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. 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.
- Of the past 5 years ARMK 4 years were profitable.
- In the past 5 years ARMK always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 2.45%, ARMK is in line with its industry, outperforming 52.63% of the companies in the same industry.
- ARMK has a Return On Equity of 10.37%. This is in the better half of the industry: ARMK outperforms 70.68% of its industry peers.
- With a Return On Invested Capital value of 5.99%, ARMK perfoms like the industry average, outperforming 56.39% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for ARMK is below the industry average of 10.34%.
- 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
- ARMK's Profit Margin of 1.76% is in line compared 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.
- The Operating Margin of ARMK (4.28%) is worse than 63.16% of its industry peers.
- ARMK's Operating Margin has improved in the last couple of years.
- 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
- ARMK has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- The number of shares outstanding for ARMK has been reduced compared to 1 year ago.
- ARMK has more shares outstanding than it did 5 years ago.
- The debt/assets ratio for ARMK has been reduced compared to a year ago.
2.2 Solvency
- ARMK has an Altman-Z score of 2.24. 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 (2.24) is better than 61.65% of its industry peers.
- 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.
- With a Debt to FCF ratio value of 12.52, ARMK perfoms like the industry average, outperforming 55.64% of the companies in the same industry.
- 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 of 1.71. This is comparable to the rest of the industry: ARMK outperforms 52.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.71 | ||
| Debt/FCF | 12.52 | ||
| Altman-Z | 2.24 |
ROIC/WACC0.94
WACC6.4%
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.
- Looking at the Current ratio, with a value of 0.99, ARMK is in line with its industry, outperforming 53.38% of the companies in the same industry.
- ARMK has a Quick 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 Quick ratio (0.88) which is in line with its industry peers.
| 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.
- ARMK shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.54% yearly.
- 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.
- ARMK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.89% yearly.
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
- ARMK is valuated rather expensively with a Price/Earnings ratio of 21.47.
- 66.92% of the companies in the same industry are more expensive than ARMK, based on the Price/Earnings ratio.
- 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.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of ARMK indicates a somewhat cheap valuation: ARMK is cheaper than 68.42% of the companies listed 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
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARMK is on the same level as its industry peers.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARMK indicates a somewhat cheap valuation: ARMK is cheaper than 68.42% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.8 | ||
| EV/EBITDA | 11.91 |
4.3 Compensation for Growth
- The 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 1.23%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 1.19, ARMK pays a bit more dividend than its industry peers.
- ARMK's Dividend Yield is slightly below the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.23% |
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
- 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.