ARIS WATER SOLUTIONS INC-A (ARIS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARIS - US04041L1061 - Common Stock
23.69 USD
+0.24 (+1.02%)
23.6 USD
-0.09 (-0.38%)
Overall ARIS gets a fundamental rating of 4 out of 10. We evaluated ARIS against 61 industry peers in the Energy Equipment & Services industry. There are concerns on the financial health of ARIS while its profitability can be described as average. ARIS has a decent growth rate and is not valued too expensively.
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.
- Each year in the past 5 years ARIS had a positive operating cash flow.
1.2 Ratios
- ARIS has a worse Return On Assets (1.88%) than 60.66% of its industry peers.
- Looking at the Return On Equity, with a value of 7.65%, ARIS is in line with its industry, outperforming 57.38% of the companies in the same industry.
- ARIS's Return On Invested Capital of 7.39% is fine compared to the rest of the industry. ARIS outperforms 65.57% of its industry peers.
- ARIS had an Average Return On Invested Capital over the past 3 years of 5.83%. This is significantly below the industry average of 12.92%.
- The 3 year average ROIC (5.83%) for ARIS is below the current ROIC(7.39%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.88% | ||
| ROE | 7.65% | ||
| ROIC | 7.39% |
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 (5.61%) which is in line with its industry peers.
- In the last couple of years the Profit Margin of ARIS has declined.
- ARIS has a better Operating Margin (23.95%) than 90.16% of its industry peers.
- In the last couple of years the Operating Margin of ARIS has grown nicely.
- ARIS has a Gross Margin of 39.67%. This is in the better half of the industry: ARIS outperforms 78.69% of its industry peers.
- In the last couple of years the Gross Margin of ARIS has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.95% | ||
| PM (TTM) | 5.61% | ||
| GM | 39.67% |
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.
- Compared to 1 year ago, ARIS has more shares outstanding
- Compared to 5 years ago, ARIS has more shares outstanding
- The debt/assets ratio for ARIS has been reduced compared to a year ago.
2.2 Solvency
- ARIS has an Altman-Z score of 1.42. This is a bad value and indicates that ARIS is not financially healthy and even has some risk of bankruptcy.
- With a Altman-Z score value of 1.42, ARIS is not doing good in the industry: 65.57% of the companies in the same industry are doing better.
- The Debt to FCF ratio of ARIS is 4.38, which is a neutral value as it means it would take ARIS, 4.38 years of fcf income to pay off all of its debts.
- ARIS's Debt to FCF ratio of 4.38 is in line compared to the rest of the industry. ARIS outperforms 50.82% 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.
- The Debt to Equity ratio of ARIS (1.27) is worse than 81.97% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.27 | ||
| Debt/FCF | 4.38 | ||
| Altman-Z | 1.42 |
ROIC/WACC0.83
WACC8.89%
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.
- ARIS's Current ratio of 1.22 is on the low side compared to the rest of the industry. ARIS is outperformed by 83.61% of its industry peers.
- 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.
- The Quick ratio of ARIS (1.22) is worse than 67.21% 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 16.96%, which is quite good.
- 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 16.42% 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)16.96%
EPS 3YN/A
EPS 5Y27.41%
EPS Q2Q%13.79%
Revenue 1Y (TTM)16.42%
Revenue growth 3Y23.83%
Revenue growth 5Y29.67%
Sales Q2Q%22.72%
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 19.34% on average per year.
- The Revenue is expected to grow by 6.30% on average over the next years.
EPS Next Y16.05%
EPS Next 2Y10.24%
EPS Next 3Y15.21%
EPS Next 5Y19.34%
Revenue Next Year13.96%
Revenue Next 2Y8.75%
Revenue Next 3Y8.08%
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.
- 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 18.08, the valuation of ARIS can be described as rather expensive.
- Based on the Price/Earnings ratio, ARIS is valued a bit cheaper than the industry average as 60.66% of the companies are valued more expensively.
- ARIS is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 15.47, ARIS is valued correctly.
- ARIS's Price/Forward Earnings ratio is in line with the industry average.
- ARIS is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.08 | ||
| Fwd PE | 15.47 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARIS indicates a slightly more expensive valuation: ARIS is more expensive than 72.13% of the companies listed in the same industry.
- ARIS's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.62 | ||
| EV/EBITDA | 9.42 |
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.
- ARIS's earnings are expected to grow with 15.21% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.13
PEG (5Y)0.66
EPS Next 2Y10.24%
EPS Next 3Y15.21%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.36%, ARIS has a reasonable but not impressive dividend return.
- ARIS's Dividend Yield is a higher than the industry average which is at 1.14.
- ARIS's Dividend Yield is a higher than the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.36% |
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
- ARIS pays out 111.96% of its income as dividend. This is not a sustainable payout ratio.
DP111.96%
EPS Next 2Y10.24%
EPS Next 3Y15.21%
ARIS WATER SOLUTIONS INC-A / ARIS FAQ
Can you provide the ChartMill fundamental rating for ARIS WATER SOLUTIONS INC-A?
ChartMill assigns a fundamental rating of 4 / 10 to ARIS.
What is the valuation status for ARIS stock?
ChartMill assigns a valuation rating of 4 / 10 to ARIS WATER SOLUTIONS INC-A (ARIS). This can be considered as Fairly Valued.
How profitable is ARIS WATER SOLUTIONS INC-A (ARIS) stock?
ARIS WATER SOLUTIONS INC-A (ARIS) has a profitability rating of 6 / 10.
Can you provide the expected EPS growth for ARIS stock?
The Earnings per Share (EPS) of ARIS WATER SOLUTIONS INC-A (ARIS) is expected to grow by 16.05% in the next year.
How sustainable is the dividend of ARIS WATER SOLUTIONS INC-A (ARIS) stock?
The dividend rating of ARIS WATER SOLUTIONS INC-A (ARIS) is 2 / 10 and the dividend payout ratio is 111.96%.