ARAMARK (ARMK) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARMK - US03852U1060 - Common Stock
38.735 USD
-0.34 (-0.88%)
We assign a fundamental rating of 4 out of 10 to ARMK. ARMK was compared to 132 industry peers in the Hotels, Restaurants & Leisure industry. ARMK has a medium profitability rating, but doesn't score so well on its financial health evaluation. ARMK has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- In the past year ARMK was profitable.
- In the past year ARMK had a positive cash flow from operations.
- Of the past 5 years ARMK 4 years were profitable.
- Each year in the past 5 years ARMK had a positive operating cash flow.
1.2 Ratios
- ARMK has a Return On Assets (2.45%) which is comparable to the rest of the industry.
- ARMK has a Return On Equity of 10.37%. This is in the better half of the industry: ARMK outperforms 70.45% of its industry peers.
- ARMK has a Return On Invested Capital (5.99%) which is comparable to the rest of the industry.
- Measured over the past 3 years, the Average Return On Invested Capital for ARMK is below the industry average of 10.36%.
- The 3 year average ROIC (5.54%) for ARMK is below the current ROIC(5.99%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.45% | ||
| ROE | 10.37% | ||
| ROIC | 5.99% |
ROA(3y)2.84%
ROA(5y)1.83%
ROE(3y)12.39%
ROE(5y)8.04%
ROIC(3y)5.54%
ROIC(5y)4.33%
1.3 Margins
- The Profit Margin of ARMK (1.76%) is comparable to the rest of the industry.
- ARMK's Profit Margin has improved in the last couple of years.
- ARMK's Operating Margin of 4.28% is on the low side compared to the rest of the industry. ARMK is outperformed by 62.88% of its industry peers.
- ARMK's Operating Margin has improved in the last couple of years.
- ARMK's Gross Margin of 8.36% is on the low side compared to the rest of the industry. ARMK is outperformed by 89.39% of its industry peers.
- In the last couple of years the Gross Margin of ARMK has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.28% | ||
| PM (TTM) | 1.76% | ||
| GM | 8.36% |
OM growth 3Y4.57%
OM growth 5YN/A
PM growth 3Y14.07%
PM growth 5YN/A
GM growth 3Y-0.09%
GM growth 5Y6.89%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ARMK is destroying value.
- ARMK has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, ARMK has more shares outstanding
- ARMK has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 2.24 indicates that ARMK is not a great score, but indicates only limited risk for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 2.24, ARMK is in the better half of the industry, outperforming 61.36% of the companies in the same industry.
- The Debt to FCF ratio of ARMK is 12.52, which is on the high side as it means it would take ARMK, 12.52 years of fcf income to pay off all of its debts.
- ARMK has a Debt to FCF ratio of 12.52. This is comparable to the rest of the industry: ARMK outperforms 55.30% of its industry peers.
- ARMK has a Debt/Equity ratio of 1.71. This is a high value indicating a heavy dependency on external financing.
- ARMK has a Debt to Equity ratio (1.71) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.71 | ||
| Debt/FCF | 12.52 | ||
| Altman-Z | 2.24 |
ROIC/WACC0.97
WACC6.21%
2.3 Liquidity
- ARMK has a Current Ratio of 0.99. This is a bad value and indicates that ARMK is not financially healthy enough and could expect problems in meeting its short term obligations.
- ARMK has a Current ratio (0.99) which is comparable to the rest of the industry.
- A Quick Ratio of 0.88 indicates that ARMK may have some problems paying its short term obligations.
- With a Quick ratio value of 0.88, ARMK perfoms like the industry average, outperforming 49.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.99 | ||
| Quick Ratio | 0.88 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 17.42% over the past year.
- Measured over the past years, ARMK shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.54% on average per year.
- ARMK shows a small growth in Revenue. In the last year, the Revenue has grown by 6.35%.
- The Revenue has been growing slightly by 7.60% on average over the past years.
EPS 1Y (TTM)17.42%
EPS 3Y15.54%
EPS 5YN/A
EPS Q2Q%5.56%
Revenue 1Y (TTM)6.35%
Revenue growth 3Y4.26%
Revenue growth 5Y7.6%
Sales Q2Q%14.3%
3.2 Future
- ARMK is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.36% yearly.
- The Revenue is expected to grow by 5.89% on average over the next years.
EPS Next Y23.73%
EPS Next 2Y20.48%
EPS Next 3Y18.56%
EPS Next 5Y14.36%
Revenue Next Year5.84%
Revenue Next 2Y5.89%
Revenue Next 3Y5.96%
Revenue Next 5Y5.89%
3.3 Evolution
- The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
- 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
- With a Price/Earnings ratio of 21.28, ARMK is valued on the expensive side.
- Based on the Price/Earnings ratio, ARMK is valued a bit cheaper than the industry average as 65.91% of the companies are valued more expensively.
- ARMK is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 17.20, which indicates a rather expensive current valuation of ARMK.
- ARMK's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ARMK is cheaper than 70.45% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of ARMK to the average of the S&P500 Index (25.98), we can say ARMK is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.28 | ||
| Fwd PE | 17.2 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as ARMK.
- Based on the Price/Free Cash Flow ratio, ARMK is valued a bit cheaper than the industry average as 68.18% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.59 | ||
| EV/EBITDA | 11.86 |
4.3 Compensation for Growth
- ARMK's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- A more expensive valuation may be justified as ARMK's earnings are expected to grow with 18.56% in the coming years.
PEG (NY)0.9
PEG (5Y)N/A
EPS Next 2Y20.48%
EPS Next 3Y18.56%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.22%, ARMK has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 1.21, ARMK pays a bit more dividend than its industry peers.
- ARMK's Dividend Yield is slightly below the S&P500 average, which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.22% |
5.2 History
- The dividend of ARMK decreases each year by -1.01%.
- ARMK has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-1.01%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- ARMK pays out 33.95% of its income as dividend. This is a sustainable payout ratio.
DP33.95%
EPS Next 2Y20.48%
EPS Next 3Y18.56%
ARAMARK / ARMK FAQ
What is the fundamental rating for ARMK stock?
ChartMill assigns a fundamental rating of 4 / 10 to ARMK.
Can you provide the valuation status for ARAMARK?
ChartMill assigns a valuation rating of 5 / 10 to ARAMARK (ARMK). This can be considered as Fairly Valued.
How profitable is ARAMARK (ARMK) stock?
ARAMARK (ARMK) has a profitability rating of 5 / 10.
What is the valuation of ARAMARK based on its PE and PB ratios?
The Price/Earnings (PE) ratio for ARAMARK (ARMK) is 21.28 and the Price/Book (PB) ratio is 3.24.
What is the earnings growth outlook for ARAMARK?
The Earnings per Share (EPS) of ARAMARK (ARMK) is expected to grow by 23.73% in the next year.