ARCO PLATFORM LTD - CLASS A (ARCE)
KYG045531061 - Common Stock
We assign a fundamental rating of 4 out of 10 to ARCE. ARCE was compared to 68 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
ARCE had negative earnings in the past year.
ARCE had a negative operating cash flow in the past year.
In multiple years ARCE reported negative net income over the last 5 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 has negative profitability rations, so we won't be analyzing them here.
ARCE's Return On Invested Capital of 3.15% is in line compared to the rest of the industry. ARCE outperforms 59.70% 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 9.19%.
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 | N/A | ||
| ROE | N/A | ||
| ROIC | 3.15% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)2.64%
ROIC(5y)2.4%
1.3 Margins
ARCE's Profit Margin has declined in the last couple of years.
ARCE's Operating Margin of 13.91% is fine compared to the rest of the industry. ARCE outperforms 79.10% 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 77.61% of the companies in the same industry.
ARCE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.91% | ||
| PM | N/A | ||
| GM | 66.71% |
OM growth 3Y17.55%
OM growth 5Y-11.49%
PM growth 3YN/A
PM growth 5Y-34.27%
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.
Compared to 1 year ago, ARCE has about the same amount of shares outstanding.
Compared to 5 years ago, ARCE has more shares outstanding
The debt/assets ratio for ARCE is higher compared to a year ago.
2.2 Solvency
ARCE has an Altman-Z score of 1.54. This is a bad value and indicates that ARCE is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.54, ARCE is in the better half of the industry, outperforming 61.19% of the companies in the same industry.
A Debt/Equity ratio of 0.67 indicates that ARCE is somewhat dependend on debt financing.
ARCE has a Debt to Equity ratio of 0.67. This is in the lower half of the industry: ARCE underperforms 67.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.54 |
ROIC/WACC2.07
WACC12.7%
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 46.27% of its industry peers.
ARCE has a Quick Ratio of 1.06. This is a normal value and indicates that ARCE is financially healthy and should not expect problems in meeting its short term obligations.
ARCE has a Quick ratio of 1.06. This is in the lower half of the industry: ARCE underperforms 61.19% 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 -4.95% 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 1Y75.29%
EPS 3YN/A
EPS 5Y-4.95%
EPS growth Q2Q-366.67%
Revenue growth 1Y30.47%
Revenue growth 3Y45.8%
Revenue growth 5Y48.68%
Revenue growth Q2Q14.27%
3.2 Future
ARCE is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 98.93% yearly.
ARCE is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 27.17% yearly.
EPS Next Y526.98%
EPS Next 2Y146.24%
EPS Next 3Y98.93%
EPS Next 5YN/A
Revenue Next Year30.45%
Revenue Next 2Y28.3%
Revenue Next 3Y27.17%
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.
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.
4. Valuation
4.1 Price/Earnings Ratio
ARCE reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
With a Price/Forward Earnings ratio of 19.95, ARCE is valued on the expensive side.
ARCE's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ARCE is cheaper than 64.18% of the companies in the same industry.
ARCE's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 18.89.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 19.95 |
4.2 Price Multiples
74.63% of the companies in the same industry are more expensive than ARCE, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 6.9 |
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 98.93% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y146.24%
EPS Next 3Y98.93%
5. Dividend
5.1 Amount
ARCE does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
ARCO PLATFORM LTD - CLASS A
NASDAQ:ARCE (9/28/2023, 7:00:00 PM)
After market: 13.85 +0.02 (+0.14%)13.83
+0.07 (+0.51%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)08-31 2023-08-31/amc
Earnings (Next)11-29 2023-11-29/amc
Inst Owners74.89%
Inst Owner Change-1.56%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap532.81M
Analysts78.18
Price Target16.7 (20.75%)
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
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%
Revenue beat(2)2
Avg Revenue beat(2)95968.3%
Min Revenue beat(2)93461.8%
Max Revenue beat(2)98474.7%
Revenue beat(4)4
Avg Revenue beat(4)99037.2%
Min Revenue beat(4)93461.8%
Max Revenue beat(4)108683%
PT rev (1m)-5.35%
PT rev (3m)-9.03%
EPS NQ rev (1m)6.82%
EPS NQ rev (3m)40.15%
EPS NY rev (1m)0%
EPS NY rev (3m)51.74%
Revenue NQ rev (1m)-99.89%
Revenue NQ rev (3m)-99.88%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.72%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 19.95 | ||
| P/S | 1.38 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.98 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.9 |
EPS(TTM)-0.13
EYN/A
EPS(NY)0.69
Fwd EY5.01%
FCF(TTM)-1
FCFYN/A
OCF(TTM)-0.2
OCFYN/A
SpS9.99
BVpS14.07
TBVpS-5.83
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | N/A | ||
| ROE | N/A | ||
| ROCE | 5.42% | ||
| ROIC | 3.15% | ||
| ROICexc | 3.52% | ||
| ROICexgc | 26.31% | ||
| OM | 13.91% | ||
| PM | N/A | ||
| GM | 66.71% | ||
| FCFM | N/A |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)2.64%
ROIC(5y)2.4%
ROICexc(3y)3.39%
ROICexc(5y)3.93%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)4.53%
ROCE(5y)4.12%
ROICexcg growth 3Y54.56%
ROICexcg growth 5Y-1.3%
ROICexc growth 3Y43.63%
ROICexc growth 5Y-21.27%
OM growth 3Y17.55%
OM growth 5Y-11.49%
PM growth 3YN/A
PM growth 5Y-34.27%
GM growth 3Y-3.35%
GM growth 5Y-1.14%
F-Score3
Asset Turnover0.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.14 | ||
| Cap/Depr | 49.83% | ||
| Cap/Sales | 8% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.26 | ||
| Quick Ratio | 1.06 | ||
| Altman-Z | 1.54 |
F-Score3
WACC12.7%
ROIC/WACC2.07
Cap/Depr(3y)85.96%
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
Growth
EPS 1Y75.29%
EPS 3YN/A
EPS 5Y-4.95%
EPS growth Q2Q-366.67%
EPS Next Y526.98%
EPS Next 2Y146.24%
EPS Next 3Y98.93%
EPS Next 5YN/A
Revenue growth 1Y30.47%
Revenue growth 3Y45.8%
Revenue growth 5Y48.68%
Revenue growth Q2Q14.27%
Revenue Next Year30.45%
Revenue Next 2Y28.3%
Revenue Next 3Y27.17%
Revenue Next 5YN/A
EBIT growth 1Y53.69%
EBIT growth 3Y71.39%
EBIT growth 5Y31.59%
EBIT Next Year153.81%
EBIT Next 3Y59.5%
EBIT Next 5YN/A
FCF growth 1Y-400.8%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-139.63%
OCF growth 3YN/A
OCF growth 5YN/A