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 135 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 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.
ARMK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of ARMK (2.67%) is comparable to the rest of the industry.
The Return On Equity of ARMK (11.02%) is better than 69.47% of its industry peers.
ARMK has a Return On Invested Capital (6.21%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for ARMK is significantly below the industry average of 16.08%.
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 has a Profit Margin (1.94%) which is comparable to the rest of the industry.
ARMK's Profit Margin has declined in the last couple of years.
The Operating Margin of ARMK (4.31%) is worse than 65.65% of its industry peers.
ARMK's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 8.34%, ARMK is doing worse than 92.37% of the companies in the same industry.
ARMK's Gross Margin has improved in the last couple of years.
| 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.
ARMK has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, ARMK has more shares outstanding
Compared to 1 year ago, ARMK has an improved debt to assets ratio.
2.2 Solvency
ARMK has an Altman-Z score of 2.21. 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.
ARMK has a Altman-Z score of 2.21. This is in the better half of the industry: ARMK outperforms 62.60% of its industry peers.
ARMK has a debt to FCF ratio of 16.23. This is a negative value and a sign of low solvency as ARMK would need 16.23 years to pay back of all of its debts.
ARMK's Debt to FCF ratio of 16.23 is in line compared to the rest of the industry. ARMK outperforms 47.33% of its industry peers.
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 in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.61 | ||
| Debt/FCF | 16.23 | ||
| Altman-Z | 2.21 |
ROIC/WACC0.88
WACC7.04%
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.
Looking at the Current ratio, with a value of 0.94, ARMK is in line with its industry, outperforming 54.20% of the companies in the same industry.
A Quick Ratio of 0.84 indicates that ARMK may have some problems paying its short term obligations.
ARMK has a Quick ratio (0.84) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.84 |
3. Growth
3.1 Past
The earnings per share for ARMK have decreased by -2.37% in the last year.
ARMK shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.10% yearly.
ARMK shows a small growth in Revenue. In the last year, the Revenue has grown by 1.54%.
Measured over the past years, ARMK shows a small growth in Revenue. The Revenue has been growing by 1.41% on average per year.
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
Based on estimates for the next years, ARMK will show a very strong growth in Earnings Per Share. The EPS will grow by 23.89% on average per year.
ARMK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.43% yearly.
EPS Next Y25.99%
EPS Next 2Y21.34%
EPS Next 3Y19.32%
EPS Next 5Y23.89%
Revenue Next Year6.98%
Revenue Next 2Y5.77%
Revenue Next 3Y5.59%
Revenue Next 5Y6.43%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 21.83 indicates a rather expensive valuation of ARMK.
ARMK's Price/Earnings ratio is a bit cheaper when compared to the industry. ARMK is cheaper than 65.65% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 29.75. ARMK is valued slightly cheaper when compared to this.
ARMK is valuated correctly with a Price/Forward Earnings ratio of 15.78.
Based on the Price/Forward Earnings ratio, ARMK is valued a bit cheaper than the industry average as 77.10% of the companies are valued more expensively.
ARMK's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.83 | ||
| Fwd PE | 15.78 |
4.2 Price Multiples
ARMK's Enterprise Value to EBITDA ratio is in line with the industry average.
ARMK's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ARMK is cheaper than 67.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.18 | ||
| EV/EBITDA | 12.71 |
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 19.32% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.84
PEG (5Y)N/A
EPS Next 2Y21.34%
EPS Next 3Y19.32%
5. Dividend
5.1 Amount
ARMK has a Yearly Dividend Yield of 1.15%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.18, ARMK pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.30, ARMK's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.15% |
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
30.28% of the earnings are spent on dividend by ARMK. This is a low number and sustainable payout ratio.
DP30.28%
EPS Next 2Y21.34%
EPS Next 3Y19.32%
36.02
-1.03 (-2.78%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners106%
Inst Owner Change2.18%
Ins Owners0.52%
Ins Owner Change0.1%
Market Cap9.55B
Analysts81
Price Target45.19 (25.46%)
Short Float %1.59%
Short Ratio2.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.15% |
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)-0.19%
PT rev (3m)2.87%
EPS NQ rev (1m)-8.33%
EPS NQ rev (3m)-8.08%
EPS NY rev (1m)-1.03%
EPS NY rev (3m)-0.45%
Revenue NQ rev (1m)-1.72%
Revenue NQ rev (3m)-1.92%
Revenue NY rev (1m)-0.39%
Revenue NY rev (3m)-0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.83 | ||
| Fwd PE | 15.78 | ||
| P/S | 0.54 | ||
| P/FCF | 26.18 | ||
| P/OCF | 11.99 | ||
| P/B | 3.1 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.71 |
EPS(TTM)1.65
EY4.58%
EPS(NY)2.28
Fwd EY6.34%
FCF(TTM)1.38
FCFY3.82%
OCF(TTM)3
OCFY8.34%
SpS66.18
BVpS11.63
TBVpS-13.04
PEG (NY)0.84
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 | 2.21 |
F-Score4
WACC7.04%
ROIC/WACC0.88
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 Y25.99%
EPS Next 2Y21.34%
EPS Next 3Y19.32%
EPS Next 5Y23.89%
Revenue 1Y (TTM)1.54%
Revenue growth 3Y12.89%
Revenue growth 5Y1.41%
Sales Q2Q%3.27%
Revenue Next Year6.98%
Revenue Next 2Y5.77%
Revenue Next 3Y5.59%
Revenue Next 5Y6.43%
EBIT growth 1Y7.7%
EBIT growth 3Y58.57%
EBIT growth 5Y0.18%
EBIT Next Year61.17%
EBIT Next 3Y24.39%
EBIT Next 5Y16.5%
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%