ARAMARK (ARMK) Stock Fundamental Analysis
NYSE:ARMK - New York Stock Exchange, Inc. - US03852U1060 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to ARMK. ARMK was compared to 136 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 correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
ARMK had positive earnings in the past year.
In the past year ARMK had a positive cash flow from operations.
In multiple years ARMK reported negative net income over the last 5 years.
In the past 5 years ARMK always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of ARMK (2.67%) is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 11.02%, ARMK is in the better half of the industry, outperforming 70.59% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 6.21%, ARMK is in line with its industry, outperforming 54.41% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ARMK is significantly below the industry average of 15.69%.
The 3 year average ROIC (4.93%) for ARMK is below the current ROIC(6.21%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.67% | ||
| ROE | 11.02% | ||
| ROIC | 6.21% |
ROA(3y)2.45%
ROA(5y)0.76%
ROE(3y)11.07%
ROE(5y)2.59%
ROIC(3y)4.93%
ROIC(5y)N/A
1.3 Margins
ARMK's Profit Margin of 1.94% is in line compared to the rest of the industry. ARMK outperforms 47.79% of its industry peers.
In the last couple of years the Profit Margin of ARMK has declined.
With a Operating Margin value of 4.31%, ARMK is not doing good in the industry: 66.18% of the companies in the same industry are doing better.
ARMK's Operating Margin has been stable in the last couple of years.
ARMK has a Gross Margin of 8.34%. This is amonst the worse of the industry: ARMK underperforms 89.71% of its industry peers.
In the last couple of years the Gross Margin of ARMK has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.31% | ||
| PM (TTM) | 1.94% | ||
| GM | 8.34% |
OM growth 3Y40.47%
OM growth 5Y-1.21%
PM growth 3YN/A
PM growth 5Y-11.42%
GM growth 3Y5.79%
GM growth 5Y8.33%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ARMK is destroying value.
The number of shares outstanding for ARMK has been increased compared to 1 year ago.
ARMK has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ARMK has an improved debt to assets ratio.
2.2 Solvency
ARMK has an Altman-Z score of 2.12. This is not the best score and indicates that ARMK is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of ARMK (2.12) is better than 64.71% of its industry peers.
The Debt to FCF ratio of ARMK is 16.23, which is on the high side as it means it would take ARMK, 16.23 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 16.23, ARMK is in line with its industry, outperforming 48.53% of the companies in the same industry.
ARMK has a Debt/Equity ratio of 1.61. This is a high value indicating a heavy dependency on external financing.
ARMK has a Debt to Equity ratio (1.61) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.61 | ||
| Debt/FCF | 16.23 | ||
| Altman-Z | 2.12 |
ROIC/WACC0.99
WACC6.29%
2.3 Liquidity
ARMK has a Current Ratio of 0.94. This is a bad value and indicates that ARMK is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of ARMK (0.94) is comparable to the rest of the industry.
ARMK has a Quick Ratio of 0.94. 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's Quick ratio of 0.84 is in line compared to the rest of the industry. ARMK outperforms 50.74% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.84 |
3. Growth
3.1 Past
ARMK shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.37%.
ARMK shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.10% yearly.
The Revenue has been growing slightly by 1.54% in the past year.
The Revenue has been growing slightly by 1.41% on average over the past years.
EPS 1Y (TTM)-2.37%
EPS 3YN/A
EPS 5Y-7.1%
EPS Q2Q%24.39%
Revenue 1Y (TTM)1.54%
Revenue growth 3Y12.89%
Revenue growth 5Y1.41%
Sales Q2Q%3.27%
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 15.18% yearly.
Based on estimates for the next years, ARMK will show a small growth in Revenue. The Revenue will grow by 6.62% on average per year.
EPS Next Y25.85%
EPS Next 2Y22.02%
EPS Next 3Y20.07%
EPS Next 5Y15.18%
Revenue Next Year7.05%
Revenue Next 2Y6.06%
Revenue Next 3Y5.83%
Revenue Next 5Y6.62%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 19.06, ARMK is valued on the expensive side.
Based on the Price/Earnings ratio, ARMK is valued a bit cheaper than the industry average as 66.91% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of ARMK to the average of the S&P500 Index (28.29), we can say ARMK is valued slightly cheaper.
A Price/Forward Earnings ratio of 13.63 indicates a correct valuation of ARMK.
Based on the Price/Forward Earnings ratio, ARMK is valued a bit cheaper than the industry average as 79.41% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 21.32. ARMK is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.06 | ||
| Fwd PE | 13.63 |
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 66.91% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.86 | ||
| EV/EBITDA | 11.64 |
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.
ARMK's earnings are expected to grow with 20.07% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.74
PEG (5Y)N/A
EPS Next 2Y22.02%
EPS Next 3Y20.07%
5. Dividend
5.1 Amount
ARMK has a Yearly Dividend Yield of 1.31%. 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 3.92.
Compared to an average S&P500 Dividend Yield of 2.51, ARMK's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
5.2 History
The dividend of ARMK decreases each year by -2.79%.
ARMK has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-2.79%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
ARMK pays out 30.28% of its income as dividend. This is a sustainable payout ratio.
DP30.28%
EPS Next 2Y22.02%
EPS Next 3Y20.07%
31.45
-0.72 (-2.24%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners106%
Inst Owner Change0.08%
Ins Owners0.52%
Ins Owner Change0.1%
Market Cap8.34B
Analysts81.9
Price Target45.53 (44.77%)
Short Float %1.89%
Short Ratio2.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
Yearly Dividend0.38
Dividend Growth(5Y)-2.79%
DP30.28%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.7%
Min EPS beat(2)-0.77%
Max EPS beat(2)4.17%
EPS beat(4)3
Avg EPS beat(4)2.47%
Min EPS beat(4)-0.77%
Max EPS beat(4)5.93%
EPS beat(8)6
Avg EPS beat(8)3.44%
EPS beat(12)7
Avg EPS beat(12)1.98%
EPS beat(16)10
Avg EPS beat(16)10.24%
Revenue beat(2)0
Avg Revenue beat(2)-3.17%
Min Revenue beat(2)-3.35%
Max Revenue beat(2)-2.99%
Revenue beat(4)0
Avg Revenue beat(4)-2.42%
Min Revenue beat(4)-3.35%
Max Revenue beat(4)-0.5%
Revenue beat(8)4
Avg Revenue beat(8)-0.53%
Revenue beat(12)7
Avg Revenue beat(12)-0.73%
Revenue beat(16)10
Avg Revenue beat(16)-0.33%
PT rev (1m)0.16%
PT rev (3m)0.64%
EPS NQ rev (1m)-0.39%
EPS NQ rev (3m)-11.38%
EPS NY rev (1m)-0.1%
EPS NY rev (3m)-1.06%
Revenue NQ rev (1m)-0.07%
Revenue NQ rev (3m)-2.14%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)-0.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.06 | ||
| Fwd PE | 13.63 | ||
| P/S | 0.48 | ||
| P/FCF | 22.86 | ||
| P/OCF | 10.47 | ||
| P/B | 2.71 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.64 |
EPS(TTM)1.65
EY5.25%
EPS(NY)2.31
Fwd EY7.34%
FCF(TTM)1.38
FCFY4.38%
OCF(TTM)3
OCFY9.55%
SpS66.18
BVpS11.63
TBVpS-13.04
PEG (NY)0.74
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.67% | ||
| ROE | 11.02% | ||
| ROCE | 8.22% | ||
| ROIC | 6.21% | ||
| ROICexc | 6.55% | ||
| ROICexgc | 26.16% | ||
| OM | 4.31% | ||
| PM (TTM) | 1.94% | ||
| GM | 8.34% | ||
| FCFM | 2.08% |
ROA(3y)2.45%
ROA(5y)0.76%
ROE(3y)11.07%
ROE(5y)2.59%
ROIC(3y)4.93%
ROIC(5y)N/A
ROICexc(3y)5.48%
ROICexc(5y)N/A
ROICexgc(3y)26.7%
ROICexgc(5y)N/A
ROCE(3y)6.53%
ROCE(5y)N/A
ROICexcg growth 3Y122.06%
ROICexcg growth 5Y20.87%
ROICexc growth 3Y78.16%
ROICexc growth 5Y7.03%
OM growth 3Y40.47%
OM growth 5Y-1.21%
PM growth 3YN/A
PM growth 5Y-11.42%
GM growth 3Y5.79%
GM growth 5Y8.33%
F-Score4
Asset Turnover1.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.61 | ||
| Debt/FCF | 16.23 | ||
| Debt/EBITDA | 4.15 | ||
| Cap/Depr | 97.4% | ||
| Cap/Sales | 2.46% | ||
| Interest Coverage | -16.49 | ||
| Cash Conversion | 66.37% | ||
| Profit Quality | 107.41% | ||
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.84 | ||
| Altman-Z | 2.12 |
F-Score4
WACC6.29%
ROIC/WACC0.99
Cap/Depr(3y)88.23%
Cap/Depr(5y)81.81%
Cap/Sales(3y)2.41%
Cap/Sales(5y)2.77%
Profit Quality(3y)109.5%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-2.37%
EPS 3YN/A
EPS 5Y-7.1%
EPS Q2Q%24.39%
EPS Next Y25.85%
EPS Next 2Y22.02%
EPS Next 3Y20.07%
EPS Next 5Y15.18%
Revenue 1Y (TTM)1.54%
Revenue growth 3Y12.89%
Revenue growth 5Y1.41%
Sales Q2Q%3.27%
Revenue Next Year7.05%
Revenue Next 2Y6.06%
Revenue Next 3Y5.83%
Revenue Next 5Y6.62%
EBIT growth 1Y7.7%
EBIT growth 3Y58.57%
EBIT growth 5Y0.18%
EBIT Next Year60.28%
EBIT Next 3Y24.37%
EBIT Next 5Y16.69%
FCF growth 1Y94.96%
FCF growth 3Y6.26%
FCF growth 5Y-9.07%
OCF growth 1Y34.83%
OCF growth 3Y3.4%
OCF growth 5Y-5.89%