ARCO PLATFORM LTD - CLASS A (ARCE) Fundamental Analysis & Valuation

NASDAQ:ARCE • KYG045531061

Current stock price

13.98 USD
-0.01 (-0.07%)
At close:
13.99 USD
+0.01 (+0.07%)
After Hours:

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

3

1. ARCE Profitability Analysis

1.1 Basic Checks

  • In the past year ARCE has reported negative net income.
  • ARCE had a negative operating cash flow in the past year.
ARCE Yearly Net Income VS EBIT VS OCF VS FCFARCE Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 0 100M -100M 200M -200M

1.2 Ratios

  • Looking at the Return On Assets, with a value of -0.52%, ARCE is in line with its industry, outperforming 54.55% of the companies in the same industry.
  • ARCE has a Return On Equity (-1.22%) which is in line with its industry peers.
  • ARCE has a better Return On Invested Capital (3.15%) than 66.67% of its industry peers.
  • Measured over the past 3 years, the Average Return On Invested Capital for ARCE is significantly below the industry average of 15.40%.
  • The 3 year average ROIC (2.64%) for ARCE is below the current ROIC(3.15%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA -0.52%
ROE -1.22%
ROIC 3.15%
ROA(3y)-0.53%
ROA(5y)-1.61%
ROE(3y)-1.86%
ROE(5y)-2.77%
ROIC(3y)2.64%
ROIC(5y)2.4%
ARCE Yearly ROA, ROE, ROICARCE Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 0 10 20 30

1.3 Margins

  • ARCE's Profit Margin has declined in the last couple of years.
  • ARCE has a Operating Margin of 13.91%. This is in the better half of the industry: ARCE outperforms 78.79% of its industry peers.
  • ARCE's Operating Margin has declined in the last couple of years.
  • With a decent Gross Margin value of 66.71%, ARCE is doing good in the industry, outperforming 75.76% of the companies in the same industry.
  • In the last couple of years the Gross Margin of ARCE has remained more or less at the same level.
Industry RankSector Rank
OM 13.91%
PM (TTM) N/A
GM 66.71%
OM growth 3Y17.55%
OM growth 5Y-11.49%
PM growth 3YN/A
PM growth 5Y-34.26%
GM growth 3Y-3.35%
GM growth 5Y-1.14%
ARCE Yearly Profit, Operating, Gross MarginsARCE Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 0 20 -20 40 60

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3

2. ARCE Health Analysis

2.1 Basic Checks

  • The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ARCE is destroying value.
  • Compared to 1 year ago, ARCE has about the same amount of shares outstanding.
  • Compared to 1 year ago, ARCE has a worse debt to assets ratio.
ARCE Yearly Shares OutstandingARCE Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 10M 20M 30M 40M 50M
ARCE Yearly Total Debt VS Total AssetsARCE Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 1B 2B 3B 4B 5B

2.2 Solvency

  • An Altman-Z score of 1.84 indicates that ARCE is not a great score, but indicates only limited risk for bankruptcy at the moment.
  • ARCE has a Altman-Z score of 1.84. This is in the better half of the industry: ARCE outperforms 63.64% of its industry peers.
  • ARCE has a Debt/Equity ratio of 0.67. This is a neutral value indicating ARCE is somewhat dependend on debt financing.
  • ARCE's Debt to Equity ratio of 0.67 is on the low side compared to the rest of the industry. ARCE is outperformed by 65.15% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.67
Debt/FCF N/A
Altman-Z 1.84
ROIC/WACC0.23
WACC13.98%
ARCE Yearly LT Debt VS Equity VS FCFARCE Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 0 500M 1B 1.5B 2B

2.3 Liquidity

  • ARCE has a Current Ratio of 1.26. This is a normal value and indicates that ARCE is financially healthy and should not expect problems in meeting its short term obligations.
  • ARCE's Current ratio of 1.26 is in line compared to the rest of the industry. ARCE outperforms 46.97% of its industry peers.
  • A Quick Ratio of 1.06 indicates that ARCE should not have too much problems paying its short term obligations.
  • The Quick ratio of ARCE (1.06) is worse than 62.12% of its industry peers.
Industry RankSector Rank
Current Ratio 1.26
Quick Ratio 1.06
ARCE Yearly Current Assets VS Current LiabilitesARCE Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 500M 1B 1.5B 2B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

8

3. ARCE Growth Analysis

3.1 Past

  • The Earnings Per Share has grown by an impressive 75.29% over the past year.
  • The Earnings Per Share has been decreasing by -4.84% on average over the past years.
  • The Revenue has grown by 30.47% in the past year. This is a very strong growth!
  • Measured over the past years, ARCE shows a very strong growth in Revenue. The Revenue has been growing by 48.68% on average per year.
EPS 1Y (TTM)75.29%
EPS 3YN/A
EPS 5Y-4.84%
EPS Q2Q%-366.67%
Revenue 1Y (TTM)30.47%
Revenue growth 3Y45.8%
Revenue growth 5Y48.68%
Sales Q2Q%14.29%

3.2 Future

  • Based on estimates for the next years, ARCE will show a very strong growth in Earnings Per Share. The EPS will grow by 82.40% on average per year.
  • Based on estimates for the next years, ARCE will show a very strong growth in Revenue. The Revenue will grow by 26.47% on average per year.
EPS Next Y356.19%
EPS Next 2Y103.64%
EPS Next 3Y82.4%
EPS Next 5YN/A
Revenue Next Year38.52%
Revenue Next 2Y30.81%
Revenue Next 3Y26.47%
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 accelerating.
  • Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
ARCE Yearly Revenue VS EstimatesARCE Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B
ARCE Yearly EPS VS EstimatesARCE Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 0 2 -2

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3

4. ARCE Valuation Analysis

4.1 Price/Earnings Ratio

  • ARCE reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
  • Based on the Price/Forward Earnings ratio of 37.42, the valuation of ARCE can be described as expensive.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of ARCE is on the same level as its industry peers.
  • When comparing the Price/Forward Earnings ratio of ARCE to the average of the S&P500 Index (38.68), we can say ARCE is valued inline with the index average.
Industry RankSector Rank
PE N/A
Fwd PE 37.42
ARCE Price Earnings VS Forward Price EarningsARCE Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 0 -50 -100

4.2 Price Multiples

  • Based on the Enterprise Value to EBITDA ratio, ARCE is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 10.16
ARCE Per share dataARCE EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 2 -2 4 6 8

4.3 Compensation for Growth

  • ARCE's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • A more expensive valuation may be justified as ARCE's earnings are expected to grow with 82.40% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y103.64%
EPS Next 3Y82.4%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

0

5. ARCE Dividend Analysis

5.1 Amount

  • ARCE does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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ARCE Fundamentals: All Metrics, Ratios and Statistics

ARCO PLATFORM LTD - CLASS A

NASDAQ:ARCE (12/6/2023, 8:00:00 PM)

After market: 13.99 +0.01 (+0.07%)

13.98

-0.01 (-0.07%)

Chartmill FA Rating
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)11-28
Earnings (Next)03-28
Inst Owners0%
Inst Owner Change0%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap927.43M
Revenue(TTM)1.94B
Net Income(TTM)-33.30M
Analysts78
Price Target17.17 (22.82%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)119.15%
Min EPS beat(2)-149.55%
Max EPS beat(2)387.86%
EPS beat(4)2
Avg EPS beat(4)43.33%
Min EPS beat(4)-149.55%
Max EPS beat(4)387.86%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-3.93%
Min Revenue beat(2)-6.43%
Max Revenue beat(2)-1.43%
Revenue beat(4)1
Avg Revenue beat(4)-0.86%
Min Revenue beat(4)-6.43%
Max Revenue beat(4)8.78%
Revenue beat(8)3
Avg Revenue beat(8)1.1%
Revenue beat(12)4
Avg Revenue beat(12)-0.35%
Revenue beat(16)7
Avg Revenue beat(16)0.96%
PT rev (1m)0%
PT rev (3m)2.8%
EPS NQ rev (1m)0%
EPS NQ rev (3m)6.82%
EPS NY rev (1m)-12.55%
EPS NY rev (3m)-40%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)9.36%
Revenue NY rev (1m)6.89%
Revenue NY rev (3m)6.18%
Valuation
Industry RankSector Rank
PE N/A
Fwd PE 37.42
P/S 2.36
P/FCF N/A
P/OCF N/A
P/B 1.68
P/tB N/A
EV/EBITDA 10.16
EPS(TTM)-0.13
EYN/A
EPS(NY)0.37
Fwd EY2.67%
FCF(TTM)-0.59
FCFYN/A
OCF(TTM)-0.12
OCFYN/A
SpS5.92
BVpS8.33
TBVpS-3.45
PEG (NY)N/A
PEG (5Y)N/A
Graham Number0 (-100%)
Profitability
Industry RankSector Rank
ROA -0.52%
ROE -1.22%
ROCE 5.42%
ROIC 3.15%
ROICexc 3.52%
ROICexgc 26.32%
OM 13.91%
PM (TTM) N/A
GM 66.71%
FCFM N/A
ROA(3y)-0.53%
ROA(5y)-1.61%
ROE(3y)-1.86%
ROE(5y)-2.77%
ROIC(3y)2.64%
ROIC(5y)2.4%
ROICexc(3y)3.39%
ROICexc(5y)3.94%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)4.53%
ROCE(5y)4.12%
ROICexgc growth 3Y54.57%
ROICexgc growth 5Y-1.3%
ROICexc growth 3Y43.62%
ROICexc growth 5Y-21.27%
OM growth 3Y17.55%
OM growth 5Y-11.49%
PM growth 3YN/A
PM growth 5Y-34.26%
GM growth 3Y-3.35%
GM growth 5Y-1.14%
F-Score4
Asset Turnover0.3
Health
Industry RankSector Rank
Debt/Equity 0.67
Debt/FCF N/A
Debt/EBITDA 3.14
Cap/Depr 49.81%
Cap/Sales 8%
Interest Coverage 0.72
Cash Conversion N/A
Profit Quality N/A
Current Ratio 1.26
Quick Ratio 1.06
Altman-Z 1.84
F-Score4
WACC13.98%
ROIC/WACC0.23
Cap/Depr(3y)85.95%
Cap/Depr(5y)110.99%
Cap/Sales(3y)12.68%
Cap/Sales(5y)11.4%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)75.29%
EPS 3YN/A
EPS 5Y-4.84%
EPS Q2Q%-366.67%
EPS Next Y356.19%
EPS Next 2Y103.64%
EPS Next 3Y82.4%
EPS Next 5YN/A
Revenue 1Y (TTM)30.47%
Revenue growth 3Y45.8%
Revenue growth 5Y48.68%
Sales Q2Q%14.29%
Revenue Next Year38.52%
Revenue Next 2Y30.81%
Revenue Next 3Y26.47%
Revenue Next 5YN/A
EBIT growth 1Y53.59%
EBIT growth 3Y71.39%
EBIT growth 5Y31.59%
EBIT Next Year166.32%
EBIT Next 3Y58.24%
EBIT Next 5YN/A
FCF growth 1Y-453.41%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-138.17%
OCF growth 3YN/A
OCF growth 5YN/A

ARCO PLATFORM LTD - CLASS A / ARCE Fundamental Analysis FAQ

What is the ChartMill fundamental rating of ARCO PLATFORM LTD - CLASS A (ARCE) stock?

ChartMill assigns a fundamental rating of 4 / 10 to ARCE.


What is the valuation status of ARCO PLATFORM LTD - CLASS A (ARCE) stock?

ChartMill assigns a valuation rating of 3 / 10 to ARCO PLATFORM LTD - CLASS A (ARCE). This can be considered as Overvalued.


Can you provide the profitability details for ARCO PLATFORM LTD - CLASS A?

ARCO PLATFORM LTD - CLASS A (ARCE) has a profitability rating of 3 / 10.


How financially healthy is ARCO PLATFORM LTD - CLASS A?

The financial health rating of ARCO PLATFORM LTD - CLASS A (ARCE) is 3 / 10.


What is the earnings growth outlook for ARCO PLATFORM LTD - CLASS A?

The Earnings per Share (EPS) of ARCO PLATFORM LTD - CLASS A (ARCE) is expected to grow by 356.19% in the next year.