ARIS WATER SOLUTIONS INC-A (ARIS) Stock Fundamental Analysis
NYSE:ARIS - New York Stock Exchange, Inc. - US04041L1061 - Common Stock - Currency: USD
ARIS gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 84 industry peers in the Commercial Services & Supplies industry. While ARIS is still in line with the averages on profitability rating, there are concerns on its financial health. ARIS has a correct valuation and a medium growth rate.
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.
1.2 Ratios
The Return On Assets of ARIS (1.77%) is comparable to the rest of the industry.
The Return On Equity of ARIS (7.27%) is better than 63.41% of its industry peers.
ARIS's Return On Invested Capital of 7.12% is in line compared to the rest of the industry. ARIS outperforms 59.76% of its industry peers.
ARIS had an Average Return On Invested Capital over the past 3 years of 4.86%. This is significantly below the industry average of 10.12%.
The 3 year average ROIC (4.86%) for ARIS is below the current ROIC(7.12%), indicating increased profibility in the last year.
| Industry Rank | Sector 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%
1.3 Margins
ARIS has a Profit Margin of 5.92%. This is in the better half of the industry: ARIS outperforms 71.95% of its industry peers.
The Operating Margin of ARIS (25.31%) is better than 98.78% of its industry peers.
ARIS's Operating Margin has improved in the last couple of years.
ARIS's Gross Margin of 40.62% is fine compared to the rest of the industry. ARIS outperforms 68.29% of its industry peers.
In the last couple of years the Gross Margin of ARIS has grown nicely.
| Industry Rank | Sector 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
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.
The debt/assets ratio for ARIS has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.57, we must say that ARIS is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of ARIS (1.57) is worse than 60.98% 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.
ARIS's Debt to FCF ratio of 25.80 is in line compared to the rest of the industry. ARIS outperforms 40.24% of its industry peers.
A Debt/Equity ratio of 1.32 is on the high side and indicates that ARIS has dependencies on debt financing.
With a Debt to Equity ratio value of 1.32, ARIS is not doing good in the industry: 74.39% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.32 | ||
| Debt/FCF | 25.8 | ||
| Altman-Z | 1.57 |
ROIC/WACC0.84
WACC8.48%
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.
ARIS's Current ratio of 1.72 is fine compared to the rest of the industry. ARIS outperforms 63.41% of its industry peers.
A Quick Ratio of 1.72 indicates that ARIS should not have too much problems paying its short term obligations.
ARIS has a Quick ratio of 1.72. This is in the better half of the industry: ARIS outperforms 74.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.72 | ||
| Quick Ratio | 1.72 |
3. Growth
3.1 Past
ARIS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 80.88%, which is quite impressive.
Looking at the last year, ARIS shows a quite strong growth in Revenue. The Revenue has grown by 13.51% in the last year.
ARIS shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 31.74% yearly.
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
ARIS is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 29.81% yearly.
The Revenue is expected to grow by 7.36% on average over the next years.
EPS Next Y37.02%
EPS Next 2Y31.35%
EPS Next 3Y25.49%
EPS Next 5Y29.81%
Revenue Next Year10.75%
Revenue Next 2Y9.28%
Revenue Next 3Y8.11%
Revenue Next 5Y7.36%
3.3 Evolution
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
Based on the Price/Earnings ratio of 21.63, the valuation of ARIS can be described as rather expensive.
62.20% 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 29.63. ARIS is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 17.53, ARIS is valued on the expensive side.
68.29% of the companies in the same industry are more expensive than ARIS, based on the Price/Forward Earnings ratio.
ARIS's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.63 | ||
| Fwd PE | 17.53 |
4.2 Price Multiples
ARIS's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, ARIS is valued a bit more expensive than the industry average as 60.98% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 88.24 | ||
| EV/EBITDA | 11.34 |
4.3 Compensation for Growth
ARIS's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap 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 25.49% in the coming years.
PEG (NY)0.58
PEG (5Y)N/A
EPS Next 2Y31.35%
EPS Next 3Y25.49%
5. Dividend
5.1 Amount
ARIS has a Yearly Dividend Yield of 1.55%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.12, ARIS pays a better dividend. On top of this ARIS pays more dividend than 81.71% of the companies listed in the same industry.
ARIS's Dividend Yield is slightly below the S&P500 average, which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
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
ARIS pays out 94.43% of its income as dividend. This is not a sustainable payout ratio.
DP94.43%
EPS Next 2Y31.35%
EPS Next 3Y25.49%
26.61
-2.23 (-7.73%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners82.37%
Inst Owner Change6.13%
Ins Owners3.37%
Ins Owner Change0.31%
Market Cap1.55B
Analysts76.67
Price Target28.39 (6.69%)
Short Float %6.31%
Short Ratio2.47
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
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)6.68%
PT rev (3m)45.34%
EPS NQ rev (1m)0.2%
EPS NQ rev (3m)3.53%
EPS NY rev (1m)1.56%
EPS NY rev (3m)0.38%
Revenue NQ rev (1m)0.77%
Revenue NQ rev (3m)0.77%
Revenue NY rev (1m)0.29%
Revenue NY rev (3m)0.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.63 | ||
| Fwd PE | 17.53 | ||
| P/S | 3.68 | ||
| P/FCF | 88.24 | ||
| P/OCF | 10.87 | ||
| P/B | 4.52 | ||
| P/tB | 14.95 | ||
| EV/EBITDA | 11.34 |
EPS(TTM)1.23
EY4.62%
EPS(NY)1.52
Fwd EY5.71%
FCF(TTM)0.3
FCFY1.13%
OCF(TTM)2.45
OCFY9.2%
SpS7.23
BVpS5.89
TBVpS1.78
PEG (NY)0.58
PEG (5Y)N/A
Profitability
| Industry Rank | Sector 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 Rank | Sector 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 | 1.57 |
F-Score8
WACC8.48%
ROIC/WACC0.84
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 Y37.02%
EPS Next 2Y31.35%
EPS Next 3Y25.49%
EPS Next 5Y29.81%
Revenue 1Y (TTM)13.51%
Revenue growth 3Y31.74%
Revenue growth 5YN/A
Sales Q2Q%12.55%
Revenue Next Year10.75%
Revenue Next 2Y9.28%
Revenue Next 3Y8.11%
Revenue Next 5Y7.36%
EBIT growth 1Y50.37%
EBIT growth 3Y84.53%
EBIT growth 5YN/A
EBIT Next Year156.1%
EBIT Next 3Y43.42%
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