ARAMARK (ARMK) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARMK - US03852U1060 - Common Stock
39.08 USD
-0.25 (-0.64%)
39.406 USD
+0.33 (+0.83%)
Taking everything into account, ARMK scores 4 out of 10 in our fundamental rating. ARMK was compared to 133 industry peers in the Hotels, Restaurants & Leisure industry. While ARMK is still in line with the averages on profitability rating, there are concerns on its financial health. ARMK is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year ARMK was profitable.
- ARMK had a positive operating cash flow in the past year.
- 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 in line with its industry peers.
- ARMK has a better Return On Equity (10.37%) than 70.68% of its industry peers.
- ARMK has a Return On Invested Capital (5.99%) which is in line with its industry peers.
- The Average Return On Invested Capital over the past 3 years for ARMK is below the industry average of 10.34%.
- The last Return On Invested Capital (5.99%) for ARMK is above the 3 year average (5.54%), which is a sign of increasing profitability.
| 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
- ARMK has a Profit Margin of 1.76%. This is comparable to the rest of the industry: ARMK outperforms 46.62% of its industry peers.
- In the last couple of years the Profit Margin of ARMK has grown nicely.
- ARMK has a worse Operating Margin (4.28%) than 63.16% of its industry peers.
- In the last couple of years the Operating Margin of ARMK has grown nicely.
- The Gross Margin of ARMK (8.36%) is worse than 89.47% 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
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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.
- With a decent Altman-Z score value of 2.24, ARMK is doing good in the industry, outperforming 61.65% 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 55.64% of its industry peers.
- A Debt/Equity ratio of 1.71 is on the high side and indicates that ARMK has dependencies on debt financing.
- The Debt to Equity ratio of ARMK (1.71) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.71 | ||
| Debt/FCF | 12.52 | ||
| Altman-Z | 2.24 |
ROIC/WACC0.94
WACC6.39%
2.3 Liquidity
- A Current Ratio of 0.99 indicates that ARMK may have some problems paying 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 49.62% 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.
- The Revenue has been growing slightly by 6.35% in the past year.
- ARMK shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.60% yearly.
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
- The Earnings Per Share is expected to grow by 14.36% on average over the next years. This is quite good.
- The Revenue is expected to grow by 5.89% on average over the next years.
EPS Next Y23.65%
EPS Next 2Y20.3%
EPS Next 3Y18.36%
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
- The Price/Earnings ratio is 21.47, which indicates a rather expensive current valuation of ARMK.
- Based on the Price/Earnings ratio, ARMK is valued a bit cheaper than the industry average as 66.92% of the companies are valued more expensively.
- When comparing the Price/Earnings ratio of ARMK to the average of the S&P500 Index (27.21), we can say ARMK is valued slightly cheaper.
- ARMK is valuated rather expensively with a Price/Forward Earnings ratio of 17.37.
- Based on the Price/Forward Earnings ratio, ARMK is valued a bit cheaper than 68.42% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.26, ARMK is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.47 | ||
| Fwd PE | 17.37 |
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 68.42% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.8 | ||
| EV/EBITDA | 11.91 |
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 18.36% in the coming years.
PEG (NY)0.91
PEG (5Y)N/A
EPS Next 2Y20.3%
EPS Next 3Y18.36%
5. Dividend
5.1 Amount
- ARMK has a Yearly Dividend Yield of 1.22%. Purely for dividend investing, there may be better candidates out there.
- ARMK's Dividend Yield is a higher than the industry average which is at 1.20.
- Compared to the average S&P500 Dividend Yield of 1.81, ARMK is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.22% |
5.2 History
- The dividend of ARMK decreases each year by -1.01%.
- ARMK has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-1.01%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 33.95% of the earnings are spent on dividend by ARMK. This is a low number and sustainable payout ratio.
DP33.95%
EPS Next 2Y20.3%
EPS Next 3Y18.36%
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 21.47 and the Price/Book (PB) ratio is 3.26.
What is the earnings growth outlook for ARAMARK?
The Earnings per Share (EPS) of ARAMARK (ARMK) is expected to grow by 23.65% in the next year.