NTCO gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 36 industry peers in the Personal Care Products industry. NTCO may be in some trouble as it scores bad on both profitability and health. NTCO has a decent growth rate and is not valued too expensively.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year NTCO has reported negative net income.
NTCO had a positive operating cash flow in the past year.

1.2 Ratios

Looking at the Return On Assets, with a value of -5.60%, NTCO is in line with its industry, outperforming 42.11% of the companies in the same industry.
NTCO's Return On Equity of -13.80% is in line compared to the rest of the industry. NTCO outperforms 47.37% of its industry peers.
NTCO has a Return On Invested Capital (3.82%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for NTCO is significantly below the industry average of 11.85%.
The last Return On Invested Capital (3.82%) for NTCO is above the 3 year average (3.19%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	-5.6%
ROE	-13.8%
ROIC	3.82%

ROA(3y)-1.52%

ROA(5y)-0.05%

ROE(3y)-3.84%

ROE(5y)2.88%

ROIC(3y)3.19%

ROIC(5y)6.2%

1.3 Margins

NTCO's Operating Margin of 5.42% is in line compared to the rest of the industry. NTCO outperforms 57.89% of its industry peers.
NTCO's Operating Margin has declined in the last couple of years.
The Gross Margin of NTCO (64.70%) is better than 63.16% of its industry peers.
In the last couple of years the Gross Margin of NTCO has declined.

		Industry Rank	Sector Rank
OM	5.42%
PM (TTM)	N/A
GM	64.7%

OM growth 3Y-36.04%

OM growth 5Y-27.12%

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y-3.98%

GM growth 5Y-1.96%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), NTCO is destroying value.
Compared to 1 year ago, NTCO has about the same amount of shares outstanding.
Compared to 1 year ago, NTCO has a worse debt to assets ratio.

2.2 Solvency

Based on the Altman-Z score of 1.27, we must say that NTCO is in the distress zone and has some risk of bankruptcy.
NTCO has a Altman-Z score of 1.27. This is in the lower half of the industry: NTCO underperforms 60.53% of its industry peers.
NTCO has a Debt/Equity ratio of 0.71. This is a neutral value indicating NTCO is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.71, NTCO is doing worse than 60.53% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.71
Debt/FCF	N/A
Altman-Z	1.27

ROIC/WACC0.32

WACC11.97%

2.3 Liquidity

A Current Ratio of 1.36 indicates that NTCO should not have too much problems paying its short term obligations.
NTCO has a Current ratio of 1.36. This is in the lower half of the industry: NTCO underperforms 60.53% of its industry peers.
NTCO has a Quick Ratio of 1.01. This is a normal value and indicates that NTCO is financially healthy and should not expect problems in meeting its short term obligations.
NTCO's Quick ratio of 1.01 is in line compared to the rest of the industry. NTCO outperforms 47.37% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.36
Quick Ratio	1.01

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

NTCO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -521.82%.
NTCO shows a decrease in Revenue. In the last year, the revenue decreased by -9.60%.
NTCO shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 29.83% yearly.

EPS 1Y (TTM)-521.82%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%5.36%

Revenue 1Y (TTM)-9.6%

Revenue growth 3Y36.02%

Revenue growth 5Y29.83%

Sales Q2Q%-10.67%

3.2 Future

NTCO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 36.32% yearly.
The Revenue is expected to grow by 1.96% on average over the next years.

EPS Next Y69.18%

EPS Next 2Y51.75%

EPS Next 3Y36.32%

EPS Next 5YN/A

Revenue Next Year-9.61%

Revenue Next 2Y-6.29%

Revenue Next 3Y-2.82%

Revenue Next 5Y1.96%

3.3 Evolution

The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

NTCO reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
NTCO is valuated quite expensively with a Price/Forward Earnings ratio of 26.06.
NTCO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. NTCO is cheaper than 60.53% of the companies in the same industry.
NTCO's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.98.

		Industry Rank	Sector Rank
PE	N/A
Fwd PE	26.06

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NTCO indicates a rather cheap valuation: NTCO is cheaper than 86.84% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	7.65

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.
NTCO's earnings are expected to grow with 36.32% in the coming years. This may justify a more expensive valuation.

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2Y51.75%

EPS Next 3Y36.32%

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5. Dividend

5.1 Amount

With a yearly dividend of 0.83%, NTCO is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.90, NTCO pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 1.82, NTCO's dividend is way lower than the S&P500 average.

		Industry Rank	Sector Rank
Dividend Yield	0.83%

5.2 History

The dividend of NTCO has a limited annual growth rate of 0.67%.
NTCO does not have a reliable dividend history as it only pays dividend since a couple or years.

Dividend Growth(5Y)0.67%

Div Incr Years0

Div Non Decr Years0

5.3 Sustainability

NTCO has negative earnings and hence a negative payout ratio. The dividend may be in danger.
NTCO's earnings are growing more than its dividend. This makes the dividend growth sustainable.

DP-6.37%

EPS Next 2Y51.75%

EPS Next 3Y36.32%

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NATURA &CO HOLDING-ADR / NTCO FAQ

What is the fundamental rating for NTCO stock?

ChartMill assigns a fundamental rating of 3 / 10 to NTCO.

What is the valuation status of NATURA &CO HOLDING-ADR (NTCO) stock?

ChartMill assigns a valuation rating of 3 / 10 to NATURA &CO HOLDING-ADR (NTCO). This can be considered as Overvalued.

Can you provide the profitability details for NATURA &CO HOLDING-ADR?

NATURA &CO HOLDING-ADR (NTCO) has a profitability rating of 3 / 10.

How financially healthy is NATURA &CO HOLDING-ADR?

The financial health rating of NATURA &CO HOLDING-ADR (NTCO) is 2 / 10.

Can you provide the dividend sustainability for NTCO stock?

The dividend rating of NATURA &CO HOLDING-ADR (NTCO) is 2 / 10 and the dividend payout ratio is -6.37%.