SFM Stock Study (1-9-26)

I recently studied Sprouts Farmers Market, Inc. (SFM, $77.09).

M* writes:

     > Sprouts Farmers Market Inc offers a specialty grocery experience
     > featuring an open layout with fresh produce at the heart of the
     > store. Sprouts inspire wellness naturally with a carefully
     > curated assortment products paired with purpose-driven people.
     > The company continues to bring products made with lifestyle-
     > friendly ingredients such as organic, plant-based, and gluten-free.
     > It approximately has 407 stores in nearly 23 states. The Company
     > has one operating segment that is healthy grocery stores.

Over the past decade, this medium-size company has grown sales and EPS at annualized rates of 8.0% and 18.0%, respectively. Lines are up, straight, and parallel except for sales+EPS dip in ’21. Five-year EPS R^2 is 0.56 and Value Line (VL) gives an Earnings Predictability score of 80.

Over the past decade, PTPM leads peer and industry averages while ranging from 3.5% in ’19 to 6.6% in ’24 with last-5-year mean of 5.6%. ROE leads peer but trails industry averages despite increasing from 15.6% (’15) to 27.7% (’24) with last-5-year mean of 26.9%. Debt-to-Capital is less than the industry but greater than peer averages while increasing from 26.1% (’15) to 56.0% (’24) withi last-5-year mean of 59.7%.

Quick Ratio is 0.5 and Interest Coverage 398 per M* who assigns “Narrow” [quantitative] Economic Moat and gives a C grade for Financial Health (per BI website). VL rates the company B+ for Financial Strength (and reports Interest Coverage over 25).

With regard to sales growth:

• YF gives YOY ACE 14.1% and 9.9% for ’25 and ’26, respectively (based on 15 analysts).
• Zacks gives YOY ACE 14.2% and 9.6% for ’25 and ’26, respectively (4 analysts).
• VL projects 11.0% annualized growth from ’24-’29.
• CFRA projects 14.5% YOY and 12.1% per year for ’25 and ’24-’26, respectively.
• M* gives 2-year ACE of 11.8%/year.

My 9.0% forecast is below the range.

With regard to EPS growth:

• MarketWatch projects 19.8% and 17.1% per year for ’24-’26 and ’24-’27, respectively (based on 19 analysts).
• Nasdaq.com gives ACE 5.9% YOY and 7.0%/year for ’26 and ’25-’27 (5 / 5 / 3 analysts for ’25 / ’26 / ’27).
• Seeking Alpha projects 4-year annualized growth of 17.8%.
• Finviz gives ACE 5-year annualized growth of 20.2% (6).
• LSEG estimates LTG at 20.3%.
• YF gives YOY ACE 40.5% and 9.5% for ’25 and ’26, respectively (12).
• Zacks gives YOY ACE 40.5% and 5.9% for ’25 and ’26 (5) along with 5-year growth of 16.5%/year.
• VL projects 17.8% annualized growth from ’24-’29.
• CFRA projects growth of 40.8% YOY and 23.7% per year for ’25 and ’24-’26 along with 3-year CAGR of 27.0%.
• M* gives long-term growth ACE of 13.0%.

My 10.0% forecast is below the long-term estimate range (mean of six: 17.6%). Initial value is 2025 Q3 EPS of $5.17 (TTM) instead of ’24 EPS of $3.75/share.

My Forecast High P/E is 14.0. Over the past 10 years, high P/E ranges from 11.5 in ’20 to 46.3 in ’15 with a last-5-year mean of 20.4 and a last-5-year-mean average P/E of 15.1. I am near bottom of the range (only ’20 is less).

My Forecast Low P/E is 9.0. Over the past 10 years, low P/E ranges from 5.3 in ’20 to 22.5 in ’16 with a last-5-year mean of 9.7. I am forecasting near bottom of the range (only ’20 is less).

My Low Stock Price Forecast (LSPF) is $54.00. Default based on initial value given above ($46.50) seems extremely low at 39.7% less than previous close and 37.5% less than 52-week low. My arbitrary selection is 30.0% (27.4%) less, respectively.

These inputs land SFM in the HOLD zone with a U/D ratio of 1.7. Total Annualized Return (TAR) is 8.6%.

PAR (using Forecast Average—not High—P/E) of 4.4% 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 the 8.6% TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 73 studies in the past 90 days (my study and 38 outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 10.8%, 12.2%, 19.4, and 9.7 respectively. I am lower across the board. VL projects a future average annual P/E of 18.0 that is greater than MS (14.6) and greater than mine (11.5).

MS high / low EPS are $8.88 / $5.00 versus my $8.33 / $5.17 (per share). My high EPS is less due to a lower growth rate. VL’s high EPS of $8.50 is in the middle.

MS LSPF of $51.70 implies a Forecast Low P/E of 10.3 versus the above-stated 9.7. MS LSPF is 6.6% greater than the default $5.00/share * 9.7 = $48.50 resulting in more aggressive zoning. MS LSPF is 6.2% less than mine, however.

MOS is robust in the study because my inputs are near or below historical/analyst/MS averages/ranges. Also suggestive of this assessment are MS TAR exceeding mine by 7.2% per year.

With regard to valuation, PEG is 0.84 and 1.4 per Zacks and my projected P/E, respectively: fairly valued (0.77 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is fair at 0.99. M* has the stock undervalued by 31%, though, and “Quick and Dirty DCF” has stock undervalued by 45%.

Per U/D, SFM is a BUY under $69.60/share. BI TAR criterion would be met [116.6 / ((14.87 / 100 ) +1 ) ^ 5] ~ $58 given a forecast high price ~$117 (no dividend).

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

CHKP Stock Study (1-7-26)

I recently studied Check Point Software Technologies, Ltd. Inc. (CHKP, $186.01). The previous study is here.

M* writes:

     > Check Point Software Technologies is a pure-play cybersecurity
     > vendor. The company offers solutions for network, endpoint,
     > cloud, and mobile security in addition to security management.
     > Check Point, a software specialist, sells to enterprises,
     > businesses, and consumers. Around 50% of revenue is generated
     > in Europe, the Middle East, and Africa, 40% from the Americas,
     > and 10% from the Asia-Pacific region. The firm, based in Tel
     > Aviv, Israel, was founded in 1993 and has about 5,000 employees.

Over the past decade, this medium-size company has grown sales and EPS at annualized rates of 4.9% and 7.5%, respectively. Lines are up, straight, and parallel (PTP mostly flat). Value Line (VL) gives an impressive Earnings Predictability score of 100.

Over the past decade, PTPM leads peer averages but trails the industry while decreasing from 53.6% to 37.9% (’24) with last-5-year mean of 41.8%. ROE leads peer and industry averages while increasing from 16.6% to 28.6% (’24) with last-5-year mean of 26.3%. Debt-to-Capital is less than peer and industry averages as it has no long-term debt (and only $6.3M annual rentals per VL).

Quick Ratio is 1.1 and Interest Coverage N/A (consistent with zero long-term debt) per M* who assigns “Narrow” Economic Moat and gives an A grade for Financial Health (per BI website). VL rates the company A+ for Financial Strength.

With regard to sales growth:

• YF gives YOY ACE 6.3% and 6.1% for ’25 and ’26, respectively (based on 34 analysts).
• Zacks gives YOY ACE 6.3% and 6.2% for ’25 and ’26, respectively (12 analysts).
• VL projects 6.4% annualized growth from ’24-’29.
• CFRA projects 6.4% YOY and 6.2% per year for ’25 and ’24-’26, respectively.
• M* gives 2-year ACE of 56.9%/year but projects 5.2%/year for next five years in Equity Report.

My 5.0% forecast is below the range.

With regard to EPS growth:

• MarketWatch projects 4.5% and 8.4% per year for ’24-’26 and ’24-’27, respectively (based on 38 analysts).
• Nasdaq.com gives ACE contraction of 9.1% YOY and 2.2%/year for ’26 and ’25-’27 (11/12/4 analysts for ’25/’26/’27).
• Seeking Alpha projects 4-year annualized growth of 6.4%.
• Argus projects 5-year annualized growth of 7.0%.
• Finviz gives ACE 5-year annualized growth of 8.2% (10).
• LSEG estimates LTG at 7.4%.
• YF gives YOY ACE 23.0% growth and 6.4% contraction for ’25 and ’26, respectively (35).
• Zacks gives YOY ACE 23.1% growth and 6.2% contraction for ’25 and ’26 (12) along with 5-year growth of 6.4%/year.
• VL projects 12.0% annualized growth from ’24-’29.
• CFRA projects growth of 23.3% YOY and 8.8% per year for ’25 and ’24-’26 along with 3-year CAGR of 9.0%.
• M* gives long-term growth ACE of 7.6% and projects 10.2%/year in Equity Report.

My 5.0% forecast is below the long-term estimate range (average of eight: 6.9%). Initial value is ’24 EPS of $7.46/share instead of 2025 Q3 EPS of $9.11 (TTM).

My Forecast High P/E is 21.0. Over the past 10 years, high P/E ranges from 21.5 in ’16 to 28.2 in ’24 with a last-5-year mean of 23.9 and a last-5-year-mean average P/E of 20.8 (excluding ’20 low P/E outlier of 13.4). I am below the range.

My Forecast Low P/E is 16.0. Over the past 10 years, low P/E ranges from 16.5 in ’23 (excluding 2020 outlier of 13.4) to 19.5 in ’24 with a last-5-year mean of 17.7. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) is $130.00. Default based on initial value given above ($119.40) seems extremely low at 35.8% less than previous close and 33.1% less than 52-week low. My arbitrary selection is 30.1% (27.2%) less, respectively.

These inputs land CHKP in the SELL zone with a U/D ratio of 0.2. Total Annualized Return (TAR) is 1.5%.

PAR (using Forecast Average—not High—P/E) of -1.1% is unthinkable for an investment candidtate. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR but even that is far below the risk-free rate (T-Bills).

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only 14 studies in the past 90 days (my study and 7 other outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 5.4%, 7.7%, 23.9, and 16.8, respectively. Although MS sample size precludes anything but anecdotal comparison, I am lower across the board. VL projects a future average annual P/E of 21.0 that is greater than MS (20.4) and greater than mine (18.5).†

MS high / low EPS are $12.28 / $8.35 versus my $9.52 / $7.46 (per share). My high EPS is less due to a lower growth rate an initial value. VL’s (M*) high EPS of $16.15 ($15.36) soars above both.

MS LSPF of $140.00 is about equal to the default $8.35/share * 16.8 = $140.28. MS LSPF is 7.7% higher than mine.

MOS is robust in the study because my inputs are near or below historical/analyst/MS averages/ranges. Also suggestive of this assessment are MS TAR exceeding mine by 7.2% per year and my lower LSPF.

With regard to valuation, PEG is 2.2 (2.8) and 3.9 per Zacks (M*) and my projected P/E, respectively: all overvalued. Relative Value [(current P/E) / 5-year-mean average P/E] is fair at 0.98 (M* agrees). Interestingly, the “Quick and Dirty DCF” says undervalued by 49%.

Per U/D, CHKP is a BUY under $147.50/share despite its recent close near 52-week lows. Given a forecast high price ~$200, BI TAR criterion would be met [199.9 / ((14.87 / 100 ) +1 ) ^ 5] ~ $100 (no dividend).

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

† — At 9.2, M* is outlandishly low by comparison. I will e-mail M* to inquire since I have also seen this with other stocks.

TMUS Stock Study (12-2-25)

I recently studied T-Mobile US Inc. (TMUS, $206.63).

M* writes:

     > Deutsche Telekom merged its T-Mobile USA unit with prepaid
     > specialist MetroPCS in 2013, and that firm merged with Sprint
     > in 2020, creating the second-largest wireless carrier in the US.
     > T-Mobile now serves 85 million postpaid and 26 million prepaid
     > phone customers, equal to around 30% of the US retail wireless
     > market. The firm entered the fixed-wireless broadband market
     > aggressively in 2021 and now serves 7 million residential and
     > business customers with its wireless network. It also serves
     > nearly 1 million fiber broadband customers through joint ventures
     > with fiber network owners. T-Mobile owns a stake in these firms,
     > which provide wholesale access to their networks. In addition,
     > T-Mobile provides wholesale services to wireless resellers.

Over the past decade, this mega-size ( > $50B revenue/year) company has grown sales and EPS at annualized rates of 12.4% and 17.0%, respectively. Lines are somewhat up, straight, and parallel except for sales dips in ’22 and ’23 and EPS declines in ’18, ’20, and ’22. Five- (10-) year R^2 is 0.73 (0.43) and Value Line (VL) gives an Earnings Predictability score of 75.

Over the past decade, PTPM trails peer and industry averages while increasing from 3.1% (’15) to 18.1% (’24) with last-5-year mean of 9.1%. ROE also trails peer and industry averages while ranging from 3.6% in ’22 to 22.0% in ’17 with a last-5-year mean of 8.5%. Debt-to-Capital is less than peer and industry averages despite increasing from 58.5% in ’15 to 64.9% in ’24 with a last-5-year mean of 62.7%.

Quick Ratio is 0.53 and Interest Coverage 5.3 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 Financial Strength rating of A.

With regard to sales growth:

• YF gives YOY ACE 8.3% and 7.2% for ’25 and ’26, respectively (based on 26 analysts).
• Zacks gives YOY ACE 7.7% and 6.6% for ’25 and ’26, respectively (7 analysts).
• VL projects 6.3% annualized growth from ’24-’29.
• CFRA projects YOY 6.5% and 5.9% per year for ’25 and ’24-’26, respectively.
• M* gives 2-year ACE of 8.0% growth/year and projects long-term growth of 6.0% (Equity Report).

My 5.0% forecast is below the range.

With regard to EPS growth:

• MarketWatch projects 16.6% and 16.8% per year for ’24-’26 and ’24-’27, respectively (based on 31 analysts).
• Nasdaq.com gives ACE 16.6% and 15.2% per year for ’25-’27 and ’25-’28 [ 8 / 6 / 1 analyst(s) for ’25 / ’27 / ’28].
• Seeking Alpha projects 4-year annualized growth of 15.1%.
• Argus projects 5-year annualized growth of 10.0% (July report).
• Finviz gives 5-year annualized growth of 15.1% (11).
• LSEG estimates LTG at 15.4%.
• YF gives YOY ACE of 8.4% and 15.8% for ’25 and ’26, respectively (25).
• Zacks gives YOY ACE of 4.6% and 14.0% for ’25 and ’26, and 5-year annualized growth of 15.2% (7).
• VL projects 15.8% annualized growth from ’24-’29.
• CFRA gives ACE of 12.5% YOY and 15.2% per year for ’25 and ’24-’26 along with 3-year CAGR of 16.0%.
• M* gives long-term ACE equal to Equity Report of 21.8% (puzzling).

My 9.0% forecast is below the long-term estimate range (mean of seven not including M* duplicate: 15.5%). Initial value is ’24 EPS of $9.66/share instead of 2025 Q3 $10.39 (TTM).

My Forecast High P/E is 21.0. Over the past 10 years, high P/E ranges from 13.2 in ’17 to 74.9 in ’22 with a last-5-year mean of 48.6 and a last-5-year-mean average P/E of 39.8. I am less than all but ’17.

My Forecast Low P/E is 15.0. Over the past 10 years, low P/E ranges from 10.5 in ’17 to 49.3 in ’22 with a last-5-year mean of 31.0. I am forecasting below all but ’17.

My Low Stock Price Forecast (LSPF) of $144.90 is default based on initial value given above. This is 29.9% less than the previous close and 27.3% less than the 52-week low.

Over the past decade, Payout Ratio (PR) ranges from 27.3% in ’20 to 60.8% in ’19 with a last-5-year mean of 45.6%. I am forecasting below the range at 27.0%.

These inputs land TMUS in the HOLD zone with a U/D ratio of 1.0. Total Annualized Return (TAR) is 9.0%.

Since 2023 inception, Payout Ratio (PR) increases from 9.4% to 29.3%. I am forecasting below the range at 9.0%.

PAR (using Forecast Average—not High—P/E) of 5.8% is less than I seek for a mega-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 only 39 studies in the past 90 days (my study and 18 other outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 6.6%, 15.5%, 24.0, 17.2, and 19.3%, respectively. I am lower across the board. VL (M*) projects a future average annual P/E of 21.0 (8.0, which is a bit of a head-scratcher) that is greater than MS (20.7) and greater than mine (18.0).

MS high / low EPS are $21.18 / $10.24 versus my $14.86 / $9.66 (per share). My high EPS is less due mainly to a lower growth rate. VL’s (M*) high EPS of $20.15 ($25.91) is in the middle (soars above both).

MS LSPF of $175.00 implies a Forecast Low P/E of 17.1: almost equal to the above-stated 17.2. My LSPF is 17.2% less.

MOS is robust in the study because my inputs are near or below historical/analyst/MS averages/ranges (head-scratcher aside). Also backing this assessment are MS TAR exceeding mine by 4.8% per year and my significantly lower LSPF.

With regard to valuation, PEG is 1.3 and 2.0 per Zacks and my projected P/E: fairly valued (M* indicates undervalued at 0.63). Relative Value [(current P/E) / 5-year-mean average P/E] is quite low at 0.50. M* has stock undervalued by 21%.

Per U/D, TMUS is a BUY under $153/share. BI TAR criterion would be met [312.1 / ((13.87 / 100 ) +1 ) ^ 5] ~ $158.00 given a forecast high price ~$312.

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

IPAR Stock Study (12-1-25)

I recently studied Inter Parfums Inc. (IPAR, $81.27). The previous study is here.

M* writes:

     > Inter Parfums Inc operates in the fragrance business and produces
     > and distributes a wide array of prestige fragrance and fragrance-
     > related products. It sells its product under the brand which includes
     > Boucheron, Coach, Jimmy Choo, Karl Lagerfeld, Kate Spade, Lacoste,
     > Lanvin, Moncler, Montblanc, Rochas and Van Cleef & Arpels. The
     > company operates in two operating segments namely European based
     > operations, SA, and United States based operations. The group sells
     > its products to department stores, perfumeries, specialty stores,
     > and domestic and international wholesalers and distributors.

Over the past decade, this medium-size company has grown sales and EPS at annualized rates of 13.0% and 21.0%, respectively. Lines are mostly up, straight, and parallel except for a sales+EPS decline in ’20 (COVID-19). Five- (10-) year R^2 is 0.86 (0.87) and Value Line (VL) gives an Earnings Predictability score of 60.

Over the past decade, PTPM leads peer averages but trails the industry while increasing from 12.9% (’15) to 18.9% (’24) with last-5-year mean of 17.1%. ROE increases from 8.1% (’15) to 21.1% (’24) with last-5-year mean of 17.4%. Debt-to-Capital is less than peer and industry averages while ranging from 8.7% in ’20 to 25.4% in ’22 with a last-5-year mean of 20.1%.

Quick Ratio is 1.9 and Interest Coverage 36 per M* who assigns “Narrow” [quantitative] Economic Moat and gives a B grade for Financial Health (per BI website). VL rates the company B++ for Financial Strength.

With regard to sales growth:

• YF gives YOY ACE 1.2% and 0.9% for ’25 and ’26, respectively (based on 4 analysts).
• Zacks gives YOY ACE 1.2% and 0.5% for ’25 and ’26, respectively (2 analysts).
• VL projects 2.9% annualized growth from ’24-’29.
• CFRA gives ACE YOY 1.2% and 1.0% per year for ’25 and ’24-’26, respectively (4).
• M* gives 2-year ACE of 0.7% growth/year.

My flat forecast is below the range.

With regard to EPS growth:

• MarketWatch projects 6.9% per year each for ’24-’26 and ’24-’27, respectively (based on 5 analysts).
• Nasdaq.com gives ACE contraction of 5.9% YOY and 0.4% per year for ’26 and ’25-’27 [2/2/1 analyst(s) for ’25/’26/’27].
• Seeking Alpha projects 4-year annualized growth of 13.8%.
• Finviz gives 5-year annualized growth of 2.4% (1).
• LSEG estimates LTG at 8.9%.
• YF gives YOY ACE contraction of 1.8% and 5.4% for ’25 and ’26, respectively (4).
• Zacks gives YOY ACE contraction of 1.7% and 5.9% for ’25 and ’26, respectively (2).
• VL projects 2.8% annualized growth from ’24-’29.
• CFRA gives ACE of 0.0% YOY and 2.8% contraction per year for ’25 and ’24-’26, respectively (4).

My 2.0% per year forecast is below the long-term estimate range (average of four: 7.0%). Initial value is ’24 EPS of $5.12/share.

My Forecast High P/E is 28.0. Over the past 10 years, high P/E ranges from 28.7 in ’22 to 42.8 in ’19 (excluding upside outlier of 62.0 in ’20) with a last-5-year mean of 33.1 and a last-5-year-mean average P/E of 27.3. I am below the 10-year range.

My Forecast Low P/E is 12.0. Over the past 10 years, low P/E ranges from 17.1 in ’22 to 30.8 in ’19 with a last-5-year mean of 21.6. I am forecasting far below the range.

My Low Stock Price Forecast (LSPF) of $61.40 is default based on initial value given above. This is 24.4% less than the previous close and 20.5% less than the 52-week low.

Over the past decade, Payout Ratio (PR) ranges from 27.3% in ’20 to 60.8% in ’19 with a last-5-year mean of 45.6%. I am forecasting below the range at 27.0%.

These inputs land IPAR in the BUY zone with a U/D ratio of 3.9. Total Annualized Return (TAR) is 15.2%.

PAR (using Forecast Average—not High—P/E) of 8.2% 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 only 49 studies in the past 90 days (my study and 26 other outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 5.3%, 7.9%, 29.9, 19.9, and 46.0%, respectively. I am lower across the board. VL projects a future average annual P/E of 23.5 that is less than MS (24.9) and greater than mine (20.0).

MS high / low EPS are $7.43 / $4.94 versus my $5.65 / $5.12 (per share). My high EPS is less due to a lower growth rate. VL’s high EPS of $5.95 is in the middle.

MS LSPF of $80.00 implies a Forecast Low P/E of 16.2: less than the above-stated 19.9. MS LSPF is 18.6% less than the default $4.94/share * 19.9 = $98.31 (INVALID on today’s date) resulting in more conservative zoning. MS LSPF is still 30.3% higher than mine, though.

MOS is robust in the study because my inputs are near or below historical/analyst/MS averages/ranges. I am discounting growth rates to [near] zero [N.B. thereby excluding IPAR from the “quality growth stock” category]. Also backing this assessment are MS TAR exceeding mine by 5.7% per year and my significantly lower LSPF.

With regard to valuation, PEG is 0.41 and 7.8 (low growth rate) per M* and my projected P/E, respectively: in wild disagreement. Relative Value [(current P/E) / 5-year-mean average P/E] is quite low at 0.58. M* says undervalued by 21%.

Per U/D, IPAR is a BUY under $85.60/share. BI TAR criterion would be met [158.3 / ((13.87 / 100 ) +1 ) ^ 5] ~ $82.70 given a forecast high price ~$158.

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

TASK Stock Study (12-1-25)

I recently did a stock study on TaskUs, Inc. (TASK, $11.37).

M* writes:

     > TaskUs Inc is a provider of outsourced digital services and
     > next-generation customer experience to the world-wide Game-
     > changing companies, helping its clients represent, protect
     > and grow their brands. It serves clients in the fastest-
     > growing sectors, including social media, e-commerce,
     > gaming, streaming media, food delivery and ridesharing,
     > HiTech, FinTech and HealthTech.

Since 2020 (’21, when public trading begins, excluded from full analysis due to negative earnings), this small-size company has grown sales and earnings at annualized rates of 20.1% and 9.6%, respectively. Lines are mostly up, straight, and parallel except for sales dip in ’23. Data is very scant but the encouraging first four years and steep stock selloff gets me interested.

Over the past decade, PTPM leads peer and industry averages while ranging from 6.7% in ’22 to 9.3% in ’20 with a last-5-year mean of 7.9%. ROE averages 9.2% from ’22-’24. Debt-to-Equity is less than peer and industry averages while averaging 42.5% from ’22-’24.

Quick Ratio is 2.6 and Interest Coverage 7.2 per M* who gives a C grade for Financial Health (BI website). Value Line (VL) gives a B rating for Financial Strength.

With regard to sales growth:

• YF gives YOY ACE 18.0% and 7.9% for ’25 and ’26, respectively (based on 7 analysts).
• Zacks gives YOY ACE 18.1% and 9.0% for ’25 and ’26, respectively (3 analysts).
• CFRA gives ACE 18.0% YOY and 12.8% per year for ’25 and ’24-’26, respectively (7).
• M* gives 2-year annualized ACE of 11.5%.

My 4.0% forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE 9.4% and 11.5%/year for ’24-’26 and ’24-’27, respectively (based on 7 analysts).
• Nasdaq.com gives ACE 7.8% YOY and 6.7%/year for ’26 and ’25-’27 (3 / 3 / 2 analysts for ’25, ’26, and ’27).
• Finviz gives ACE 5-year annualized growth of 10.6% (4).
• YF gives YOY ACE 21.6% and 0.8% for ’25 and ’26, respectively (7).
• Zacks gives YOY ACE 15.5% and 9.4% for ’25 and ’26, respectively (3).
• VL gives ACE 45.2% annualized growth from ’24 through ’26-’27.
• CFRA gives ACE 214% YOY and 77.8% per year for ’25 and ’24-’26, respectively (7).

My 7.0% forecast is below the 2-longer-term-estimate range (10.6% lowest). Initial value is ’24 EPS of $0.50/share rather than 2025 Q3 EPS of $0.89 (TTM).

My Forecast High P/E is 30.0. Over the past three years, high P/E declines from 143 to 39.2 with a mean of 76.1 and a mean average P/E of 50.2. I am below the range.

My Forecast Low P/E is 16.0. Over the past three years, low P/E ranges from 16.6 (’23) to 34.9 (’22) with a mean of 24.2. I am forecasting below the range.

My Low Stock Price Forecast of $8.00 is default based on initial value given above. This is 29.6% less than the previous close and 25.2% less than the 52-week low.

These inputs land TASK in the HOLD zone with a U/D ratio of 2.9. Total Annualized Return (TAR) is 13.2%.

PAR (using Forecast Average—not High—P/E) of 7.3% is less than I seek in a small-size company. If a healthy margin of safety (MOS) anchors the study, then I can focus on TAR instead.

To assess MOS, I normally start by comparing my inputs with those of Member Sentiment (MS). With just one other study in the last 90 days, that is a non-starter.

I feel like MOS is at least moderate if not robust because my inputs are near or below historical/analyst averages/ranges but I only have one other estimate for comparison and a very brief trading history.

With regard to valuation, PEG is 1.73 and 1.7 per M* and my projected P/E, respectively. That is about fairly valued [and in agreement]. Relative Value [(current P/E) / 5-year-mean average P/E] is dirt cheap at 0.25 but I don’t really know if the stock has settled into what the market will find its appropriate multiple.

At this point, the stock is truly one for speculative consideration only.

Per U/D, TASK is a BUY under $11.30/share. BI TAR criterion would be met [21.0 / ((14.87 / 100 ) +1 ) ^ 5] = $10.50 given a forecast high price $21 (no dividend).

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

NICE Stock Study (12-1-25)

I recently did a stock study on Nice Ltd. ADR (NICE, $106.07). Previous studies are here, here, and here.

M* writes:

     > Nice is an enterprise software company that serves the customer
     > engagement and financial crime and compliance markets. Software
     > is deployed primarily on the cloud, but also on premises. Within
     > customer engagement, Nice’s CXone is the leading CCaaS platform
     > providing solutions such as call routing, interactive voice
     > response, digital self-service, and workforce engagement
     > management. Within financial crime and compliance, Nice
     > offers risk and investigation management, fraud prevention,
     > anti-money-laundering, and compliance solutions.

Over the past decade, this medium-size company has grown sales and EPS 12.2% and 12.6% per year, respectively. Lines are mostly up, straight, and parallel except for an EPS dip in ’16. 10-year EPS R^2 is 0.87 and Value Line (VL) gives an Earnings Predictability score of 100.

Over the past decade, PTPM leads peer and industry averages while ranging from 9.7% in ’17 to 22.1% in ’24 with a last-5-year mean of 16.8%. ROE leads peer and industry averages while ranging from 6.9% in ’21 to 12.0% in ’24 with a last-5-year mean of 9.0%. Debt-to-Capital is much lower than peer and industry averages with a last-5-year mean of 20.3% (no LT debt).

Quick Ratio is 1.2 and Interest Coverage NMF per M* who assigns “Narrow” Economic Moat, gives an “Exemplary” rating for Capital Allocation, and a Financial Health grade of B (per BI website). VL gives an A rating for Financial Strength.

With regard to sales growth:

• YF gives YOY ACE 7.4% and 8.2% for ’25 and ’26, respectively (based on 16 analysts).
• Zacks gives YOY ACE 7.4% and 8.2% for ’25 and ’26, respectively (5 analysts).
• VL projects 8.4% annualized growth from ’24-’29.
• CFRA projects 7.5% YOY and 7.7% per year for ’25 and ’24-’26, respectively.
• M* gives a 2-year ACE of 7.7% per year and projects 5-year annualized growth of 9.8% (Equity Report).

My 6.0% forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE 0.2% and 4.2% per year for ’24-’26 and ’24-’27, respectively (based on 19 analysts).
• Nasdaq.com gives ACE 5.8% and 9.5% per year for ’25-’27 and ’25-’28 (8, 3, and 2 analysts for ’25, ’27, and ’28).
• Seeking Alpha projects 4-year annualized growth of 8.8%.
• Finviz gives ACE 5-year annualized growth of 4.0% (3).
• LSEG estimates LTG at 11.6%.
• YF gives YOY ACE 10.3% growth and 9.3% contraction for ’25 and ’26, respectively (17).
• Zacks gives YOY ACE 10.4% growth and 5.2% contraction for ’25 and ’26 along with 5-year growth of 7.2%/year (9).
• VL projects 9.6% annualized growth from ’24-’29.
• CFRA projects growth of 10.2% YOY and 1.4% per year for ’25 and ’24-’26 along with a 3-year CAGR of 6.0%.
• M* gives long-term annualized growth ACE of 10.8% and projects 10.3%/year for 5 years (Equity Report).

My 4.0% forecast is near bottom of the long-term-estimate range (mean of seven: 8.9%). Initial value is ’24 EPS of $6.76/share rather than 2025 Q2 $8.80 (TTM).

My Forecast High P/E is 29.0. Over the past 10 years, high P/E ranges from 29.9 in ’15 to 76.5 in ’22 (excluding 96.9 and 107 in ’20 and ’21, respectively) with a last-5-year mean of 54.0 and 5-year-mean average P/E of 43.2 (excluding ’21 low P/E of 70.9). I am below the range.

My Forecast Low P/E is 11.0. Over the past 10 years, low P/E ranges from 20.9 in ’15 to 41.2 in ’22 (excluding 70.9 in ’21) with a last-5-year mean of 32.5. I am forecasting far below the range.

My Low Stock Price Forecast (LSPF) of $74.40 is default based on initial value given above. This is 29.9% and 24.8% less than the previous close and 52-week low, respectively.

Payout Ratio decreases from 53.9% in ’13 to zero in ’18 where it has remained ever since. I will not forecast a dividend until/unless payment is reinstituted.

These inputs land NICE in the BUY zone with a U/D ratio of 4.2. Total Annualized Return (TAR) is 17.6%.

PAR (using Forecast Average—not High—P/E) of 9.2% 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 194 studies done in the past 90 days (my study and 59 outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 8.0%, 10.5%, 28.0, and 16.0, respectively. I am lower on all but Forecast High P/E (29.0). VL projects a future average annual P/E of 13.0 that is much less than MS (22.0) and mine (20.0).

MS high / low EPS are $13.33 / $7.91 versus my $8.22 / $6.76 (per share). My high EPS is less due to a lower growth rate and initial value. VL’s high EPS of $17.60 soars above both and M* $11.05 is in the middle.

MS LSPF of $108.50 (INVALID on today’s date) implies a Forecast Low P/E of 13.7 versus the above-stated 16.0. MS LSPF is 14.3% less than the default $7.91/share * 16.0 = $126.56, which results in more conservative zoning. MS LSPF is 45.8% greater than mine, however.

MOS is robust in the study because my inputs are near or below historical/analyst/MS averages/ranges. Also backing this assessment are MS TAR exceeding mine by 5.6% per year and my significantly lower LSPF.

With regard to valuation, PEG is 1.2 and 2.9 per Zacks and my projected P/E: overvalued (M* suggests significantly undervalued at 0.52). Relative Value [(current P/E) / 5-year-mean average P/E] is dirt cheap at 0.23. “Quick and dirty DCF” says undervalued by 59% (44% per M*).

Per U/D, NICE is a BUY under $115/share. BI TAR criterion would be met [238.4 / ((14.87 / 100 ) +1 ) ^ 5] ~ $119 given a forecast high price ~$238 (no dividend).

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

BR Stock Study (11-28-25)

I recently did a stock study on Broadridge Financial (BR, $227.59).

M* writes:

     > Broadridge Financial Solutions, which was spun off from
     > Automatic Data Processing in 2007, is a leading provider
     > of investor communication and technology-driven solutions
     > to banks, broker/dealers, traditional and alternative-asset
     > managers, wealth managers, and corporate issuers. Broadridge
     > is composed of two operating segments: investor communication
     > solutions and global technology and operations.

Over the past decade, this medium-size company has grown sales and earnings at annualized rates of 8.6% and 11.0%, respectively (FY ends Jun 30). Lines are mostly up, straight, and parallel except for EPS dips in ’20 and ’22. Value Line (VL) gives an Earnings Predictability score of 100.

Over the past decade, PTPM leads peer and industry averages while ranging from 11.8% (’17 and ’22) to 39.9% (in ’24) with a last-5-year mean of 37.3%. ROE also leads peer and industry averages while ranging from 29.3% in ’22 to 37.8% in ’20 with a last-5-year mean of 31.9%. Debt-to-Equity is greater than peer and industry averages while increasing from 49.4% (’16) to 56.6% (’25) with a last-5-year mean of 63.7%.

Quick Ratio is 0.80 and Interest Coverage 10 (13) per M* (VL) who assigns “Wide” Economic Moat, gives “Standard” rating for Capital Allocation, and an A grade for Financial Health (BI website). VL gives a B++ Financial Strength rating.

With regard to sales growth:

• YF gives YOY ACE 5.5% and 4.9% for ’26 and ’27, respectively (based on 9 analysts).
• Zacks gives YOY ACE 5.2% and 4.6% for ’26 and ’27, respectively (4 analysts).
• VL projects 4.6% annualized growth from ’25-’29.
• CFRA projects 6.3% YOY and 5.7% per year for ’26 and ’25-’27, respectively.
• M* gives 2-year annualized ACE of 5.5% and projects 5.9%/year from ’25-’30 (Equity Report).

My 4.0% forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE 9.8% and 10.0%/year for ’25-’27 and ’25-’28, respectively (based on 11 analysts).
• Nasdaq.com gives ACE 8.7% YOY and 8.8%/year for ’27 and ’26-’28 (4 analysts each for ’26, ’27, and ’28).
• Seeking Alpha projects 4-year annualized growth of 8.0%.
• Finviz gives ACE 5-year annualized growth of 9.7% (3).
• YF gives YOY ACE 10.5% and 8.7% for ’26 and ’27, respectively (9).
• Zacks gives YOY ACE 9.7% and 8.7% for ’26 and ’27, respectively (4).
• VL projects 9.5% annualized growth from ’25-’29.
• CFRA projects 11.0% YOY and 9.4% per year for ’26 and ’25-’27 along with a 3-year CAGR of 10.0%.
• M* gives long-term annualized ACE of 13.3% and projects 13.3%/year from ’25-’30 (Equity Report).

My 7.0% forecast is below the long-term-estimate range (mean of four: 10.1%; M* only included once as I’d expect its analyst estimate and ACE to differ). Initial value is ’25 EPS of $7.10/share rather than 2026 Q1 EPS of $7.81 (TTM).

My Forecast High P/E is 28.0. Over the past 10 years, high P/E increases from 26.1 (’16) to 34.8 (’25) with a last-5-year mean of 36.4 and a last-5-year-mean average P/E of 31.8. I am near bottom of the range (only ’16 is less).

My Forecast Low P/E is 20.0. Over the past 10 years, low P/E increases from 19.2 (’16) to 27.7 (’25) with a last-5-year mean of 27.2. I am forecasting near bottom of the range (only ’16 is less).

My Low Stock Price Forecast (LSPF) is $158.00. Default ($142.00) based on initial value seems unreasonably low at 37.6% and 33.1% less than the previous close and 52-week low. My [arbitrary] selection is 30.6% and 25.6% less, respectively.

Over the past 10 years, Payout Ratio (PR) ranges from 41.0% in ’18 to 56.3% in ’22 with a last-5-year mean of 52.9%. I am forecasting below the range at 40.0%.

These inputs land BR in the HOLD zone with a U/D ratio of 0.7. Total Annualized Return (TAR) is 5.5%.

PAR (using Forecast Average—not High—P/E) of 2.6% is less than the current risk-free rate (T-bills). If a healthy margin of safety (MOS) anchors this study, then I can focus on TAR albeit still less than I seek in a medium-size company.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only 21 studies done in the past 90 days (12 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 5.5%, 11.3%, 34.4, 26.2, and 52.9%. I am lower across the board. VL projects a future average annual P/E of 24.0: less than MS (30.3) and equal to mine [M* is a head-scratcher at 15.7].

MS high / low EPS are $12.62 / $7.09 versus my $9.96 / $7.10 (per share). My high EPS is less due to a lower growth rate. VL’s $12.30 high EPS is in the middle while M* $13.23 (lower of regular and adjusted) is highest.

MS LSPF of $188.80 implies a Forecast Low P/E of 26.6 versus the above-stated 26.2. MS LSPF is 1.6% greater than the default $7.09/share * 26.2 = $185.76, which results in more aggressive zoning. MS LSPF is also 19.5% greater than mine.

MOS is robust in the study because my inputs are near or below historical/analyst averages/ranges [head-scratcher aside]. Also backing this assessment are MS TAR exceeding mine by 9.5% per year and my significantly lower LSPF.

With regard to [the conflicting realm of] valuation, PEG is 2.1 and 3.9 per M* and my projected P/E: overvalued. Relative Value [(current P/E) / 5-year-mean average P/E] is slightly low at 0.92. “Quick and dirty DCF” says overvalued by 28%, CFRA says overvalued by 9% (with a 4-star stock rating), and M* says undervalued by 21% (with a 5-star stock rating).

Per U/D, BR is a BUY under $188/share. BI TAR criterion would be met [278.9 / ((13.47 / 100 ) +1 ) ^ 5] ~ $148 given a forecast high price ~$279.

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

MCD Stock Study (11-26-25)

I recently did a stock study on McDonald’s Corp. (MCD, $310.45).

M* writes:

     > McDonald’s is the largest restaurant owner-operator in the world,
     > with 2024 system sales of $131 billion across more than 43,000
     > stores and 115 markets. McDonald’s pioneered the franchise model,
     > building its footprint through partnerships with independent
     > restaurant franchisees and master franchise partners around the
     > globe. The firm earns roughly 60% of its revenue from franchise
     > royalty fees and lease payments, with most of the remainder
     > coming from company-operated stores across its three core
     > segments: the United States, internationally operated markets,
     > and international developmental/licensed markets.

Over the past decade, this large-size company has grown sales and earnings at annualized rates of 0.4% and 9.5%, respectively. Sales drop in four of five years through ’20 then climb in three of four years since. EPS declines in ’20, ’22, and dip in ’24. As a result, lines are converging, somewhat straight, and parallel especially since ’19. Five- (10-) year EPS R^2 is 0.68 (0.84) and Value Line (VL) gives an Earnings Predictability score of 85.

Over the past decade, PTPM leads peer and industry averages while climbing from 25.8% (’15) to 39.9% (’24) with a last-5-year mean of 37.3%. ROE lags peer and industry averages with a last-5-year mean of -122%. Debt-to-Equity is less than the industry but greater than peers while increasing from 77.3% to 108% with a last-5-year mean of 112%.

Quick Ratio is 0.82 and Interest Coverage 7.9 per M* (9.2 per VL) who assigns “Wide” Economic Moat, gives “Standard” rating for Capital Allocation, and an A grade for Financial Health (BI website). VL gives an A++ Financial Strength grade.

With regard to sales growth:

• YF gives YOY ACE 2.9% and 5.8% for ’25 and ’26, respectively (based on 32 analysts).
• Zacks gives YOY ACE 2.9% and 5.7% for ’25 and ’26, respectively (10 analysts).
• VL projects 5.9% annualized growth from ’24-’29.
• CFRA projects 2.8% YOY and 4.0% per year for ’25 and ’24-’26, respectively.
• M* gives 2-year annualized ACE of 4.2% and projects 5.9%/year from ’24-’29 (Equity Report).

My 2.0% forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE 6.5% and 6.8%/year for ’24-’26 and ’24-’27, respectively (based on 40 analysts).
• Nasdaq.com gives ACE 9.3% and 9.8%/year for ’25-’27 and ’25-’28 [12 / 5 / 1 analyst(s) for ’25 / ’27 / ’28].
• Seeking Alpha projects 4-year annualized growth of 7.1%.
• Finviz gives ACE 5-year annualized growth of 7.0% (9).
• Argus projects 5-year annualized growth of 8.0%.
• LSEG gives LTG estimate of 7.1%.
• YF gives YOY ACE 3.5% and 9.0% for ’25 and ’26, respectively (38).
• Zacks gives YOY ACE 3.3% and 9.6% for ’25 and ’26 along with 5-year annualized growth of 7.4% (12).
• VL projects 9.6% annualized growth from ’24-’29.
• CFRA projects 3.5% YOY and 6.7% per year for ’25 and ’24-’26, respectively, along with a 3-year CAGR of 2.0%.
• M* gives long-term annualized ACE of 9.2% and projects 8.9%/year from ’24-’29 (Equity Report).

My 6.0% forecast is below the long-term-estimate range (mean of eight: 8.0%). Initial value is ’24 EPS of $11.39/share rather than 2025 Q3 EPS of $11.72 (TTM).

My Forecast High P/E is 24.0. Over the past 10 years, high P/E ranges from 24.3 in ’16 to 36.8 in ’20 with a last-5-year mean of 30.2 and a last-5-year-mean average P/E of 25.9. I am below the range.

My Forecast Low P/E is 18.0. Over the past 10 years, low P/E increases from 18.2 (’15) to 21.4 (’24) with a last-5-year mean of 21.6. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) is $220.00. Default ($205.00) based on initial value seems unreasonably low at 34.0% and 25.9% less than the previous close and 52-week low. My [arbitrary] selection is 29.1% and 20.4% less, respectively.

Over the past 10 years, Payout Ratio (PR) ranges from 52.3% in ’21 to 60.0% in ’19 with a last-5-year mean of 62.7%. I am forecasting below the range at 52.0%.

These inputs land MCD in the HOLD zone with a U/D ratio of 0.6. Total Annualized Return (TAR) is 5.5%.

PAR (using Forecast Average–not High–P/E) of 3.1% is less than the current risk-free rate (T-bills). If a healthy margin of safety (MOS) anchors this study, then I can focus on TAR albeit still less than I seek in a large-size company.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 39 studies done in the past 90 days (20 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 4.3%, 8.8%, 27.9, 21.4, and 62.7%. I am lower across the board. VL projects a future average annual P/E of 24.5: less than MS (24.7) but greater than mine (21.0) [M* is a head-scratcher at 15.9].

MS high / low EPS are $17.75 / $11.36 versus my $15.24 / $11.39 (per share). My high EPS is less due to a lower growth rate. VL’s $18.50 high EPS soars above both along with M* $19.51.

MS LSPF of $240.80 implies a Forecast Low P/E of 21.2 versus the above-stated 21.4. MS LSPF is 1.0% less than the default $11.36/share * 21.4 = $243.10, which results in more conservative zoning. MS LSPF is 9.5% greater than mine, however.

MOS is robust in the study because my inputs are near or below historical/analyst averages/ranges.† Also backing this assessment are MS TAR exceeding mine by 6.9% per year and my lower LSPF.

With regard to valuation, PEG is 3.4 and 4.2 per Zacks and my projected P/E: quite overvalued (2.2 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is fair at 1.02.

Per U/D, MCD is a BUY under $220/share. BI TAR criterion would be met [365.8 / ((12.67 / 100 ) +1 ) ^ 5] ~ $201 given a forecast high price ~$366.

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

† — Head-scratcher aside.

HEI Stock Study (11-25-25)

I recently did a stock study on HEICO Corp. (HEI, $305.98). Previous studies are here, here, here, and here.

M* writes:

     > Heico is an aerospace and defense supplier that focuses on creating
     > replacement parts for commercial aircraft and components for defense
     > products. In commercial aerospace, Heico is the largest independent
     > producer of replacement aircraft parts, primarily for engines. In the
     > defense market, the company produces niche subcomponents used in
     > targeting technology as well as simulation equipment, among other
     > categories. It operates as two segments: the flight support group…
     > and the electronic technologies group… both of which supply the
     > aerospace and defense sectors to different degrees. The company is
     > persistently acquisitive, focusing on companies in similar or adjacent
     > markets that offer strong cash flow and profitable growth potential.

Over the past 10 years, this medium-size company has grown sales and EPS at annualized rates of 11.4% and 13.2%, respectively. Lines are mostly up, straight, and parallel with a slight dip in ’20 [and ’21 for EPS] due to COVID. Five-year EPS R^2 is 0.85 and Value Line (VL) gives an Earnings Predictability score of 85.

Over the past decade, PTPM leads industry and peer averages by ranging from 17.6% in ’24 to 22.2% in ’22 with a last-5-year mean of 19.9%. ROE leads peers and lags the industry while declining from 17.0% (’15) to 14.4% (’24) with a last-5-year mean of 14.4%. Debt-to-Capital is less than peer and industry averages while ranging from 10.0% in ’21 to 44.3% in ’23 with a last-5-year mean of 26.1%.

Quick Ratio is 1.4 and Interest Coverage is 7.3 per M* who assigns “Narrow” Economic Moat, gives “Standard” rating for Capital Allocation, and an A grade for Financial Health (per BI website). VL gives an A+ grade for Financial Strength.

With regard to sales growth:

• YF gives YOY ACE 15.1% and 9.9% for ’25 and ’26, respectively (based on 19 analysts).
• Zacks gives YOY ACE 14.8% and 10.2% for ’25 and ’26, respectively (6 analysts).
• VL projects 10.0% annualized growth from ’24-’29.
• CFRA projects 12.7% and 11.3% per year for ’24-’26 and ’24-’27, respectively.
• M* offers a 2-year ACE estimate of 13.3% per year and projects 10.8%/year x5 (per Equity Report).

My 9.0% forecast is below the range.

With regard to EPS growth:

• MarketWatch projects 15.6% and 13.3% per year for ’24-’26 and ’24-’27, respectively (based on 22 analysts).
• Nasdaq.com projects 12.0% YOY and 13.0% per year for ’26 and ’25-’27 (9, 9, and 3 analysts for ’25, ’26, and ’27).
• Seeking Alpha projects 4-year annualized growth of 15.7%.
• Finviz gives ACE 5-year annualized growth of 17.5% (10).
• LSEG estimates LTG at 19.7%.
• YF gives YOY ACE 30.1% and 12.1% for ’25 and ’26, respectively (17).
• Zacks gives YOY ACE 29.2% and 12.0% for ’25 and ’26 along with 5-year annualized growth of 18.9% (9).
• VL projects annualized growth of 14.1% from ’24-’29.
• CFRA projects 22.6% and 19.7% per year for ’24-’26 and ’24-’27, respectively, along with a 3-year CAGR of 20.0%.
• M* projects long-term annualized growth of 21.7%.

My 14.0% forecast is below the long-term-estimate range (mean of six: 17.9%). Initial value is ’24 EPS of $3.67/share rather than 2025 Q3 EPS of $4.57 (TTM).

My Forecast High P/E is 45.0. Over the past decade, high P/E increases from 32.3 (’15) to 73.4 (’24) with a last-5-year mean of 65.4 and last-5-year-mean average P/E of 54.2. I am above my comfort zone on this one.

My Forecast Low P/E is 29.0. Over the past decade, low P/E increases from 24.0 (’15) to 43.5 (’24) with a last-5-year mean of 43.0. My forecast is just below the 10-year median (29.8).

My Low Stock Price Forecast (LSPF) is $210.00. Default based on initial value given above seems unreasonably low at $106.40: 65.2% less than previous closing price and 50.9% less than the 52-week low. My [arbitrary] selection is 31.4% and 3.1% less, respectively.

Over the past decade, Payout Ratio (PR) ranges from 5.7% (’17 and ’24) to 7.7% (’21) with a last-5-year mean of 6.9%. I am forecasting below the range at 5.0%.

These inputs leave HEI in the SELL zone with a U/D ratio of 0.1. Total Annualized Return (TAR) is 0.9%.

PAR (using Forecast Average—not High—P/E) of -3.0% is unthinkable for an investment prospect. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR but even that is much less than the current risk-free rate (T-bills).

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only 25 studies done in the past 90 days (my study and 10 other outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 11.5%, 15.0%, 58.3, 40.1, and 6.8%, respectively. I am lower across the board. VL projects a future average annual P/E of 45.0 that is less than MS (49.2) and greater than mine (37.0).

MS high / low EPS are $8.73 / $4.12 versus my $7.07 / $3.67 (per share). My high EPS is less due to growth rate and initial value. VL’s high EPS of $7.10 is about equal to mine.

MS LSPF of $191.40 implies a Forecast Low P/E of 46.5 versus the above-stated 40.1. MS LSPF is 15.9% greater than the default $4.12/share * 40.1 = $165.21, which results in more aggressive zoning. MS LSPF is 8.9% less than mine, however.

MOS is robust in the current study because my inputs are less than or near respective analyst/historical ranges and MS averages. Although my LSPF is higher, MS TAR is 8.7%/year greater than mine to further support the assessment.

With regard to valuation, PEG is 3.0, 5.1, and 4.2 per Zacks, M*, and my projected P/E, respectively: significantly overvalued. Relative Value [(current P/E) / 5-year-mean average P/E] is also expensive at 1.24.

I would not buy at current levels but existing shareholders may want to hold due to double-digit sales growth [projections]. This is one of the best growth stories around and except to say “nothing continues forever,” I see no signs of any slowdown.

Per U/D, HEI is a BUY under $237/share. BI TAR criterion is met [318 / ((14.77 / 100 ) +1 ) ^ 5] ~ $160 with a forecast high price ~$318.

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

KNSL Stock Study (11-24-25)

I recently did a stock study on Kinsale Capital Group, Inc. (KNSL, $384.90).

M* writes:

     > Kinsale Capital Group Inc is an insurance holding company.
     > The company is engaged in offering property, casualty, and
     > specialty insurance products. It offers specialty insurance
     > products for allied health, healthcare, life sciences,
     > professional, and a public entity. The company operates in
     > only one reportable segment which is the Excess and Surplus
     > Lines Insurance segment, which includes commercial excess
     > and surplus lines liability and property insurance products
     > through its underwriting divisions. The company generates
     > revenues in the form of premiums and investment income.

Over the past decade, this medium-size company has grown sales and earnings at eye-popping annualized rates of 37.8% and 40.0%, respectively. Lines are up, straight, and parallel except for a YOY EPS dip in ’17. Historical data audit (BI website) is perfectly clean and Value Line (VL) gives an Earnings Predictability score of 75.

Over the past decade, PTPM leads peer and industry averages despite falling from 41.6% (’15) to 32.4% (’24) with a last-5-year mean of 27.8%. ROE leads peer and industry averages while increasing from 12.4% (’15) to 28.8% (’24) with a last-5-year mean of 25.4%. Debt-to-Capital is lower than peer and industry averages while falling from 20.7% (’15) to 11.0% (’24) with a last-5-year mean of 11.8%.

Interest Coverage is 59.5 per M* who assigns a “Narrow” [quantitative] Economic Moat and gives a B grade for Financial Health (per BI website). VL gives a B++ grade for Financial Strength.

Per Google AI, 2024 combined ratio is 76.4%. Any number below 100% indicates underwriting profit. With most specialty insurers ranging from 90-95%, Kinsale is considered “industry-leading.”

With regard to sales growth:

• YF gives YOY ACE 17.2% and 7.5% for ’25 and ’26, respectively (based on 7 analysts).
• Zacks gives YOY ACE 17.1% and 7.6% for ’25 and ’26, respectively (6 analysts).
• VL projects 12.2% annualized growth [of “P/C premiums earned”] from ’24-’29.
• CFRA gives ACE 17.2% YOY and 12.3% per year for ’25 and ’24-’26 (7).
• M* provides a 2-year ACE of 12.9% per year.

I am forecasting below the range at 7.0%/year.

With regard to EPS growth:

• MarketWatch projects 13.4% and 12.3% per year for ’24-’26 and ’24-’27 (based on 14 analysts).
• Nasdaq.com gives ACE 8.6% YOY and 10.3% per year for ’26 and ’25-’27 (9 / 9 / 4 analysts for ’25 / ’26 / ’27).
• Seeking Alpha projects 4-year annualized growth of 14.8%.
• Finviz gives 5-year annualized ACE of 11.9% (4).
• LSEG estimates LTG at 14.8%.
• YF gives ACE YOY 17.4% and 8.8% for ’25 and ’26, respectively (10).
• Zacks gives ACE YOY 17.6% and 8.6% for ’25 and ’26 along with 5-year growth of 14.8%/year (9).
• VL projects 9.2% annualized growth from ’24-’29.
• CFRA gives ACE 6.0% YOY and 7.5% per year for ’25 and ’24-’26, respectively (12).
• M* projects long-term annualized growth of 15.0%.

My 9.0% forecast is below the long-term-estimate range (mean of six: 13.4%). Initial value is ’24 EPS of $17.78/share (up 34.5% YOY) instead of 2025 Q3 EPS of $20.36/share (TTM).

My Forecast High P/E is 28.0. Since 2016, high P/E ranges from 28.2 in ’16 to 48.7 in ’22 (excluding 65.3 outlier in ’20) with a last-5-year mean of 37.8 and a last-5-year-mean average P/E of 29.7. I am below the range.

My Forecast Low P/E is 14.0. Since 2016, low P/E increases from 14.5 to 18.8 (’24) with a last-5-year mean of 21.6. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $248.90 is default given initial value from above. This is 35.3% less than the previous closing price and 31.5% less than the 52-week low.

Since 2016, Payout Ratio (PR) ranges from 3.4% (’24) to 20.7% (’17) with a last-5-year mean of 6.2%. I am forecasting below the range at 3.0%.

These inputs land KNSL in the HOLD zone with a U/D ratio of 2.8. Total Annualized Return (TAR) is 14.9%.

PAR (using Forecast Average—not High—P/E) of 8.5% is less than I seek 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 231 studies done in the past 90 days (122 outliers including mine excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 11.3%, 11.7%, 28.7, 20.5, and 6.2%, respectively. I am lower across the board. VL projects a future average annual P/E of 25.0 that is greater than MS (24.6) and greater than mine (21.0).

MS high / low EPS are $33.78 / $19.02 versus my $27.36 / $17.78 (per share). My high EPS is less due to a lower initial value and growth rate. VL is in the middle at $30.00.

MS LSPF of $347.30 implies a Forecast Low P/E of 18.3: less than the above-stated 20.5. MS LSPF is 10.9% less than the default $19.02/share * 20.5 = $389.91 (INVALID on today’s date) resulting in more conservative zoning. MS LSPF is still 39.5% greater than mine.

MOS is robust in the current study because my inputs are less than or near respective analyst/historical ranges and MS averages. MS TAR being 3.2%/year greater than mine along with a much greater MS LSPF also support the assessment.

With regard to valuation, PEG is 1.4 and 1.9 per Zacks and my projected P/E, respectively: fairly valued (0.41 per M* is quite undervalued, however). Relative Value [(current P/E) / 5-year-mean average P/E] is low at 0.64.

Per U/D, KNSL is a BUY under $378/share. BI TAR criterion is met [766.1 / ((14.77 / 100 ) +1 ) ^ 5] ~ $384.00 with a forecast high price ~$766. A rare instance where latter exceeds the former is because I chose to stick with an extremely [possibly unreasonable] low default LSPF.

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