ARC Document Solutions Inc (ARC) Fundamental Analysis & Valuation

NYSE:ARC • US00191G1031

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This ARC fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

5

1. ARC Profitability Analysis

1.1 Basic Checks

  • ARC had positive earnings in the past year.
  • 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.
ARC Yearly Net Income VS EBIT VS OCF VS FCFARC Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 0 20M -20M 40M -40M

1.2 Ratios

  • ARC has a Return On Assets (1.49%) which is in line with its industry peers.
  • With a Return On Equity value of 3.01%, ARC perfoms like the industry average, outperforming 52.38% of the companies in the same industry.
  • ARC's Return On Invested Capital of 3.76% is in line compared to the rest of the industry. ARC outperforms 44.05% of 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 10.18%.
Industry RankSector 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%
ARC Yearly ROA, ROE, ROICARC Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 0 -10 -20 -30

1.3 Margins

  • ARC has a Profit Margin of 1.61%. This is comparable 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.
  • With a Operating Margin value of 4.78%, ARC perfoms like the industry average, outperforming 46.43% of the companies in the same industry.
  • ARC's Operating Margin has improved in the last couple of years.
  • 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 RankSector 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%
ARC Yearly Profit, Operating, Gross MarginsARC Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 0 10 -10 20 30

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5

2. ARC Health Analysis

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.
  • ARC has a better debt/assets ratio than last year.
ARC Yearly Shares OutstandingARC Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 10M 20M 30M 40M
ARC Yearly Total Debt VS Total AssetsARC Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M

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.
  • 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.
  • The Debt to FCF ratio of ARC (3.13) is better than 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's Debt to Equity ratio of 0.34 is fine compared to the rest of the industry. ARC outperforms 63.10% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.34
Debt/FCF 3.13
Altman-Z 1.96
ROIC/WACC0.56
WACC6.71%
ARC Yearly LT Debt VS Equity VS FCFARC Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M

2.3 Liquidity

  • A Current Ratio of 1.49 indicates that ARC should not have too much problems paying its short term obligations.
  • ARC has a Current ratio (1.49) which is comparable to the rest of the industry.
  • ARC has a Quick Ratio of 1.37. 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 of 1.37. This is comparable to the rest of the industry: ARC outperforms 55.95% of its industry peers.
Industry RankSector Rank
Current Ratio 1.49
Quick Ratio 1.37
ARC Yearly Current Assets VS Current LiabilitesARC Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M 80M 100M

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2

3. ARC Growth Analysis

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.
  • Looking at the last year, ARC shows a small growth in Revenue. The Revenue has grown by 2.86% in the last year.
  • 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

  • Based on estimates for the next years, ARC will show a very negative growth in Earnings Per Share. The EPS will decrease by -18.74% on average per year.
  • 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.
ARC Yearly Revenue VS EstimatesARC Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 100M 200M 300M 400M
ARC Yearly EPS VS EstimatesARC Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2021 2022 2023 2024 2025 0.1 0.2 0.3

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4

4. ARC Valuation Analysis

4.1 Price/Earnings Ratio

  • ARC is valuated rather expensively with a Price/Earnings ratio of 17.84.
  • ARC's Price/Earnings ratio is a bit cheaper when compared to the industry. ARC is cheaper than 73.81% of the companies in the same industry.
  • The average S&P500 Price/Earnings ratio is at 24.75. ARC is valued slightly cheaper when compared to this.
  • ARC is valuated rather expensively with a Price/Forward Earnings ratio of 19.74.
  • 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.
  • ARC is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.10, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 17.84
Fwd PE 19.74
ARC Price Earnings VS Forward Price EarningsARC Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

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.
  • Based on the Price/Free Cash Flow ratio, ARC is valued cheaply inside the industry as 94.05% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 7.76
EV/EBITDA 5.15
ARC Per share dataARC EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6

4.3 Compensation for Growth

  • A cheap valuation may be justified as ARC's earnings are expected to decrease with -18.74% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-18.74%
EPS Next 3YN/A

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5

5. ARC Dividend Analysis

5.1 Amount

  • ARC has a Yearly Dividend Yield of 5.90%, which is a nice return.
  • ARC's Dividend Yield is rather good when compared to the industry average which is at 0.85. ARC pays more dividend than 100.00% of the companies in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.89, ARC pays a better dividend.
Industry RankSector 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
ARC Yearly Dividends per shareARC Yearly Dividends per shareYearly Dividends per share 2019 2020 2021 2022 2023 2024 0.05 0.1 0.15 0.2

5.3 Sustainability

  • ARC pays out 181.67% of its income as dividend. This is not a sustainable payout ratio.
DP181.67%
EPS Next 2Y-18.74%
EPS Next 3YN/A
ARC Yearly Income VS Free CF VS DividendARC Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 0 20M -20M 40M -40M
ARC Dividend Payout.ARC Dividend Payout, showing the Payout Ratio.ARC Dividend Payout.PayoutRetained Earnings

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ARC Fundamentals: All Metrics, Ratios and Statistics

ARC Document Solutions Inc

NYSE:ARC (11/21/2024, 8:12:44 PM)

After market: 3.39 0 (0%)

3.39

0 (0%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)11-04
Earnings (Next)N/A
Inst Owners49.24%
Inst Owner Change0%
Ins Owners1.73%
Ins Owner Change0%
Market Cap146.65M
Revenue(TTM)289.23M
Net Income(TTM)4.66M
Analysts84
Price Target4.44 (30.97%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector 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 RankSector 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
Graham NumberN/A
Profitability
Industry RankSector 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%
ROICexgc growth 3Y29.73%
ROICexgc 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 RankSector 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%

ARC Document Solutions Inc / ARC Fundamental Analysis FAQ

Can you provide the ChartMill fundamental rating for ARC Document Solutions Inc?

ChartMill assigns a fundamental rating of 5 / 10 to ARC.


What is the valuation status for ARC stock?

ChartMill assigns a valuation rating of 4 / 10 to ARC Document Solutions Inc (ARC). This can be considered as Fairly Valued.


What is the profitability of ARC stock?

ARC Document Solutions Inc (ARC) has a profitability rating of 5 / 10.


Can you provide the expected EPS growth for ARC stock?

The Earnings per Share (EPS) of ARC Document Solutions Inc (ARC) is expected to decline by -22.31% in the next year.


Can you provide the dividend sustainability for ARC stock?

The dividend rating of ARC Document Solutions Inc (ARC) is 5 / 10 and the dividend payout ratio is 181.67%.