ARC Document Solutions Inc (ARC) Stock Fundamental Analysis
NYSE:ARC - New York Stock Exchange, Inc. - US00191G1031 - Common Stock - Currency: USD
Overall ARC gets a fundamental rating of 5 out of 10. We evaluated ARC against 83 industry peers in the Commercial Services & Supplies industry. Both the profitability and the financial health of ARC get a neutral evaluation. Nothing too spectacular is happening here. ARC has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year ARC was profitable.
In the past year ARC had a positive cash flow from operations.
In the past 5 years ARC has always been profitable.
Each year in the past 5 years ARC had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 1.49%, ARC perfoms like the industry average, outperforming 52.38% of the companies in the same industry.
ARC has a Return On Equity (3.01%) which is comparable to the rest of the industry.
ARC has a Return On Invested Capital (3.76%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for ARC is significantly below the industry average of 11.67%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.49% | ||
| ROE | 3.01% | ||
| ROIC | 3.76% |
ROA(3y)3.03%
ROA(5y)2.34%
ROE(3y)6.17%
ROE(5y)4.96%
ROIC(3y)4.64%
ROIC(5y)4.07%
1.3 Margins
ARC has a Profit Margin (1.61%) which is comparable to the rest of the industry.
ARC's Profit Margin has improved in the last couple of years.
The Operating Margin of ARC (4.78%) is comparable to the rest of the industry.
ARC's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 33.23%, ARC is in line with its industry, outperforming 54.76% of the companies in the same industry.
In the last couple of years the Gross Margin of ARC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.78% | ||
| PM (TTM) | 1.61% | ||
| GM | 33.23% |
OM growth 3Y14.39%
OM growth 5Y7.5%
PM growth 3Y10.99%
PM growth 5Y5.69%
GM growth 3Y1.52%
GM growth 5Y0.55%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ARC is destroying value.
Compared to 1 year ago, ARC has less shares outstanding
The number of shares outstanding for ARC has been reduced compared to 5 years ago.
ARC has a better debt/assets ratio than last year.
2.2 Solvency
ARC has an Altman-Z score of 1.96. This is not the best score and indicates that ARC is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of ARC (1.96) is comparable to the rest of the industry.
The Debt to FCF ratio of ARC is 3.13, which is a good value as it means it would take ARC, 3.13 years of fcf income to pay off all of its debts.
ARC has a better Debt to FCF ratio (3.13) than 75.00% of its industry peers.
ARC has a Debt/Equity ratio of 0.34. This is a healthy value indicating a solid balance between debt and equity.
ARC's Debt to Equity ratio of 0.34 is fine compared to the rest of the industry. ARC outperforms 63.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | 3.13 | ||
| Altman-Z | 1.96 |
ROIC/WACC0.56
WACC6.71%
2.3 Liquidity
ARC has a Current Ratio of 1.49. This is a normal value and indicates that ARC is financially healthy and should not expect problems in meeting its short term obligations.
ARC has a Current ratio of 1.49. This is comparable to the rest of the industry: ARC outperforms 46.43% of its industry peers.
ARC has a Quick Ratio of 1.37. This is a normal value and indicates that ARC is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.37, ARC perfoms like the industry average, outperforming 55.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.49 | ||
| Quick Ratio | 1.37 |
3. Growth
3.1 Past
The earnings per share for ARC have decreased strongly by -29.63% in the last year.
ARC shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -1.09% yearly.
The Revenue has been growing slightly by 2.86% in the past year.
ARC shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -6.84% yearly.
EPS 1Y (TTM)-29.63%
EPS 3Y10.6%
EPS 5Y-1.09%
EPS Q2Q%-100%
Revenue 1Y (TTM)2.86%
Revenue growth 3Y-0.96%
Revenue growth 5Y-6.84%
Sales Q2Q%4.77%
3.2 Future
ARC is expected to show a very negative growth in Earnings Per Share. In the coming years, the EPS will decrease by -18.74% yearly.
Based on estimates for the next years, ARC will show a small growth in Revenue. The Revenue will grow by 4.14% on average per year.
EPS Next Y-22.31%
EPS Next 2Y-18.74%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year4.63%
Revenue Next 2Y4.14%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 17.84, which indicates a rather expensive current valuation of ARC.
ARC's Price/Earnings ratio is a bit cheaper when compared to the industry. ARC is cheaper than 73.81% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.15. ARC is valued slightly cheaper when compared to this.
ARC is valuated rather expensively with a Price/Forward Earnings ratio of 19.74.
Based on the Price/Forward Earnings ratio, ARC is valued a bit cheaper than 71.43% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ARC to the average of the S&P500 Index (21.60), we can say ARC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.84 | ||
| Fwd PE | 19.74 |
4.2 Price Multiples
92.86% of the companies in the same industry are more expensive than ARC, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARC indicates a rather cheap valuation: ARC is cheaper than 94.05% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.76 | ||
| EV/EBITDA | 5.15 |
4.3 Compensation for Growth
ARC's earnings are expected to decrease with -18.74% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-18.74%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.90%, ARC is a good candidate for dividend investing.
ARC's Dividend Yield is rather good when compared to the industry average which is at 2.45. ARC pays more dividend than 100.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, ARC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.9% |
5.2 History
ARC has been paying a dividend for over 5 years, so it has already some track record.
ARC has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
181.67% of the earnings are spent on dividend by ARC. This is not a sustainable payout ratio.
DP181.67%
EPS Next 2Y-18.74%
EPS Next 3YN/A
3.39
0 (0%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners49.24%
Inst Owner Change-30.86%
Ins Owners1.73%
Ins Owner Change0%
Market Cap146.65M
Analysts84
Price Target4.44 (30.97%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.9% |
Yearly Dividend0.2
Dividend Growth(5Y)N/A
DP181.67%
Div Incr Years4
Div Non Decr Years4
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-47.19%
Min EPS beat(2)-100%
Max EPS beat(2)5.61%
EPS beat(4)2
Avg EPS beat(4)-18.09%
Min EPS beat(4)-100%
Max EPS beat(4)32.01%
EPS beat(8)3
Avg EPS beat(8)-9.54%
EPS beat(12)6
Avg EPS beat(12)-0.4%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)1.7%
Min Revenue beat(2)1.39%
Max Revenue beat(2)2%
Revenue beat(4)4
Avg Revenue beat(4)1.48%
Min Revenue beat(4)0.84%
Max Revenue beat(4)2%
Revenue beat(8)4
Avg Revenue beat(8)-0.7%
Revenue beat(12)7
Avg Revenue beat(12)0.21%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)-18.69%
EPS NQ rev (1m)-66.67%
EPS NQ rev (3m)-66.67%
EPS NY rev (1m)-25.93%
EPS NY rev (3m)-25.93%
Revenue NQ rev (1m)4.13%
Revenue NQ rev (3m)4.13%
Revenue NY rev (1m)1.25%
Revenue NY rev (3m)2.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.84 | ||
| Fwd PE | 19.74 | ||
| P/S | 0.51 | ||
| P/FCF | 7.76 | ||
| P/OCF | 4.46 | ||
| P/B | 0.95 | ||
| P/tB | 4.33 | ||
| EV/EBITDA | 5.15 |
EPS(TTM)0.19
EY5.6%
EPS(NY)0.17
Fwd EY5.06%
FCF(TTM)0.44
FCFY12.89%
OCF(TTM)0.76
OCFY22.43%
SpS6.69
BVpS3.58
TBVpS0.78
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.49% | ||
| ROE | 3.01% | ||
| ROCE | 5.79% | ||
| ROIC | 3.76% | ||
| ROICexc | 4.79% | ||
| ROICexgc | 13.53% | ||
| OM | 4.78% | ||
| PM (TTM) | 1.61% | ||
| GM | 33.23% | ||
| FCFM | 6.54% |
ROA(3y)3.03%
ROA(5y)2.34%
ROE(3y)6.17%
ROE(5y)4.96%
ROIC(3y)4.64%
ROIC(5y)4.07%
ROICexc(3y)6.02%
ROICexc(5y)5.13%
ROICexgc(3y)17.47%
ROICexgc(5y)13.75%
ROCE(3y)7.15%
ROCE(5y)6.28%
ROICexcg growth 3Y29.73%
ROICexcg growth 5Y10.98%
ROICexc growth 3Y19.41%
ROICexc growth 5Y4.78%
OM growth 3Y14.39%
OM growth 5Y7.5%
PM growth 3Y10.99%
PM growth 5Y5.69%
GM growth 3Y1.52%
GM growth 5Y0.55%
F-Score5
Asset Turnover0.92
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | 3.13 | ||
| Debt/EBITDA | 1.74 | ||
| Cap/Depr | 86.39% | ||
| Cap/Sales | 4.84% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 109.63% | ||
| Profit Quality | 405.82% | ||
| Current Ratio | 1.49 | ||
| Quick Ratio | 1.37 | ||
| Altman-Z | 1.96 |
F-Score5
WACC6.71%
ROIC/WACC0.56
Cap/Depr(3y)34.84%
Cap/Depr(5y)33.2%
Cap/Sales(3y)2.4%
Cap/Sales(5y)2.56%
Profit Quality(3y)316.5%
Profit Quality(5y)611.06%
High Growth Momentum
Growth
EPS 1Y (TTM)-29.63%
EPS 3Y10.6%
EPS 5Y-1.09%
EPS Q2Q%-100%
EPS Next Y-22.31%
EPS Next 2Y-18.74%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)2.86%
Revenue growth 3Y-0.96%
Revenue growth 5Y-6.84%
Sales Q2Q%4.77%
Revenue Next Year4.63%
Revenue Next 2Y4.14%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-25.32%
EBIT growth 3Y13.28%
EBIT growth 5Y0.14%
EBIT Next Year74.29%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-35.91%
FCF growth 3Y-18.72%
FCF growth 5Y-8.42%
OCF growth 1Y-3.26%
OCF growth 3Y-12.44%
OCF growth 5Y-7.83%