ARKO CORP (ARKO) Stock Fundamental Analysis
NASDAQ:ARKO - Nasdaq - US0412421085 - Common Stock - Currency: USD
Overall ARKO gets a fundamental rating of 3 out of 10. We evaluated ARKO against 121 industry peers in the Specialty Retail industry. ARKO has only an average score on both its financial health and profitability. ARKO does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
ARKO had positive earnings in the past year.
ARKO had a positive operating cash flow in the past year.
ARKO had positive earnings in each of the past 5 years.
Each year in the past 5 years ARKO had a positive operating cash flow.
1.2 Ratios
ARKO has a Return On Assets of 0.42%. This is comparable to the rest of the industry: ARKO outperforms 49.59% of its industry peers.
Looking at the Return On Equity, with a value of 4.01%, ARKO is in the better half of the industry, outperforming 61.98% of the companies in the same industry.
The Return On Invested Capital of ARKO (2.78%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for ARKO is significantly below the industry average of 13.57%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.42% | ||
| ROE | 4.01% | ||
| ROIC | 2.78% |
ROA(3y)1.08%
ROA(5y)1.09%
ROE(3y)9.65%
ROE(5y)9.47%
ROIC(3y)3.6%
ROIC(5y)3.52%
1.3 Margins
The Profit Margin of ARKO (0.17%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of ARKO has declined.
The Operating Margin of ARKO (1.34%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of ARKO has grown nicely.
The Gross Margin of ARKO (14.57%) is worse than 88.43% of its industry peers.
In the last couple of years the Gross Margin of ARKO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.34% | ||
| PM (TTM) | 0.17% | ||
| GM | 14.57% |
OM growth 3Y-11.32%
OM growth 5Y111.61%
PM growth 3Y-37.88%
PM growth 5YN/A
GM growth 3Y2.7%
GM growth 5Y-1.33%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ARKO is destroying value.
Compared to 1 year ago, ARKO has less shares outstanding
The number of shares outstanding for ARKO has been reduced compared to 5 years ago.
Compared to 1 year ago, ARKO has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.74 indicates that ARKO is not a great score, but indicates only limited risk for bankruptcy at the moment.
ARKO has a Altman-Z score of 2.74. This is in the better half of the industry: ARKO outperforms 64.46% of its industry peers.
The Debt to FCF ratio of ARKO is 10.22, which is on the high side as it means it would take ARKO, 10.22 years of fcf income to pay off all of its debts.
ARKO's Debt to FCF ratio of 10.22 is in line compared to the rest of the industry. ARKO outperforms 50.41% of its industry peers.
A Debt/Equity ratio of 2.86 is on the high side and indicates that ARKO has dependencies on debt financing.
With a Debt to Equity ratio value of 2.86, ARKO is not doing good in the industry: 71.90% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.86 | ||
| Debt/FCF | 10.22 | ||
| Altman-Z | 2.74 |
ROIC/WACC0.29
WACC9.41%
2.3 Liquidity
A Current Ratio of 1.62 indicates that ARKO should not have too much problems paying its short term obligations.
ARKO's Current ratio of 1.62 is fine compared to the rest of the industry. ARKO outperforms 67.77% of its industry peers.
A Quick Ratio of 1.10 indicates that ARKO should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.10, ARKO is in the better half of the industry, outperforming 76.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.62 | ||
| Quick Ratio | 1.1 |
3. Growth
3.1 Past
ARKO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -48.00%.
Measured over the past years, ARKO shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -33.40% on average per year.
Looking at the last year, ARKO shows a decrease in Revenue. The Revenue has decreased by -7.23% in the last year.
ARKO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.16% yearly.
EPS 1Y (TTM)-48%
EPS 3Y-33.4%
EPS 5YN/A
EPS Q2Q%-909.37%
Revenue 1Y (TTM)-7.23%
Revenue growth 3Y5.59%
Revenue growth 5Y16.16%
Sales Q2Q%-10.79%
3.2 Future
Based on estimates for the next years, ARKO will show a very negative growth in Earnings Per Share. The EPS will decrease by -19.06% on average per year.
The Revenue is expected to decrease by -3.82% on average over the next years.
EPS Next Y-64.69%
EPS Next 2Y-62.94%
EPS Next 3Y-38.26%
EPS Next 5Y-19.06%
Revenue Next Year-10.64%
Revenue Next 2Y-5.95%
Revenue Next 3Y-4.42%
Revenue Next 5Y-3.82%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last 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 32.69, the valuation of ARKO can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of ARKO is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 28.33, ARKO is valued at the same level.
ARKO is valuated quite expensively with a Price/Forward Earnings ratio of 92.59.
62.81% of the companies in the same industry are cheaper than ARKO, based on the Price/Forward Earnings ratio.
ARKO's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.69 | ||
| Fwd PE | 92.59 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARKO is valued a bit cheaper than the industry average as 76.03% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ARKO is valued cheaper than 93.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.56 | ||
| EV/EBITDA | 5.3 |
4.3 Compensation for Growth
A cheap valuation may be justified as ARKO's earnings are expected to decrease with -38.26% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-62.94%
EPS Next 3Y-38.26%
5. Dividend
5.1 Amount
ARKO has a Yearly Dividend Yield of 2.93%. Purely for dividend investing, there may be better candidates out there.
In the last 3 months the price of ARKO has falen by -39.54%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 5.62, ARKO pays a better dividend. On top of this ARKO pays more dividend than 85.12% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.51, ARKO has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.93% |
5.2 History
ARKO 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 Years2
5.3 Sustainability
130.94% of the earnings are spent on dividend by ARKO. This is not a sustainable payout ratio.
DP130.94%
EPS Next 2Y-62.94%
EPS Next 3Y-38.26%
4.25
+0.03 (+0.71%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners56.23%
Inst Owner Change0.19%
Ins Owners11.06%
Ins Owner Change1.46%
Market Cap492.02M
Analysts78
Price Target7.46 (75.53%)
Short Float %3.36%
Short Ratio3.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.93% |
Yearly Dividend0.17
Dividend Growth(5Y)N/A
DP130.94%
Div Incr Years1
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-266.87%
Min EPS beat(2)-492.16%
Max EPS beat(2)-41.59%
EPS beat(4)2
Avg EPS beat(4)-90.89%
Min EPS beat(4)-492.16%
Max EPS beat(4)90.44%
EPS beat(8)3
Avg EPS beat(8)-79.19%
EPS beat(12)4
Avg EPS beat(12)-60.17%
EPS beat(16)6
Avg EPS beat(16)-43.76%
Revenue beat(2)0
Avg Revenue beat(2)-7.86%
Min Revenue beat(2)-8.37%
Max Revenue beat(2)-7.35%
Revenue beat(4)0
Avg Revenue beat(4)-4.7%
Min Revenue beat(4)-8.37%
Max Revenue beat(4)-0.82%
Revenue beat(8)2
Avg Revenue beat(8)-3.63%
Revenue beat(12)4
Avg Revenue beat(12)-2.79%
Revenue beat(16)6
Avg Revenue beat(16)-2.28%
PT rev (1m)0%
PT rev (3m)-7.87%
EPS NQ rev (1m)-52.27%
EPS NQ rev (3m)-86.11%
EPS NY rev (1m)-78.57%
EPS NY rev (3m)-78.05%
Revenue NQ rev (1m)-1.67%
Revenue NQ rev (3m)-9.3%
Revenue NY rev (1m)-0.91%
Revenue NY rev (3m)-6.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.69 | ||
| Fwd PE | 92.59 | ||
| P/S | 0.06 | ||
| P/FCF | 4.56 | ||
| P/OCF | 2.22 | ||
| P/B | 1.31 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.3 |
EPS(TTM)0.13
EY3.06%
EPS(NY)0.05
Fwd EY1.08%
FCF(TTM)0.93
FCFY21.94%
OCF(TTM)1.92
OCFY45.09%
SpS75.43
BVpS3.26
TBVpS-0.91
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.42% | ||
| ROE | 4.01% | ||
| ROCE | 3.67% | ||
| ROIC | 2.78% | ||
| ROICexc | 3.03% | ||
| ROICexgc | 3.63% | ||
| OM | 1.34% | ||
| PM (TTM) | 0.17% | ||
| GM | 14.57% | ||
| FCFM | 1.24% |
ROA(3y)1.08%
ROA(5y)1.09%
ROE(3y)9.65%
ROE(5y)9.47%
ROIC(3y)3.6%
ROIC(5y)3.52%
ROICexc(3y)3.95%
ROICexc(5y)3.92%
ROICexgc(3y)4.74%
ROICexgc(5y)4.74%
ROCE(3y)4.76%
ROCE(5y)4.66%
ROICexcg growth 3Y-14.62%
ROICexcg growth 5Y117.5%
ROICexc growth 3Y-14.39%
ROICexc growth 5Y114.59%
OM growth 3Y-11.32%
OM growth 5Y111.61%
PM growth 3Y-37.88%
PM growth 5YN/A
GM growth 3Y2.7%
GM growth 5Y-1.33%
F-Score6
Asset Turnover2.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.86 | ||
| Debt/FCF | 10.22 | ||
| Debt/EBITDA | 4.33 | ||
| Cap/Depr | 86.03% | ||
| Cap/Sales | 1.3% | ||
| Interest Coverage | 1.27 | ||
| Cash Conversion | 89.08% | ||
| Profit Quality | 715.1% | ||
| Current Ratio | 1.62 | ||
| Quick Ratio | 1.1 | ||
| Altman-Z | 2.74 |
F-Score6
WACC9.41%
ROIC/WACC0.29
Cap/Depr(3y)90.08%
Cap/Depr(5y)112.67%
Cap/Sales(3y)1.19%
Cap/Sales(5y)1.55%
Profit Quality(3y)323.16%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-48%
EPS 3Y-33.4%
EPS 5YN/A
EPS Q2Q%-909.37%
EPS Next Y-64.69%
EPS Next 2Y-62.94%
EPS Next 3Y-38.26%
EPS Next 5Y-19.06%
Revenue 1Y (TTM)-7.23%
Revenue growth 3Y5.59%
Revenue growth 5Y16.16%
Sales Q2Q%-10.79%
Revenue Next Year-10.64%
Revenue Next 2Y-5.95%
Revenue Next 3Y-4.42%
Revenue Next 5Y-3.82%
EBIT growth 1Y-22.22%
EBIT growth 3Y-6.37%
EBIT growth 5Y145.8%
EBIT Next Year136.76%
EBIT Next 3Y34.49%
EBIT Next 5Y17.52%
FCF growth 1Y333.77%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y63.02%
OCF growth 3Y11.7%
OCF growth 5Y38.65%