The average target price of MAXO.TA is 1600 and suggests 13% upside potential. Usually, this means a HOLD recommendation among investment firms. This neutral recommendation suggests no significant price movement, up or down, in the next 12 months. The most optimistic analyst has a target price of 1600.0. This translates into 13% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 1600.0. This suggests 13% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Max Stock Ltd. operates various discount stores in Israel. Its stores provide products in various categories, including school supplies, disposable dishes, clothing and textiles, arts and crafts, furniture, home accessories and gifts, toys, cleaning products, plasticware, kitchen and cooking utensils, bithdays, and tools and hardware. The company is based in Caesarea, Israel.

Israel

Max Stock Ltd.

Consumer Cyclical

The company pays dividends from time to time. It has paid dividends in less than half the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. At the same time, the average five-year yield has been significantly higher and exceeded nearly all its peers. On average, the company pays dividends annually. 

MAXO.TA reported revenue of ILS 1 331mn in the last 12 months, up 19% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 33% from FY23 to ILS 0.77. Market expects EPS to reach ILS 0.83 in FY25.

The stock has been growing steadily in the past six months, adding 40% in total. The stock has outperformed its global peers from the same sector and industry (as shown above), surpassing them by 44ppts in total. At the same time, the stock's performance relative to its the peers from the same country and sector is different. The stock outperformed these peers by 31ppts over the past six months and grew 13ppts faster in the past month. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported average EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 20.9% in the last 12 months, up from 20.0% in FY23. 

Historically, MAXO.TA has reported average net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 8.2%, a growth from 7.2% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 9.1% in the last 12 months, an increase from 7.7% in FY23. The market analysts predict that RoA will be -1.0% in FY24, though below its peers in this period. 

In the last 12 months, the return on capital employed (RoCE) grew to 11.8%, above the peers. The consensus estimate for FY24 for RoCE is -2.4%, however, this time below its peers. 

Max Stock Ltd. reported a return on equity (RoE) of 44.2% in the last 12 months, up from 38.2% in FY23. The market consensus projects an RoE of -5.0% in FY24, however, this time below its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.5 in the past several years. This ratio implies a strong shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

MAXO.TA has poor trading liquidity. The average private investor can sell his common position in the stock in a single trading day under normal market conditions. Liquidity is relatively stable and remains extremely favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note solid return on capital, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, poor working capital management, and an unfavourable capital structure.

In highly turbulent market conditions, MAXO.TA is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, MAXO.TA is highly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change somewhat erratically. The stock's losses on its worst days (less than 1-5% of the time) will range from low to substantial. 

Considering past and projected metrics, the stock is 'cheaper' than its peers. In particular, the stock is underpriced on P/E, 'cheap' on EV/EBITDA, undervalued on P/FCF. 

Max Stock Ltd.

ILA 1500

4

Max Stock Ltd.

ILA 1500

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

ILA 1500

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