EMBRAER SA-SPON ADR (ERJ) Stock Fundamental Analysis
NYSE:ERJ - New York Stock Exchange, Inc. - US29082A1079 - ADR - Currency: USD
Taking everything into account, ERJ scores 4 out of 10 in our fundamental rating. ERJ was compared to 65 industry peers in the Aerospace & Defense industry. There are concerns on the financial health of ERJ while its profitability can be described as average. ERJ is valued quite expensive, but it does show an excellent growth.
1. Profitability
1.1 Basic Checks
ERJ had positive earnings in the past year.
ERJ had a positive operating cash flow in the past year.
In the past 5 years ERJ reported 4 times negative net income.
ERJ had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
ERJ has a Return On Assets of 4.09%. This is comparable to the rest of the industry: ERJ outperforms 53.85% of its industry peers.
Looking at the Return On Equity, with a value of 15.22%, ERJ belongs to the top of the industry, outperforming 81.54% of the companies in the same industry.
The Return On Invested Capital of ERJ (5.60%) is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for ERJ is significantly below the industry average of 7.99%.
The last Return On Invested Capital (5.60%) for ERJ is above the 3 year average (2.58%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.09% | ||
| ROE | 15.22% | ||
| ROIC | 5.6% |
ROA(3y)-0.26%
ROA(5y)-2.1%
ROE(3y)-1.05%
ROE(5y)-7.46%
ROIC(3y)2.58%
ROIC(5y)N/A
1.3 Margins
The Profit Margin of ERJ (8.27%) is better than 70.77% of its industry peers.
ERJ's Operating Margin of 9.23% is fine compared to the rest of the industry. ERJ outperforms 61.54% of its industry peers.
ERJ has a worse Gross Margin (17.43%) than 69.23% of its industry peers.
ERJ's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.23% | ||
| PM (TTM) | 8.27% | ||
| GM | 17.43% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y12.04%
GM growth 5Y13.63%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ERJ is destroying value.
ERJ has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for ERJ remains at a similar level compared to 5 years ago.
The debt/assets ratio for ERJ has been reduced compared to a year ago.
2.2 Solvency
ERJ has an Altman-Z score of 1.58. This is a bad value and indicates that ERJ is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 1.58, ERJ is not doing good in the industry: 72.31% of the companies in the same industry are doing better.
The Debt to FCF ratio of ERJ is 26.50, which is on the high side as it means it would take ERJ, 26.50 years of fcf income to pay off all of its debts.
ERJ has a Debt to FCF ratio of 26.50. This is comparable to the rest of the industry: ERJ outperforms 50.77% of its industry peers.
A Debt/Equity ratio of 0.84 indicates that ERJ is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.84, ERJ is not doing good in the industry: 70.77% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.84 | ||
| Debt/FCF | 26.5 | ||
| Altman-Z | 1.58 |
ROIC/WACC0.38
WACC14.92%
2.3 Liquidity
ERJ has a Current Ratio of 1.56. This is a normal value and indicates that ERJ is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.56, ERJ is doing worse than 63.08% of the companies in the same industry.
ERJ has a Quick Ratio of 1.56. This is a bad value and indicates that ERJ is not financially healthy enough and could expect problems in meeting its short term obligations.
ERJ has a Quick ratio of 0.76. This is in the lower half of the industry: ERJ underperforms 76.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.56 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
ERJ shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 6450.81%, which is quite impressive.
ERJ shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.03%.
The Revenue has been growing by 27.05% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)6450.81%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%650%
Revenue 1Y (TTM)17.03%
Revenue growth 3Y9.95%
Revenue growth 5Y27.05%
Sales Q2Q%31.77%
3.2 Future
Based on estimates for the next years, ERJ will show a very strong growth in Earnings Per Share. The EPS will grow by 165.51% on average per year.
Based on estimates for the next years, ERJ will show a very strong growth in Revenue. The Revenue will grow by 72.65% on average per year.
EPS Next Y1312.47%
EPS Next 2Y266.22%
EPS Next 3Y165.51%
EPS Next 5YN/A
Revenue Next Year13.52%
Revenue Next 2Y15.19%
Revenue Next 3Y14.37%
Revenue Next 5Y72.65%
3.3 Evolution
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 155.53, ERJ can be considered very expensive at the moment.
Based on the Price/Earnings ratio, ERJ is valued a bit more expensive than 60.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 29.71. ERJ is valued rather expensively when compared to this.
With a Price/Forward Earnings ratio of 61.06, ERJ can be considered very expensive at the moment.
The rest of the industry has a similar Price/Forward Earnings ratio as ERJ.
The average S&P500 Price/Forward Earnings ratio is at 22.34. ERJ is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 155.53 | ||
| Fwd PE | 61.06 |
4.2 Price Multiples
ERJ's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ERJ is cheaper than 78.46% of the companies in the same industry.
ERJ's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 100.76 | ||
| EV/EBITDA | 13.63 |
4.3 Compensation for Growth
ERJ's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ERJ's earnings are expected to grow with 165.51% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.12
PEG (5Y)N/A
EPS Next 2Y266.22%
EPS Next 3Y165.51%
5. Dividend
5.1 Amount
No dividends for ERJ!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
52.88
+3 (+6.01%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners47.87%
Inst Owner Change4.38%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap9.71B
Analysts77.33
Price Target41.24 (-22.01%)
Short Float %1.52%
Short Ratio1.94
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0.06
Dividend Growth(5Y)-7.73%
DP2.56%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-9.56%
Min EPS beat(2)-22.39%
Max EPS beat(2)3.26%
EPS beat(4)2
Avg EPS beat(4)-5%
Min EPS beat(4)-74.8%
Max EPS beat(4)73.93%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)1.75%
Min Revenue beat(2)-0.39%
Max Revenue beat(2)3.89%
Revenue beat(4)2
Avg Revenue beat(4)-0.64%
Min Revenue beat(4)-7.01%
Max Revenue beat(4)3.89%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)7.85%
EPS NQ rev (1m)0%
EPS NQ rev (3m)7.8%
EPS NY rev (1m)131.46%
EPS NY rev (3m)224.53%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.6%
Revenue NY rev (1m)0.51%
Revenue NY rev (3m)0.76%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 155.53 | ||
| Fwd PE | 61.06 | ||
| P/S | 1.82 | ||
| P/FCF | 100.76 | ||
| P/OCF | 17.67 | ||
| P/B | 3.35 | ||
| P/tB | 15.73 | ||
| EV/EBITDA | 13.63 |
EPS(TTM)0.34
EY0.64%
EPS(NY)0.87
Fwd EY1.64%
FCF(TTM)0.52
FCFY0.99%
OCF(TTM)2.99
OCFY5.66%
SpS29.06
BVpS15.8
TBVpS3.36
PEG (NY)0.12
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.09% | ||
| ROE | 15.22% | ||
| ROCE | 7.09% | ||
| ROIC | 5.6% | ||
| ROICexc | 6.96% | ||
| ROICexgc | 11.77% | ||
| OM | 9.23% | ||
| PM (TTM) | 8.27% | ||
| GM | 17.43% | ||
| FCFM | 1.81% |
ROA(3y)-0.26%
ROA(5y)-2.1%
ROE(3y)-1.05%
ROE(5y)-7.46%
ROIC(3y)2.58%
ROIC(5y)N/A
ROICexc(3y)3.83%
ROICexc(5y)N/A
ROICexgc(3y)7.29%
ROICexgc(5y)N/A
ROCE(3y)3.26%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y12.04%
GM growth 5Y13.63%
F-Score5
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.84 | ||
| Debt/FCF | 26.5 | ||
| Debt/EBITDA | 3.41 | ||
| Cap/Depr | 203.28% | ||
| Cap/Sales | 8.49% | ||
| Interest Coverage | 3.17 | ||
| Cash Conversion | 76.79% | ||
| Profit Quality | 21.83% | ||
| Current Ratio | 1.56 | ||
| Quick Ratio | 0.76 | ||
| Altman-Z | 1.58 |
F-Score5
WACC14.92%
ROIC/WACC0.38
Cap/Depr(3y)143%
Cap/Depr(5y)154.87%
Cap/Sales(3y)6.75%
Cap/Sales(5y)7.29%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)6450.81%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%650%
EPS Next Y1312.47%
EPS Next 2Y266.22%
EPS Next 3Y165.51%
EPS Next 5YN/A
Revenue 1Y (TTM)17.03%
Revenue growth 3Y9.95%
Revenue growth 5Y27.05%
Sales Q2Q%31.77%
Revenue Next Year13.52%
Revenue Next 2Y15.19%
Revenue Next 3Y14.37%
Revenue Next 5Y72.65%
EBIT growth 1Y134.76%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year109.6%
EBIT Next 3Y39.22%
EBIT Next 5Y103.84%
FCF growth 1Y-82.82%
FCF growth 3YN/A
FCF growth 5Y-22.11%
OCF growth 1Y-31%
OCF growth 3YN/A
OCF growth 5Y-6.76%