Faze Three (FAZE3Q)

FairStock Score: 19/100 — RISKY

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Revenue growth of 27.35% shows strong demand for products
• Promoter holding at 57.95% aligns management with minority shareholders
• Debt/equity of 0.55 is manageable, not overleveraged
• ROCE of 11.88% is higher than ROE, suggesting operating assets generate decent returns before leverage

Concerns

• Profit growth is -27.85% while sales grow, indicating severe margin compression
• Latest quarter net margin is only about 2.6% (₹6 Cr profit on ₹227 Cr sales)
• P/E of 35.45 and P/B of 2.84 offer no margin of safety given weak ROE
• Piotroski F-Score of 4/9 flags weak financial health and poor profit quality

AI Analysis

When I study Faze Three, I see a company that is busy selling more but not making more. Sales grew 27.35%, but profits fell 27.85%. In the latest quarter, they did ₹227 crore in sales yet only kept ₹6 crore as profit — that's a net margin under 3%. Any business can achieve growth by cutting prices or accepting poor orders; that is not a moat. ROE stands at just 7.83%, and ROCE 11.88% — mediocre numbers that do not compensate me for the risk. Book value is ₹167 per share, but the market asks ₹473.90, about 2.84 times book. With a P/E of 35.45 on declining earnings, I'm paying a rich price for a business with no dividend. The Piotroski score of 4 out of 9 confirms weak financial health. Debt-to-equity of 0.55 is acceptable, but I prefer stronger balance sheets. Promoter holding at 57.95% at least shows alignment, and a 27% revenue pace indicates demand. But Graham's margin of safety is absent. A PEG of 1.30 is meaningless when profit growth is negative. This is not a compounder; it looks like a cyclical or turnaround situation. I would wait for margins to expand and profit growth to return before investing a rupee.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer