ARC DOCUMENT SOLUTIONS INC (ARC)
US00191G1031 - Common Stock
We assign a fundamental rating of 5 out of 10 to ARC. ARC was compared to 84 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 bad growth rate and is valued cheaply. These ratings could make ARC a good candidate for value investing.
1. Profitability
1.1 Basic Checks
In the past year ARC was profitable.
In the past year ARC had a positive cash flow from operations.
Each year in the past 5 years ARC has been profitable.
ARC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ARC has a Return On Assets of 2.65%. This is in the better half of the industry: ARC outperforms 63.86% of its industry peers.
The Return On Equity of ARC (5.33%) is comparable to the rest of the industry.
ARC has a Return On Invested Capital (4.91%) which is comparable to the rest of the industry.
ARC had an Average Return On Invested Capital over the past 3 years of 4.64%. This is significantly below the industry average of 10.00%.
The last Return On Invested Capital (4.91%) for ARC is above the 3 year average (4.64%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.65% | ||
| ROE | 5.33% | ||
| ROIC | 4.91% |
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
Looking at the Profit Margin, with a value of 2.92%, ARC is in the better half of the industry, outperforming 62.65% of the companies in the same industry.
In the last couple of years the Profit Margin of ARC has grown nicely.
ARC has a Operating Margin (6.43%) which is in line with its industry peers.
In the last couple of years the Operating Margin of ARC has grown nicely.
The Gross Margin of ARC (33.54%) is comparable to the rest of the industry.
ARC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.43% | ||
| PM (TTM) | 2.92% | ||
| GM | 33.54% |
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.
ARC has less shares outstanding than it did 1 year ago.
The number of shares outstanding for ARC has been reduced compared to 5 years ago.
Compared to 1 year ago, ARC has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 1.90 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 1.90, ARC is in line with its industry, outperforming 45.78% of the companies in the same industry.
The Debt to FCF ratio of ARC is 2.41, which is a good value as it means it would take ARC, 2.41 years of fcf income to pay off all of its debts.
ARC has a better Debt to FCF ratio (2.41) than 74.70% of its industry peers.
ARC has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.35, ARC is doing good in the industry, outperforming 62.65% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 2.41 | ||
| Altman-Z | 1.9 |
ROIC/WACC0.71
WACC6.9%
2.3 Liquidity
ARC has a Current Ratio of 1.53. This is a normal value and indicates that ARC is financially healthy and should not expect problems in meeting its short term obligations.
ARC has a Current ratio of 1.53. This is comparable to the rest of the industry: ARC outperforms 49.40% of its industry peers.
ARC has a Quick Ratio of 1.40. This is a normal value and indicates that ARC is financially healthy and should not expect problems in meeting its short term obligations.
ARC has a Quick ratio (1.40) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.53 | ||
| Quick Ratio | 1.4 |
3. Growth
3.1 Past
The earnings per share for ARC have decreased by -7.14% in the last year.
The Earnings Per Share has been decreasing by -1.09% on average over the past years.
The Revenue has decreased by -1.65% in the past year.
ARC shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -6.84% yearly.
EPS 1Y (TTM)-7.14%
EPS 3Y10.6%
EPS 5Y-1.09%
EPS growth Q2Q-16.67%
Revenue 1Y (TTM)-1.65%
Revenue growth 3Y-0.96%
Revenue growth 5Y-6.84%
Revenue growth Q2Q0.11%
3.2 Future
Based on estimates for the next years, ARC will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.49% on average per year.
The Revenue is expected to grow by 2.25% on average over the next years.
EPS Next Y1%
EPS Next 2Y11.49%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year1.17%
Revenue Next 2Y2.25%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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 10.54 indicates a reasonable valuation of ARC.
91.57% of the companies in the same industry are more expensive than ARC, based on the Price/Earnings ratio.
ARC is valuated cheaply when we compare the Price/Earnings ratio to 25.20, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 10.43, the valuation of ARC can be described as very reasonable.
Based on the Price/Forward Earnings ratio, ARC is valued cheaper than 92.77% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ARC to the average of the S&P500 Index (21.63), we can say ARC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.54 | ||
| Fwd PE | 10.43 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARC indicates a rather cheap valuation: ARC is cheaper than 96.39% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ARC is valued cheaply inside the industry as 96.39% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.58 | ||
| EV/EBITDA | 3.48 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of ARC may justify a higher PE ratio.
PEG (NY)10.54
PEG (5Y)N/A
EPS Next 2Y11.49%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 7.43%, ARC is a good candidate for dividend investing.
ARC's Dividend Yield is rather good when compared to the industry average which is at 2.44. ARC pays more dividend than 100.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, ARC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.43% |
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
ARC pays out 103.73% of its income as dividend. This is not a sustainable payout ratio.
DP103.73%
EPS Next 2Y11.49%
EPS Next 3YN/A
ARC DOCUMENT SOLUTIONS INC
NYSE:ARC (4/25/2024, 7:04:00 PM)
2.74
-0.03 (-1.08%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap118.29M
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.43% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.54 | ||
| Fwd PE | 10.43 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)10.54
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.65% | ||
| ROE | 5.33% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 6.43% | ||
| PM (TTM) | 2.92% | ||
| GM | 33.54% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.91
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.53 | ||
| Quick Ratio | 1.4 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-7.14%
EPS 3Y10.6%
EPS 5Y
EPS growth Q2Q
EPS Next Y1%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-1.65%
Revenue growth 3Y-0.96%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y