ARIS WATER SOLUTIONS INC-A (ARIS) Stock Fundamental Analysis
NYSE:ARIS - New York Stock Exchange, Inc. - US04041L1061 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to ARIS. ARIS was compared to 63 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
In the past year ARIS was profitable.
In the past year ARIS had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: ARIS reported negative net income in multiple years.
ARIS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of 1.75%, ARIS is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
The Return On Equity of ARIS (7.14%) is comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 7.13%, ARIS is in line with its industry, outperforming 53.97% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ARIS is below the industry average of 8.44%.
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
ARIS has a Profit Margin (5.71%) which is comparable to the rest of the industry.
ARIS's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 25.24%, ARIS belongs to the top of the industry, outperforming 90.48% of the companies in the same industry.
In the last couple of years the Operating Margin of ARIS has grown nicely.
ARIS's Gross Margin of 40.85% is amongst the best of the industry. ARIS outperforms 80.95% of its industry peers.
In the last couple of years the Gross Margin of ARIS has grown nicely.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ARIS is destroying value.
The number of shares outstanding for ARIS has been increased compared to 1 year ago.
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 1.37, 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 1.37, ARIS is doing worse than 66.67% 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 50.79% 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 82.54% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.27 | ||
| Debt/FCF | 5.71 | ||
| Altman-Z | 1.37 |
ROIC/WACC0.86
WACC8.33%
2.3 Liquidity
ARIS has a Current 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.
The Current ratio of ARIS (1.22) is worse than 84.13% of its industry peers.
A Quick Ratio of 1.22 indicates that ARIS should not have too much problems paying its short term obligations.
ARIS's Quick ratio of 1.22 is on the low side compared to the rest of the industry. ARIS is outperformed by 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 |
3. Growth
3.1 Past
ARIS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.95%, which is quite impressive.
ARIS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 27.41% yearly.
Looking at the last year, ARIS shows a quite strong growth in Revenue. The Revenue has grown by 12.03% in the last year.
The Revenue has been growing by 29.67% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)20.95%
EPS 3YN/A
EPS 5Y27.41%
EPS Q2Q%2.94%
Revenue 1Y (TTM)12.03%
Revenue growth 3Y23.83%
Revenue growth 5Y29.67%
Sales Q2Q%16.52%
3.2 Future
Based on estimates for the next years, ARIS will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.58% on average per year.
The Revenue is expected to grow by 6.30% on average over the next years.
EPS Next Y10.98%
EPS Next 2Y11.24%
EPS Next 3Y14.7%
EPS Next 5Y19.58%
Revenue Next Year13.61%
Revenue Next 2Y8.59%
Revenue Next 3Y8.01%
Revenue Next 5Y6.3%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past 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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 18.62, the valuation of ARIS can be described as rather expensive.
The rest of the industry has a similar Price/Earnings ratio as ARIS.
Compared to an average S&P500 Price/Earnings ratio of 27.15, ARIS is valued a bit cheaper.
The Price/Forward Earnings ratio is 15.17, which indicates a correct valuation of ARIS.
ARIS's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. ARIS is more expensive than 61.90% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.60. ARIS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.62 | ||
| Fwd PE | 15.17 |
4.2 Price Multiples
ARIS's Enterprise Value to EBITDA ratio is rather expensive when compared to the industry. ARIS is more expensive than 82.54% of the companies in the same industry.
ARIS's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.73 | ||
| EV/EBITDA | 9.56 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of ARIS may justify a higher PE ratio.
A more expensive valuation may be justified as ARIS's earnings are expected to grow with 14.70% in the coming years.
PEG (NY)1.7
PEG (5Y)0.68
EPS Next 2Y11.24%
EPS Next 3Y14.7%
5. Dividend
5.1 Amount
ARIS has a Yearly Dividend Yield of 2.34%.
ARIS's Dividend Yield is a higher than the industry average which is at 3.70.
ARIS's Dividend Yield is comparable with the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.34% |
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
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 2Y11.24%
EPS Next 3Y14.7%
23.65
+0.22 (+0.94%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners106.15%
Inst Owner Change25.31%
Ins Owners4.18%
Ins Owner Change2.51%
Market Cap1.40B
Analysts77.89
Price Target30.26 (27.95%)
Short Float %10.12%
Short Ratio4.07
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.34% |
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)-9.64%
PT rev (3m)-5.47%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.96%
EPS NY rev (1m)-2.88%
EPS NY rev (3m)1.69%
Revenue NQ rev (1m)0.66%
Revenue NQ rev (3m)0.3%
Revenue NY rev (1m)-0.71%
Revenue NY rev (3m)4.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.62 | ||
| Fwd PE | 15.17 | ||
| P/S | 3.21 | ||
| P/FCF | 17.73 | ||
| P/OCF | 7.82 | ||
| P/B | 4.01 | ||
| P/tB | 11.77 | ||
| EV/EBITDA | 9.56 |
EPS(TTM)1.27
EY5.37%
EPS(NY)1.56
Fwd EY6.59%
FCF(TTM)1.33
FCFY5.64%
OCF(TTM)3.02
OCFY12.79%
SpS7.36
BVpS5.89
TBVpS2.01
PEG (NY)1.7
PEG (5Y)0.68
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 | 1.37 |
F-Score9
WACC8.33%
ROIC/WACC0.86
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)20.95%
EPS 3YN/A
EPS 5Y27.41%
EPS Q2Q%2.94%
EPS Next Y10.98%
EPS Next 2Y11.24%
EPS Next 3Y14.7%
EPS Next 5Y19.58%
Revenue 1Y (TTM)12.03%
Revenue growth 3Y23.83%
Revenue growth 5Y29.67%
Sales Q2Q%16.52%
Revenue Next Year13.61%
Revenue Next 2Y8.59%
Revenue Next 3Y8.01%
Revenue Next 5Y6.3%
EBIT growth 1Y31.87%
EBIT growth 3Y32.17%
EBIT growth 5Y55.99%
EBIT Next Year99.92%
EBIT Next 3Y32.25%
EBIT Next 5Y20.27%
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%