EMBRAER SA-SPON ADR (ERJ) Stock Fundamental Analysis
NYSE:ERJ - New York Stock Exchange, Inc. - US29082A1079 - ADR - Currency: USD
Overall ERJ gets a fundamental rating of 4 out of 10. We evaluated ERJ against 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
In the past year ERJ was profitable.
In the past year ERJ had a positive cash flow from operations.
In multiple years ERJ reported negative net income over the last 5 years.
ERJ had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.29%, ERJ is in line with its industry, outperforming 56.92% of the companies in the same industry.
The Return On Equity of ERJ (12.07%) is better than 76.92% of its industry peers.
ERJ's Return On Invested Capital of 5.88% is in line compared to the rest of the industry. ERJ outperforms 53.85% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ERJ is significantly below the industry average of 8.44%.
The last Return On Invested Capital (5.88%) for ERJ is above the 3 year average (3.04%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.29% | ||
| ROE | 12.07% | ||
| ROIC | 5.88% |
ROA(3y)0.77%
ROA(5y)-0.96%
ROE(3y)2.92%
ROE(5y)-3.58%
ROIC(3y)3.04%
ROIC(5y)N/A
1.3 Margins
With a decent Profit Margin value of 5.91%, ERJ is doing good in the industry, outperforming 61.54% of the companies in the same industry.
Looking at the Operating Margin, with a value of 10.15%, ERJ is in the better half of the industry, outperforming 67.69% of the companies in the same industry.
ERJ's Operating Margin has improved in the last couple of years.
ERJ's Gross Margin of 17.71% is on the low side compared to the rest of the industry. ERJ is outperformed by 70.77% of its industry peers.
ERJ's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.15% | ||
| PM (TTM) | 5.91% | ||
| GM | 17.71% |
OM growth 3Y26.36%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y5.14%
GM growth 5Y4.37%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ERJ is destroying value.
Compared to 1 year ago, ERJ has about the same amount of shares outstanding.
Compared to 5 years ago, ERJ has about the same amount of shares outstanding.
ERJ has a better debt/assets ratio than last year.
2.2 Solvency
ERJ has an Altman-Z score of 1.65. 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 1.65, ERJ is not doing good in the industry: 75.38% of the companies in the same industry are doing better.
ERJ has a debt to FCF ratio of 3.94. This is a good value and a sign of high solvency as ERJ would need 3.94 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.94, ERJ belongs to the top of the industry, outperforming 83.08% of the companies in the same industry.
ERJ has a Debt/Equity ratio of 0.64. This is a neutral value indicating ERJ is somewhat dependend on debt financing.
ERJ has a worse Debt to Equity ratio (0.64) than 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 3.94 | ||
| Altman-Z | 1.65 |
ROIC/WACC0.45
WACC12.99%
2.3 Liquidity
ERJ has a Current Ratio of 1.32. This is a normal value and indicates that ERJ is financially healthy and should not expect problems in meeting its short term obligations.
ERJ's Current ratio of 1.32 is on the low side compared to the rest of the industry. ERJ is outperformed by 69.23% of its industry peers.
A Quick Ratio of 0.59 indicates that ERJ may have some problems paying its short term obligations.
ERJ has a Quick ratio of 0.59. This is amonst the worse of the industry: ERJ underperforms 86.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.32 | ||
| Quick Ratio | 0.59 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 177.78% over the past year.
ERJ shows a strong growth in Revenue. In the last year, the Revenue has grown by 39.31%.
ERJ shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.19% yearly.
EPS 1Y (TTM)177.78%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-488.24%
Revenue 1Y (TTM)39.31%
Revenue growth 3Y16.04%
Revenue growth 5Y10.19%
Sales Q2Q%23.02%
3.2 Future
ERJ is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.65% yearly.
ERJ is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 69.16% yearly.
EPS Next Y101.3%
EPS Next 2Y67.61%
EPS Next 3Y17.65%
EPS Next 5YN/A
Revenue Next Year19.25%
Revenue Next 2Y16.43%
Revenue Next 3Y13.76%
Revenue Next 5Y69.16%
3.3 Evolution
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
With a Price/Earnings ratio of 149.07, ERJ can be considered very expensive at the moment.
ERJ's Price/Earnings ratio is a bit more expensive when compared to the industry. ERJ is more expensive than 61.54% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.30, ERJ is valued quite expensively.
The Price/Forward Earnings ratio is 45.82, which means the current valuation is very expensive for ERJ.
ERJ's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of ERJ to the average of the S&P500 Index (21.76), we can say ERJ is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 149.07 | ||
| Fwd PE | 45.82 |
4.2 Price Multiples
ERJ's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ERJ is cheaper than 96.92% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ERJ indicates a rather cheap valuation: ERJ is cheaper than 98.46% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.94 | ||
| EV/EBITDA | 11.79 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ERJ's earnings are expected to grow with 17.65% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.47
PEG (5Y)N/A
EPS Next 2Y67.61%
EPS Next 3Y17.65%
5. Dividend
5.1 Amount
With a yearly dividend of 0.07%, ERJ is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.24, ERJ pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.37, ERJ's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.07% |
5.2 History
ERJ has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DP0%
EPS Next 2Y67.61%
EPS Next 3Y17.65%
59.63
-0.26 (-0.43%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners44.8%
Inst Owner Change0%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap10.95B
Analysts78.57
Price Target52.68 (-11.66%)
Short Float %3.96%
Short Ratio5.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.07% |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-233.01%
Min EPS beat(2)-435.01%
Max EPS beat(2)-31.01%
EPS beat(4)1
Avg EPS beat(4)-121.29%
Min EPS beat(4)-435.01%
Max EPS beat(4)3.26%
EPS beat(8)2
Avg EPS beat(8)-75.7%
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)0
Avg Revenue beat(2)-5.22%
Min Revenue beat(2)-9.14%
Max Revenue beat(2)-1.3%
Revenue beat(4)1
Avg Revenue beat(4)-1.74%
Min Revenue beat(4)-9.14%
Max Revenue beat(4)3.89%
Revenue beat(8)2
Avg Revenue beat(8)-3.75%
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)12.68%
PT rev (3m)16.11%
EPS NQ rev (1m)1.21%
EPS NQ rev (3m)-40.55%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.02%
Revenue NQ rev (1m)2.3%
Revenue NQ rev (3m)0.24%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 149.07 | ||
| Fwd PE | 45.82 | ||
| P/S | 1.6 | ||
| P/FCF | 18.94 | ||
| P/OCF | 10.08 | ||
| P/B | 3.27 | ||
| P/tB | 16.25 | ||
| EV/EBITDA | 11.79 |
EPS(TTM)0.4
EY0.67%
EPS(NY)1.3
Fwd EY2.18%
FCF(TTM)3.15
FCFY5.28%
OCF(TTM)5.92
OCFY9.93%
SpS37.25
BVpS18.25
TBVpS3.67
PEG (NY)1.47
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.29% | ||
| ROE | 12.07% | ||
| ROCE | 9.5% | ||
| ROIC | 5.88% | ||
| ROICexc | 7.31% | ||
| ROICexgc | 13.41% | ||
| OM | 10.15% | ||
| PM (TTM) | 5.91% | ||
| GM | 17.71% | ||
| FCFM | 8.45% |
ROA(3y)0.77%
ROA(5y)-0.96%
ROE(3y)2.92%
ROE(5y)-3.58%
ROIC(3y)3.04%
ROIC(5y)N/A
ROICexc(3y)4.39%
ROICexc(5y)N/A
ROICexgc(3y)8.44%
ROICexgc(5y)N/A
ROCE(3y)4.92%
ROCE(5y)N/A
ROICexcg growth 3Y38.8%
ROICexcg growth 5YN/A
ROICexc growth 3Y37.44%
ROICexc growth 5YN/A
OM growth 3Y26.36%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y5.14%
GM growth 5Y4.37%
F-Score7
Asset Turnover0.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 3.94 | ||
| Debt/EBITDA | 2.26 | ||
| Cap/Depr | 197.19% | ||
| Cap/Sales | 7.44% | ||
| Interest Coverage | 3.98 | ||
| Cash Conversion | 114.1% | ||
| Profit Quality | 142.94% | ||
| Current Ratio | 1.32 | ||
| Quick Ratio | 0.59 | ||
| Altman-Z | 1.65 |
F-Score7
WACC12.99%
ROIC/WACC0.45
Cap/Depr(3y)162.83%
Cap/Depr(5y)138.44%
Cap/Sales(3y)6.98%
Cap/Sales(5y)6.64%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)177.78%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-488.24%
EPS Next Y101.3%
EPS Next 2Y67.61%
EPS Next 3Y17.65%
EPS Next 5YN/A
Revenue 1Y (TTM)39.31%
Revenue growth 3Y16.04%
Revenue growth 5Y10.19%
Sales Q2Q%23.02%
Revenue Next Year19.25%
Revenue Next 2Y16.43%
Revenue Next 3Y13.76%
Revenue Next 5Y69.16%
EBIT growth 1Y148.11%
EBIT growth 3Y46.63%
EBIT growth 5YN/A
EBIT Next Year50.78%
EBIT Next 3Y28.65%
EBIT Next 5Y79.84%
FCF growth 1Y2305.46%
FCF growth 3Y29.27%
FCF growth 5Y15.04%
OCF growth 1Y343.29%
OCF growth 3Y24.7%
OCF growth 5Y8.09%