ARCO PLATFORM LTD - CLASS A (ARCE) Stock Fundamental Analysis
NASDAQ:ARCE - Nasdaq - KYG045531061 - Common Stock - Currency: USD
Taking everything into account, ARCE scores 4 out of 10 in our fundamental rating. ARCE was compared to 73 industry peers in the Diversified Consumer Services industry. ARCE has a bad profitability rating. Also its financial health evaluation is rather negative. ARCE shows excellent growth, but is valued quite expensive already.
1. Profitability
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.
The reported net income has been mixed in the past 5 years: ARCE reported negative net income in multiple years.
The reported operating cash flow has been mixed in the past 5 years: ARCE reported negative operating cash flow in multiple years.
1.2 Ratios
ARCE's Return On Assets of -0.52% is in line compared to the rest of the industry. ARCE outperforms 54.55% of its industry peers.
Looking at the Return On Equity, with a value of -1.22%, ARCE is in line with its industry, outperforming 56.06% of the companies in the same industry.
ARCE's Return On Invested Capital of 3.15% is fine compared to the rest of the industry. ARCE outperforms 66.67% of its industry peers.
ARCE had an Average Return On Invested Capital over the past 3 years of 2.64%. This is significantly below the industry average of 12.00%.
The 3 year average ROIC (2.64%) for ARCE is below the current ROIC(3.15%), indicating increased profibility in the last year.
| Industry Rank | Sector 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%
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.
ARCE has a better Gross Margin (66.71%) than 75.76% of its industry peers.
In the last couple of years the Gross Margin of ARCE has remained more or less at the same level.
| Industry Rank | Sector 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%
2. Health
2.1 Basic Checks
ARCE has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
ARCE has about the same amout of shares outstanding than it did 1 year ago.
ARCE has a worse debt/assets ratio than last year.
2.2 Solvency
ARCE has an Altman-Z score of 1.84. This is not the best score and indicates that ARCE is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of ARCE (1.84) is better than 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.
With a Debt to Equity ratio value of 0.67, ARCE is not doing good in the industry: 65.15% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.84 |
ROIC/WACC0.23
WACC13.98%
2.3 Liquidity
A Current Ratio of 1.26 indicates that ARCE should not have too much problems paying its short term obligations.
ARCE has a Current ratio (1.26) which is comparable to the rest of the industry.
A Quick Ratio of 1.06 indicates that ARCE should not have too much problems paying its short term obligations.
ARCE has a worse Quick ratio (1.06) than 62.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.26 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 75.29% over the past year.
ARCE shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -4.84% yearly.
Looking at the last year, ARCE shows a very strong growth in Revenue. The Revenue has grown by 30.47%.
ARCE shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 48.68% yearly.
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
ARCE is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 82.40% yearly.
ARCE is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 26.47% yearly.
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.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
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.
ARCE's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 20.44. ARCE is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 37.42 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARCE is valued a bit cheaper than 72.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 10.16 |
4.3 Compensation for Growth
The 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%
5. Dividend
5.1 Amount
ARCE does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
13.98
-0.01 (-0.07%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners0%
Inst Owner Change0%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap927.43M
Analysts78
Price Target17.17 (22.82%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector 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 Rank | Sector 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
Profitability
| Industry Rank | Sector 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%
ROICexcg growth 3Y54.57%
ROICexcg 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 Rank | Sector 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