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ARIS WATER SOLUTIONS INC-A (ARIS) Stock Fundamental Analysis

NYSE:ARIS - New York Stock Exchange, Inc. - US04041L1061 - Common Stock

29.8  +1.16 (+4.05%)

After market: 30.26 +0.46 (+1.54%)

Fundamental Rating

5

Taking everything into account, ARIS scores 5 out of 10 in our fundamental rating. ARIS was compared to 83 industry peers in the Commercial Services & Supplies industry. There are concerns on the financial health of ARIS while its profitability can be described as average. ARIS has a correct valuation and a medium growth rate.


Dividend Valuation Growth Profitability Health

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6

1. Profitability

1.1 Basic Checks

In the past year ARIS was profitable.
ARIS had a positive operating cash flow in the past year.
In multiple years ARIS reported negative net income over the last 5 years.
Each year in the past 5 years ARIS had a positive operating cash flow.
ARIS Yearly Net Income VS EBIT VS OCF VS FCFARIS Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2019 2020 2021 2022 2023 0 100M -100M

1.2 Ratios

ARIS has a Return On Assets (1.77%) which is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 7.27%, ARIS is in the better half of the industry, outperforming 63.41% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 7.12%, ARIS is in the better half of the industry, outperforming 60.98% of the companies in the same industry.
ARIS had an Average Return On Invested Capital over the past 3 years of 4.86%. This is significantly below the industry average of 10.10%.
The last Return On Invested Capital (7.12%) for ARIS is above the 3 year average (4.86%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 1.77%
ROE 7.27%
ROIC 7.12%
ROA(3y)0.31%
ROA(5y)0.41%
ROE(3y)1.03%
ROE(5y)0.98%
ROIC(3y)4.86%
ROIC(5y)3.42%
ARIS Yearly ROA, ROE, ROICARIS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2019 2020 2021 2022 2023 0 2 -2 4

1.3 Margins

With a decent Profit Margin value of 5.92%, ARIS is doing good in the industry, outperforming 70.73% of the companies in the same industry.
With an excellent Operating Margin value of 25.31%, ARIS belongs to the best of the industry, outperforming 98.78% of the companies in the same industry.
In the last couple of years the Operating Margin of ARIS has grown nicely.
Looking at the Gross Margin, with a value of 40.62%, ARIS is in the better half of the industry, outperforming 68.29% of the companies in the same industry.
ARIS's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 25.31%
PM (TTM) 5.92%
GM 40.62%
OM growth 3Y40.07%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y23.41%
GM growth 5YN/A
ARIS Yearly Profit, Operating, Gross MarginsARIS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2019 2020 2021 2022 2023 0 10 20 30

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3

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.
ARIS has more shares outstanding than it did 1 year ago.
Compared to 1 year ago, ARIS has an improved debt to assets ratio.
ARIS Yearly Shares OutstandingARIS Yearly Shares OutstandingYearly Shares Outstanding 2019 2020 2021 2022 2023 10M 20M 30M 40M 50M
ARIS Yearly Total Debt VS Total AssetsARIS Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2019 2020 2021 2022 2023 200M 400M 600M 800M 1B

2.2 Solvency

Based on the Altman-Z score of 1.56, we must say that ARIS is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of ARIS (1.56) is worse than 65.85% of its industry peers.
ARIS has a debt to FCF ratio of 25.80. This is a negative value and a sign of low solvency as ARIS would need 25.80 years to pay back of all of its debts.
With a Debt to FCF ratio value of 25.80, ARIS perfoms like the industry average, outperforming 40.24% of the companies in the same industry.
ARIS has a Debt/Equity ratio of 1.32. This is a high value indicating a heavy dependency on external financing.
ARIS's Debt to Equity ratio of 1.32 is on the low side compared to the rest of the industry. ARIS is outperformed by 73.17% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.32
Debt/FCF 25.8
Altman-Z 1.56
ROIC/WACC0.8
WACC8.95%
ARIS Yearly LT Debt VS Equity VS FCFARIS Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2019 2020 2021 2022 2023 0 200M 400M 600M

2.3 Liquidity

ARIS has a Current Ratio of 1.72. This is a normal value and indicates that ARIS is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of ARIS (1.72) is better than 63.41% of its industry peers.
ARIS has a Quick Ratio of 1.72. This is a normal value and indicates that ARIS is financially healthy and should not expect problems in meeting its short term obligations.
ARIS's Quick ratio of 1.72 is fine compared to the rest of the industry. ARIS outperforms 74.39% of its industry peers.
Industry RankSector Rank
Current Ratio 1.72
Quick Ratio 1.72
ARIS Yearly Current Assets VS Current LiabilitesARIS Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2019 2020 2021 2022 2023 20M 40M 60M 80M 100M

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6

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 80.88% over the past year.
ARIS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.51%.
Measured over the past years, ARIS shows a very strong growth in Revenue. The Revenue has been growing by 31.74% on average per year.
EPS 1Y (TTM)80.88%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%47.83%
Revenue 1Y (TTM)13.51%
Revenue growth 3Y31.74%
Revenue growth 5YN/A
Sales Q2Q%12.55%

3.2 Future

The Earnings Per Share is expected to grow by 29.81% on average over the next years. This is a very strong growth
ARIS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.36% yearly.
EPS Next Y34.92%
EPS Next 2Y32.09%
EPS Next 3Y25.77%
EPS Next 5Y29.81%
Revenue Next Year10.43%
Revenue Next 2Y9.18%
Revenue Next 3Y7.82%
Revenue Next 5Y7.36%

3.3 Evolution

When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
ARIS Yearly Revenue VS EstimatesARIS Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 100M 200M 300M 400M 500M
ARIS Yearly EPS VS EstimatesARIS Yearly EPS VS EstimatesYearly EPS VS Estimates 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 1 2 3 4

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5

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 24.23 indicates a rather expensive valuation of ARIS.
65.85% of the companies in the same industry are more expensive than ARIS, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 27.96. ARIS is around the same levels.
Based on the Price/Forward Earnings ratio of 19.41, the valuation of ARIS can be described as rather expensive.
74.39% of the companies in the same industry are more expensive than ARIS, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.11, ARIS is valued at the same level.
Industry RankSector Rank
PE 24.23
Fwd PE 19.41
ARIS Price Earnings VS Forward Price EarningsARIS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, ARIS is valued a bit cheaper than 63.41% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARIS is on the same level as its industry peers.
Industry RankSector Rank
P/FCF 98.81
EV/EBITDA 11.28
ARIS Per share dataARIS EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ARIS has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ARIS's earnings are expected to grow with 25.77% in the coming years.
PEG (NY)0.69
PEG (5Y)N/A
EPS Next 2Y32.09%
EPS Next 3Y25.77%

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2

5. Dividend

5.1 Amount

ARIS has a Yearly Dividend Yield of 1.80%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.15, ARIS pays a better dividend. On top of this ARIS pays more dividend than 82.93% of the companies listed in the same industry.
Compared to the average S&P500 Dividend Yield of 2.33, ARIS is paying slightly less dividend.
Industry RankSector Rank
Dividend Yield 1.8%

5.2 History

ARIS has been paying a dividend for less than 5 years, so it still needs to build a track record.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
ARIS Yearly Dividends per shareARIS Yearly Dividends per shareYearly Dividends per share 2022 2023 2024 0.1 0.2 0.3 0.4

5.3 Sustainability

94.43% of the earnings are spent on dividend by ARIS. This is not a sustainable payout ratio.
DP94.43%
EPS Next 2Y32.09%
EPS Next 3Y25.77%
ARIS Yearly Income VS Free CF VS DividendARIS Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2019 2020 2021 2022 2023 0 -50M -100M -150M
ARIS Dividend Payout.ARIS Dividend Payout, showing the Payout Ratio.ARIS Dividend Payout.PayoutRetained Earnings

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ARIS WATER SOLUTIONS INC-A

NYSE:ARIS (1/17/2025, 8:04:01 PM)

After market: 30.26 +0.46 (+1.54%)

29.8

+1.16 (+4.05%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)11-04 2024-11-04/amc
Earnings (Next)N/A N/A
Inst Owners82.37%
Inst Owner Change-0.13%
Ins Owners3.37%
Ins Owner Change-0.87%
Market Cap1.74B
Analysts80
Price Target26.61 (-10.7%)
Short Float %7.07%
Short Ratio2.95
Dividend
Industry RankSector Rank
Dividend Yield 1.8%
Yearly Dividend0.37
Dividend Growth(5Y)N/A
DP94.43%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.96%
Min EPS beat(2)11.88%
Max EPS beat(2)12.04%
EPS beat(4)4
Avg EPS beat(4)21.81%
Min EPS beat(4)11.88%
Max EPS beat(4)46.66%
EPS beat(8)7
Avg EPS beat(8)24.42%
EPS beat(12)10
Avg EPS beat(12)48.95%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)4.39%
Min Revenue beat(2)2.29%
Max Revenue beat(2)6.5%
Revenue beat(4)4
Avg Revenue beat(4)4.86%
Min Revenue beat(4)2.29%
Max Revenue beat(4)6.5%
Revenue beat(8)7
Avg Revenue beat(8)3.49%
Revenue beat(12)11
Avg Revenue beat(12)3.53%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)9.13%
PT rev (3m)36.24%
EPS NQ rev (1m)0%
EPS NQ rev (3m)12.72%
EPS NY rev (1m)0.69%
EPS NY rev (3m)2.11%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)3.41%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.46%
Valuation
Industry RankSector Rank
PE 24.23
Fwd PE 19.41
P/S 4.12
P/FCF 98.81
P/OCF 12.17
P/B 5.06
P/tB 16.74
EV/EBITDA 11.28
EPS(TTM)1.23
EY4.13%
EPS(NY)1.54
Fwd EY5.15%
FCF(TTM)0.3
FCFY1.01%
OCF(TTM)2.45
OCFY8.22%
SpS7.23
BVpS5.89
TBVpS1.78
PEG (NY)0.69
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 1.77%
ROE 7.27%
ROCE 8.1%
ROIC 7.12%
ROICexc 7.3%
ROICexgc 8.98%
OM 25.31%
PM (TTM) 5.92%
GM 40.62%
FCFM 4.17%
ROA(3y)0.31%
ROA(5y)0.41%
ROE(3y)1.03%
ROE(5y)0.98%
ROIC(3y)4.86%
ROIC(5y)3.42%
ROICexc(3y)4.94%
ROICexc(5y)3.48%
ROICexgc(3y)6.71%
ROICexgc(5y)4.85%
ROCE(3y)5.52%
ROCE(5y)3.89%
ROICexcg growth 3Y58.42%
ROICexcg growth 5YN/A
ROICexc growth 3Y71.08%
ROICexc growth 5YN/A
OM growth 3Y40.07%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y23.41%
GM growth 5YN/A
F-Score8
Asset Turnover0.3
Health
Industry RankSector Rank
Debt/Equity 1.32
Debt/FCF 25.8
Debt/EBITDA 2.45
Cap/Depr 159.01%
Cap/Sales 29.7%
Interest Coverage 3.68
Cash Conversion 77.01%
Profit Quality 70.5%
Current Ratio 1.72
Quick Ratio 1.72
Altman-Z 1.56
F-Score8
WACC8.95%
ROIC/WACC0.8
Cap/Depr(3y)187.12%
Cap/Depr(5y)363.38%
Cap/Sales(3y)40.5%
Cap/Sales(5y)71.38%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)80.88%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%47.83%
EPS Next Y34.92%
EPS Next 2Y32.09%
EPS Next 3Y25.77%
EPS Next 5Y29.81%
Revenue 1Y (TTM)13.51%
Revenue growth 3Y31.74%
Revenue growth 5YN/A
Sales Q2Q%12.55%
Revenue Next Year10.43%
Revenue Next 2Y9.18%
Revenue Next 3Y7.82%
Revenue Next 5Y7.36%
EBIT growth 1Y50.37%
EBIT growth 3Y84.53%
EBIT growth 5YN/A
EBIT Next Year155.6%
EBIT Next 3Y42.8%
EBIT Next 5Y28.77%
FCF growth 1Y158.15%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y80.96%
OCF growth 3Y39.47%
OCF growth 5YN/A