUY with MOS strong against a sufficient number of analysts [all with the opportunity to estimate accordingly] leaves me walking away with confidence.

Per U/D, DXCM is a BUY under $63/share. BI TAR criterion is currently met: [128.7 / ((14.87 / 100 ) +1 ) ^ 5] ~ $64 with a forecast high price ~$129 (no dividend).

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