ARC Document Solutions Inc (ARC) Stock Fundamental Analysis
NYSE:ARC - New York Stock Exchange, Inc. - US00191G1031 - Common Stock - Currency: USD
Taking everything into account, ARC scores 5 out of 10 in our fundamental rating. ARC was compared to 83 industry peers in the Commercial Services & Supplies industry. ARC has only an average score on both its financial health and profitability. ARC has a valuation in line with the averages, but on the other hand it scores bad on growth.
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.
ARC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ARC has a Return On Assets of 1.49%. This is comparable to the rest of the industry: ARC outperforms 52.38% of its industry peers.
ARC has a Return On Equity (3.01%) which is comparable to the rest of the industry.
ARC has a Return On Invested Capital (3.76%) which is in line with its industry peers.
ARC had an Average Return On Invested Capital over the past 3 years of 4.64%. This is significantly below the industry average of 11.34%.
| 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
The Profit Margin of ARC (1.61%) is comparable to the rest of the industry.
ARC's Profit Margin has improved in the last couple of years.
ARC has a Operating Margin (4.78%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of ARC has grown nicely.
ARC's Gross Margin of 33.23% is in line compared to the rest of the industry. ARC outperforms 54.76% of 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ARC is destroying value.
The number of shares outstanding for ARC has been reduced compared to 1 year ago.
ARC has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, ARC has an improved debt to assets ratio.
2.2 Solvency
ARC has an Altman-Z score of 1.96. This is not the best score and indicates that ARC is in the grey zone with still only limited risk for bankruptcy at the moment.
ARC has a Altman-Z score of 1.96. This is comparable to the rest of the industry: ARC outperforms 45.24% of its industry peers.
ARC has a debt to FCF ratio of 3.13. This is a good value and a sign of high solvency as ARC would need 3.13 years to pay back of all of its debts.
ARC's Debt to FCF ratio of 3.13 is fine compared to the rest 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.
ARC's Current ratio of 1.49 is in line compared to the rest of the industry. ARC outperforms 46.43% of its industry peers.
A Quick Ratio of 1.37 indicates that ARC should not have too much problems paying its short term obligations.
The Quick ratio of ARC (1.37) 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.
Measured over the past years, ARC shows a decrease in Earnings Per Share. The EPS has been decreasing by -1.09% on average per year.
ARC shows a small growth in Revenue. In the last year, the Revenue has grown by 2.86%.
Measured over the past years, ARC shows a decrease in Revenue. The Revenue has been decreasing by -6.84% on average per year.
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.
The Revenue is expected to grow by 4.14% on average over the next years.
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
The Price/Earnings ratio is 17.84, which indicates a rather expensive current valuation of ARC.
Based on the Price/Earnings ratio, ARC is valued a bit cheaper than 73.81% of the companies in the same industry.
ARC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.19.
A Price/Forward Earnings ratio of 19.74 indicates a rather expensive valuation of ARC.
Based on the Price/Forward Earnings ratio, ARC is valued a bit cheaper than the industry average as 71.43% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of ARC to the average of the S&P500 Index (22.13), 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
Based on the Enterprise Value to EBITDA ratio, ARC is valued cheaply inside the industry as 92.86% of the companies are valued more expensively.
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
ARC has a Yearly Dividend Yield of 5.90%, which is a nice return.
Compared to an average industry Dividend Yield of 2.56, ARC pays a better dividend. On top of this ARC pays more dividend than 100.00% of the companies listed in the same industry.
ARC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.40.
| 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 Change-30.86%
Ins Owners1.73%
Ins Owner Change0%
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%