ARIS WATER SOLUTIONS INC-A (ARIS) Stock Fundamental Analysis
NYSE:ARIS - New York Stock Exchange, Inc. - US04041L1061 - Common Stock - Currency: USD
Taking everything into account, ARIS scores 4 out of 10 in our fundamental rating. ARIS was compared to 62 industry peers in the Energy Equipment & Services industry. While ARIS is still in line with the averages on profitability rating, there are concerns on its financial health. ARIS is valued quite expensively, but it does show have an excellent growth rating.
1. Profitability
1.1 Basic Checks
ARIS had positive earnings in the past year.
ARIS had a positive operating cash flow in the past year.
In multiple years ARIS reported negative net income over the last 5 years.
In the past 5 years ARIS always reported a positive cash flow from operatings.
1.2 Ratios
ARIS's Return On Assets of 1.75% is on the low side compared to the rest of the industry. ARIS is outperformed by 64.52% of its industry peers.
With a Return On Equity value of 7.14%, ARIS perfoms like the industry average, outperforming 46.77% of the companies in the same industry.
The Return On Invested Capital of ARIS (7.13%) is comparable to the rest of the industry.
ARIS had an Average Return On Invested Capital over the past 3 years of 5.83%. This is below the industry average of 8.27%.
The last Return On Invested Capital (7.13%) for ARIS is above the 3 year average (5.83%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.75% | ||
| ROE | 7.14% | ||
| ROIC | 7.13% |
ROA(3y)1.1%
ROA(5y)0.45%
ROE(3y)4.51%
ROE(5y)1.92%
ROIC(3y)5.83%
ROIC(5y)4.48%
1.3 Margins
With a Profit Margin value of 5.71%, ARIS perfoms like the industry average, outperforming 46.77% of the companies in the same industry.
ARIS's Profit Margin has declined in the last couple of years.
ARIS's Operating Margin of 25.24% is amongst the best of the industry. ARIS outperforms 91.94% of its industry peers.
ARIS's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 40.85%, ARIS is doing good in the industry, outperforming 79.03% of the companies in the same industry.
ARIS's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.24% | ||
| PM (TTM) | 5.71% | ||
| GM | 40.85% |
OM growth 3Y6.73%
OM growth 5Y20.3%
PM growth 3YN/A
PM growth 5Y-12.32%
GM growth 3Y6.48%
GM growth 5Y12.28%
2. Health
2.1 Basic Checks
ARIS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, ARIS has more shares outstanding
ARIS has more shares outstanding than it did 5 years ago.
The debt/assets ratio for ARIS has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.42, we must say that ARIS is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.42, ARIS is doing worse than 61.29% of the companies in the same industry.
ARIS has a debt to FCF ratio of 5.71. This is a neutral value as ARIS would need 5.71 years to pay back of all of its debts.
ARIS's Debt to FCF ratio of 5.71 is in line compared to the rest of the industry. ARIS outperforms 48.39% of its industry peers.
A Debt/Equity ratio of 1.27 is on the high side and indicates that ARIS has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.27, ARIS is doing worse than 85.48% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.27 | ||
| Debt/FCF | 5.71 | ||
| Altman-Z | 1.42 |
ROIC/WACC0.78
WACC9.09%
2.3 Liquidity
A Current Ratio of 1.22 indicates that ARIS should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.22, ARIS is doing worse than 85.48% of the companies in the same industry.
ARIS has a Quick Ratio of 1.22. This is a normal value and indicates that ARIS is financially healthy and should not expect problems in meeting its short term obligations.
ARIS has a worse Quick ratio (1.22) than 70.97% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 43.18% over the past year.
The Earnings Per Share has been growing by 27.41% on average over the past years. This is a very strong growth
Looking at the last year, ARIS shows a quite strong growth in Revenue. The Revenue has grown by 11.05% in the last year.
ARIS shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 29.67% yearly.
EPS 1Y (TTM)43.18%
EPS 3YN/A
EPS 5Y27.41%
EPS Q2Q%11.54%
Revenue 1Y (TTM)11.05%
Revenue growth 3Y23.83%
Revenue growth 5Y29.67%
Sales Q2Q%13.91%
3.2 Future
ARIS is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.20% yearly.
Based on estimates for the next years, ARIS will show a small growth in Revenue. The Revenue will grow by 6.30% on average per year.
EPS Next Y9.11%
EPS Next 2Y12.69%
EPS Next 3Y14.17%
EPS Next 5Y21.2%
Revenue Next Year12.62%
Revenue Next 2Y10.23%
Revenue Next 3Y9.93%
Revenue Next 5Y6.3%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 20.13 indicates a rather expensive valuation of ARIS.
ARIS's Price/Earnings is on the same level as the industry average.
ARIS's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.85.
The Price/Forward Earnings ratio is 18.45, which indicates a rather expensive current valuation of ARIS.
Based on the Price/Forward Earnings ratio, ARIS is valued a bit more expensive than 74.19% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ARIS to the average of the S&P500 Index (20.77), we can say ARIS is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.13 | ||
| Fwd PE | 18.45 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARIS indicates a rather expensive valuation: ARIS more expensive than 85.48% of the companies listed in the same industry.
ARIS's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.01 | ||
| EV/EBITDA | 10.04 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
A more expensive valuation may be justified as ARIS's earnings are expected to grow with 14.17% in the coming years.
PEG (NY)2.21
PEG (5Y)0.73
EPS Next 2Y12.69%
EPS Next 3Y14.17%
5. Dividend
5.1 Amount
ARIS has a Yearly Dividend Yield of 2.21%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.30, ARIS pays a bit more dividend than its industry peers.
ARIS's Dividend Yield is comparable with the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.21% |
5.2 History
ARIS has paid a dividend for less than 5 years, so there is no long track record yet.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
98.70% of the earnings are spent on dividend by ARIS. This is not a sustainable payout ratio.
DP98.7%
EPS Next 2Y12.69%
EPS Next 3Y14.17%
25.37
+0.41 (+1.64%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners86.92%
Inst Owner Change-0.03%
Ins Owners2.97%
Ins Owner Change2.2%
Market Cap1.50B
Analysts76.84
Price Target33.58 (32.36%)
Short Float %9.04%
Short Ratio3.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.21% |
Yearly Dividend0.42
Dividend Growth(5Y)N/A
DP98.7%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2%
Min EPS beat(2)-16.05%
Max EPS beat(2)12.04%
EPS beat(4)3
Avg EPS beat(4)13.63%
Min EPS beat(4)-16.05%
Max EPS beat(4)46.66%
EPS beat(8)7
Avg EPS beat(8)30.91%
EPS beat(12)9
Avg EPS beat(12)25.92%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)6.35%
Min Revenue beat(2)6.19%
Max Revenue beat(2)6.5%
Revenue beat(4)4
Avg Revenue beat(4)5.01%
Min Revenue beat(4)2.29%
Max Revenue beat(4)6.5%
Revenue beat(8)8
Avg Revenue beat(8)5.04%
Revenue beat(12)11
Avg Revenue beat(12)3.92%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)10.66%
PT rev (3m)26.17%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-12.56%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)-10.46%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)4.46%
Revenue NY rev (1m)3.25%
Revenue NY rev (3m)4.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.13 | ||
| Fwd PE | 18.45 | ||
| P/S | 3.44 | ||
| P/FCF | 19.01 | ||
| P/OCF | 8.39 | ||
| P/B | 4.3 | ||
| P/tB | 12.62 | ||
| EV/EBITDA | 10.04 |
EPS(TTM)1.26
EY4.97%
EPS(NY)1.37
Fwd EY5.42%
FCF(TTM)1.33
FCFY5.26%
OCF(TTM)3.03
OCFY11.93%
SpS7.37
BVpS5.9
TBVpS2.01
PEG (NY)2.21
PEG (5Y)0.73
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.75% | ||
| ROE | 7.14% | ||
| ROCE | 8.36% | ||
| ROIC | 7.13% | ||
| ROICexc | 7.29% | ||
| ROICexgc | 8.87% | ||
| OM | 25.24% | ||
| PM (TTM) | 5.71% | ||
| GM | 40.85% | ||
| FCFM | 18.12% |
ROA(3y)1.1%
ROA(5y)0.45%
ROE(3y)4.51%
ROE(5y)1.92%
ROIC(3y)5.83%
ROIC(5y)4.48%
ROICexc(3y)5.9%
ROICexc(5y)4.57%
ROICexgc(3y)7.47%
ROICexgc(5y)6.05%
ROCE(3y)6.84%
ROCE(5y)5.25%
ROICexcg growth 3Y14.01%
ROICexcg growth 5Y32.54%
ROICexc growth 3Y22.24%
ROICexc growth 5Y40.48%
OM growth 3Y6.73%
OM growth 5Y20.3%
PM growth 3YN/A
PM growth 5Y-12.32%
GM growth 3Y6.48%
GM growth 5Y12.28%
F-Score9
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.27 | ||
| Debt/FCF | 5.71 | ||
| Debt/EBITDA | 2.35 | ||
| Cap/Depr | 126.31% | ||
| Cap/Sales | 22.96% | ||
| Interest Coverage | 3.32 | ||
| Cash Conversion | 94.61% | ||
| Profit Quality | 317.06% | ||
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 | ||
| Altman-Z | 1.42 |
F-Score9
WACC9.09%
ROIC/WACC0.78
Cap/Depr(3y)188.27%
Cap/Depr(5y)201.28%
Cap/Sales(3y)37.3%
Cap/Sales(5y)45.17%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)43.18%
EPS 3YN/A
EPS 5Y27.41%
EPS Q2Q%11.54%
EPS Next Y9.11%
EPS Next 2Y12.69%
EPS Next 3Y14.17%
EPS Next 5Y21.2%
Revenue 1Y (TTM)11.05%
Revenue growth 3Y23.83%
Revenue growth 5Y29.67%
Sales Q2Q%13.91%
Revenue Next Year12.62%
Revenue Next 2Y10.23%
Revenue Next 3Y9.93%
Revenue Next 5Y6.3%
EBIT growth 1Y31.87%
EBIT growth 3Y32.17%
EBIT growth 5Y55.99%
EBIT Next Year100.98%
EBIT Next 3Y33.6%
EBIT Next 5Y21.13%
FCF growth 1Y458.05%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-2.72%
OCF growth 3Y44.89%
OCF growth 5Y112.28%