ARC Document Solutions Inc (ARC) Stock Fundamental Analysis
NYSE:ARC - New York Stock Exchange, Inc. - US00191G1031 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to ARC. ARC was compared to 83 industry peers in the Commercial Services & Supplies industry. Both the profitability and the financial health of ARC get a neutral evaluation. Nothing too spectacular is happening here. ARC has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
ARC had positive earnings in the past year.
ARC had a positive operating cash flow in the past year.
ARC had positive earnings in each of the past 5 years.
Each year in the past 5 years ARC had a positive operating cash flow.
1.2 Ratios
The Return On Assets of ARC (1.49%) is comparable to the rest of the industry.
The Return On Equity of ARC (3.01%) is comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 3.76%, ARC is in line with its industry, outperforming 44.05% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ARC is significantly below the industry average of 10.56%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.49% | ||
| ROE | 3.01% | ||
| ROIC | 3.76% |
ROA(3y)3.03%
ROA(5y)2.34%
ROE(3y)6.17%
ROE(5y)4.96%
ROIC(3y)4.64%
ROIC(5y)4.07%
1.3 Margins
ARC's Profit Margin of 1.61% is in line compared to the rest of the industry. ARC outperforms 50.00% of its industry peers.
In the last couple of years the Profit Margin of ARC has grown nicely.
The Operating Margin of ARC (4.78%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of ARC has grown nicely.
ARC has a Gross Margin (33.23%) which is in line with its industry peers.
ARC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.78% | ||
| PM (TTM) | 1.61% | ||
| GM | 33.23% |
OM growth 3Y14.39%
OM growth 5Y7.5%
PM growth 3Y10.99%
PM growth 5Y5.69%
GM growth 3Y1.52%
GM growth 5Y0.55%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ARC is destroying value.
Compared to 1 year ago, ARC has less shares outstanding
Compared to 5 years ago, ARC has less shares outstanding
ARC has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 1.96 indicates that ARC is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 1.96, ARC is in line with its industry, outperforming 45.24% of the companies in the same industry.
The Debt to FCF ratio of ARC is 3.13, which is a good value as it means it would take ARC, 3.13 years of fcf income to pay off all of its debts.
ARC has a Debt to FCF ratio of 3.13. This is in the better half of the industry: ARC outperforms 75.00% of its industry peers.
ARC has a Debt/Equity ratio of 0.34. This is a healthy value indicating a solid balance between debt and equity.
ARC has a Debt to Equity ratio of 0.34. This is in the better half of the industry: ARC outperforms 63.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | 3.13 | ||
| Altman-Z | 1.96 |
ROIC/WACC0.56
WACC6.71%
2.3 Liquidity
A Current Ratio of 1.49 indicates that ARC should not have too much problems paying its short term obligations.
The Current ratio of ARC (1.49) is comparable to the rest of the industry.
A Quick Ratio of 1.37 indicates that ARC should not have too much problems paying its short term obligations.
ARC has a Quick ratio (1.37) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.49 | ||
| Quick Ratio | 1.37 |
3. Growth
3.1 Past
The earnings per share for ARC have decreased strongly by -29.63% in the last year.
The Earnings Per Share has been decreasing by -1.09% on average over the past years.
ARC shows a small growth in Revenue. In the last year, the Revenue has grown by 2.86%.
ARC shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -6.84% yearly.
EPS 1Y (TTM)-29.63%
EPS 3Y10.6%
EPS 5Y-1.09%
EPS Q2Q%-100%
Revenue 1Y (TTM)2.86%
Revenue growth 3Y-0.96%
Revenue growth 5Y-6.84%
Sales Q2Q%4.77%
3.2 Future
ARC is expected to show a very negative growth in Earnings Per Share. In the coming years, the EPS will decrease by -18.74% yearly.
Based on estimates for the next years, ARC will show a small growth in Revenue. The Revenue will grow by 4.14% on average per year.
EPS Next Y-22.31%
EPS Next 2Y-18.74%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year4.63%
Revenue Next 2Y4.14%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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 17.84 indicates a rather expensive valuation of ARC.
73.81% of the companies in the same industry are more expensive than ARC, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 24.29. ARC is valued slightly cheaper when compared to this.
ARC is valuated rather expensively with a Price/Forward Earnings ratio of 19.74.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ARC indicates a somewhat cheap valuation: ARC is cheaper than 71.43% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of ARC to the average of the S&P500 Index (20.42), we can say ARC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.84 | ||
| Fwd PE | 19.74 |
4.2 Price Multiples
ARC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ARC is cheaper than 92.86% of the companies in the same industry.
ARC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ARC is cheaper than 94.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.76 | ||
| EV/EBITDA | 5.15 |
4.3 Compensation for Growth
ARC's earnings are expected to decrease with -18.74% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-18.74%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.90%, ARC is a good candidate for dividend investing.
ARC's Dividend Yield is rather good when compared to the industry average which is at 2.54. ARC pays more dividend than 100.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.43, ARC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.9% |
5.2 History
ARC has been paying a dividend for over 5 years, so it has already some track record.
ARC has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
181.67% of the earnings are spent on dividend by ARC. This is not a sustainable payout ratio.
DP181.67%
EPS Next 2Y-18.74%
EPS Next 3YN/A
3.39
0 (0%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners49.24%
Inst Owner Change0%
Ins Owners1.73%
Ins Owner Change-512.24%
Market Cap146.65M
Analysts84
Price Target4.44 (30.97%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.9% |
Yearly Dividend0.2
Dividend Growth(5Y)N/A
DP181.67%
Div Incr Years4
Div Non Decr Years4
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-47.19%
Min EPS beat(2)-100%
Max EPS beat(2)5.61%
EPS beat(4)2
Avg EPS beat(4)-18.09%
Min EPS beat(4)-100%
Max EPS beat(4)32.01%
EPS beat(8)3
Avg EPS beat(8)-9.54%
EPS beat(12)6
Avg EPS beat(12)-0.4%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)1.7%
Min Revenue beat(2)1.39%
Max Revenue beat(2)2%
Revenue beat(4)4
Avg Revenue beat(4)1.48%
Min Revenue beat(4)0.84%
Max Revenue beat(4)2%
Revenue beat(8)4
Avg Revenue beat(8)-0.7%
Revenue beat(12)7
Avg Revenue beat(12)0.21%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)-18.69%
EPS NQ rev (1m)-66.67%
EPS NQ rev (3m)-66.67%
EPS NY rev (1m)-25.93%
EPS NY rev (3m)-25.93%
Revenue NQ rev (1m)4.13%
Revenue NQ rev (3m)4.13%
Revenue NY rev (1m)1.25%
Revenue NY rev (3m)2.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.84 | ||
| Fwd PE | 19.74 | ||
| P/S | 0.51 | ||
| P/FCF | 7.76 | ||
| P/OCF | 4.46 | ||
| P/B | 0.95 | ||
| P/tB | 4.33 | ||
| EV/EBITDA | 5.15 |
EPS(TTM)0.19
EY5.6%
EPS(NY)0.17
Fwd EY5.06%
FCF(TTM)0.44
FCFY12.89%
OCF(TTM)0.76
OCFY22.43%
SpS6.69
BVpS3.58
TBVpS0.78
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.49% | ||
| ROE | 3.01% | ||
| ROCE | 5.79% | ||
| ROIC | 3.76% | ||
| ROICexc | 4.79% | ||
| ROICexgc | 13.53% | ||
| OM | 4.78% | ||
| PM (TTM) | 1.61% | ||
| GM | 33.23% | ||
| FCFM | 6.54% |
ROA(3y)3.03%
ROA(5y)2.34%
ROE(3y)6.17%
ROE(5y)4.96%
ROIC(3y)4.64%
ROIC(5y)4.07%
ROICexc(3y)6.02%
ROICexc(5y)5.13%
ROICexgc(3y)17.47%
ROICexgc(5y)13.75%
ROCE(3y)7.15%
ROCE(5y)6.28%
ROICexcg growth 3Y29.73%
ROICexcg growth 5Y10.98%
ROICexc growth 3Y19.41%
ROICexc growth 5Y4.78%
OM growth 3Y14.39%
OM growth 5Y7.5%
PM growth 3Y10.99%
PM growth 5Y5.69%
GM growth 3Y1.52%
GM growth 5Y0.55%
F-Score5
Asset Turnover0.92
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | 3.13 | ||
| Debt/EBITDA | 1.74 | ||
| Cap/Depr | 86.39% | ||
| Cap/Sales | 4.84% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 109.63% | ||
| Profit Quality | 405.82% | ||
| Current Ratio | 1.49 | ||
| Quick Ratio | 1.37 | ||
| Altman-Z | 1.96 |
F-Score5
WACC6.71%
ROIC/WACC0.56
Cap/Depr(3y)34.84%
Cap/Depr(5y)33.2%
Cap/Sales(3y)2.4%
Cap/Sales(5y)2.56%
Profit Quality(3y)316.5%
Profit Quality(5y)611.06%
High Growth Momentum
Growth
EPS 1Y (TTM)-29.63%
EPS 3Y10.6%
EPS 5Y-1.09%
EPS Q2Q%-100%
EPS Next Y-22.31%
EPS Next 2Y-18.74%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)2.86%
Revenue growth 3Y-0.96%
Revenue growth 5Y-6.84%
Sales Q2Q%4.77%
Revenue Next Year4.63%
Revenue Next 2Y4.14%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-25.32%
EBIT growth 3Y13.28%
EBIT growth 5Y0.14%
EBIT Next Year74.29%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-35.91%
FCF growth 3Y-18.72%
FCF growth 5Y-8.42%
OCF growth 1Y-3.26%
OCF growth 3Y-12.44%
OCF growth 5Y-7.83%