ARIS WATER SOLUTIONS INC-A (ARIS) Stock Fundamental Analysis
NYSE:ARIS - New York Stock Exchange, Inc. - US04041L1061 - Common Stock - Currency: USD
Overall ARIS gets a fundamental rating of 5 out of 10. We evaluated ARIS against 62 industry peers in the Energy Equipment & Services industry. While ARIS is still in line with the averages on profitability rating, there are concerns on its financial health. ARIS is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
ARIS had positive earnings in the past year.
ARIS had a positive operating cash flow in the past year.
In multiple years ARIS reported negative net income over the last 5 years.
Each year in the past 5 years ARIS had a positive operating cash flow.
1.2 Ratios
ARIS's Return On Assets of 1.75% is on the low side compared to the rest of the industry. ARIS is outperformed by 67.74% of its industry peers.
ARIS has a Return On Equity (7.14%) which is comparable to the rest of the industry.
ARIS's Return On Invested Capital of 7.13% is in line compared to the rest of the industry. ARIS outperforms 54.84% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ARIS is below the industry average of 8.42%.
The last Return On Invested Capital (7.13%) for ARIS is above the 3 year average (5.83%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.75% | ||
| ROE | 7.14% | ||
| ROIC | 7.13% |
ROA(3y)1.1%
ROA(5y)0.45%
ROE(3y)4.51%
ROE(5y)1.92%
ROIC(3y)5.83%
ROIC(5y)4.48%
1.3 Margins
ARIS has a Profit Margin of 5.71%. This is comparable to the rest of the industry: ARIS outperforms 46.77% of its industry peers.
In the last couple of years the Profit Margin of ARIS has declined.
ARIS has a Operating Margin of 25.24%. This is amongst the best in the industry. ARIS outperforms 90.32% of its industry peers.
ARIS's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 40.85%, ARIS belongs to the best of the industry, outperforming 80.65% of the companies in the same industry.
In the last couple of years the Gross Margin of ARIS has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.24% | ||
| PM (TTM) | 5.71% | ||
| GM | 40.85% |
OM growth 3Y6.73%
OM growth 5Y20.3%
PM growth 3YN/A
PM growth 5Y-12.32%
GM growth 3Y6.48%
GM growth 5Y12.28%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ARIS is destroying value.
The number of shares outstanding for ARIS has been increased compared to 1 year ago.
Compared to 5 years ago, ARIS has more shares outstanding
The debt/assets ratio for ARIS has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.32, we must say that ARIS is in the distress zone and has some risk of bankruptcy.
ARIS has a worse Altman-Z score (1.32) than 66.13% of its industry peers.
ARIS has a debt to FCF ratio of 5.71. This is a neutral value as ARIS would need 5.71 years to pay back of all of its debts.
ARIS has a Debt to FCF ratio (5.71) which is comparable to the rest of the industry.
A Debt/Equity ratio of 1.27 is on the high side and indicates that ARIS has dependencies on debt financing.
The Debt to Equity ratio of ARIS (1.27) is worse than 82.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.27 | ||
| Debt/FCF | 5.71 | ||
| Altman-Z | 1.32 |
ROIC/WACC0.74
WACC9.6%
2.3 Liquidity
A Current Ratio of 1.22 indicates that ARIS should not have too much problems paying its short term obligations.
ARIS has a worse Current ratio (1.22) than 83.87% of its industry peers.
A Quick Ratio of 1.22 indicates that ARIS should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.22, ARIS is doing worse than 70.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 |
3. Growth
3.1 Past
ARIS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.95%, which is quite impressive.
Measured over the past years, ARIS shows a very strong growth in Earnings Per Share. The EPS has been growing by 27.41% on average per year.
Looking at the last year, ARIS shows a quite strong growth in Revenue. The Revenue has grown by 12.03% in the last year.
The Revenue has been growing by 29.67% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)20.95%
EPS 3YN/A
EPS 5Y27.41%
EPS Q2Q%2.94%
Revenue 1Y (TTM)12.03%
Revenue growth 3Y23.83%
Revenue growth 5Y29.67%
Sales Q2Q%16.52%
3.2 Future
ARIS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.58% yearly.
ARIS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.30% yearly.
EPS Next Y10.71%
EPS Next 2Y10.95%
EPS Next 3Y14.61%
EPS Next 5Y19.58%
Revenue Next Year13.49%
Revenue Next 2Y8.49%
Revenue Next 3Y8.01%
Revenue Next 5Y6.3%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 17.46, the valuation of ARIS can be described as rather expensive.
The rest of the industry has a similar Price/Earnings ratio as ARIS.
When comparing the Price/Earnings ratio of ARIS to the average of the S&P500 Index (27.48), we can say ARIS is valued slightly cheaper.
The Price/Forward Earnings ratio is 14.29, which indicates a correct valuation of ARIS.
Based on the Price/Forward Earnings ratio, ARIS is valued a bit more expensive than the industry average as 61.29% of the companies are valued more cheaply.
ARIS is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.52, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.46 | ||
| Fwd PE | 14.29 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARIS is valued more expensive than 80.65% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARIS is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.62 | ||
| EV/EBITDA | 9.12 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of ARIS may justify a higher PE ratio.
A more expensive valuation may be justified as ARIS's earnings are expected to grow with 14.61% in the coming years.
PEG (NY)1.63
PEG (5Y)0.64
EPS Next 2Y10.95%
EPS Next 3Y14.61%
5. Dividend
5.1 Amount
ARIS has a Yearly Dividend Yield of 2.44%. Purely for dividend investing, there may be better candidates out there.
ARIS's Dividend Yield is a higher than the industry average which is at 3.52.
Compared to an average S&P500 Dividend Yield of 2.34, ARIS has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.44% |
5.2 History
ARIS has been paying a dividend for less than 5 years, so it still needs to build a track record.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
98.70% of the earnings are spent on dividend by ARIS. This is not a sustainable payout ratio.
DP98.7%
EPS Next 2Y10.95%
EPS Next 3Y14.61%
22.17
+0.16 (+0.73%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners106.15%
Inst Owner Change0%
Ins Owners4.18%
Ins Owner Change2.51%
Market Cap1.31B
Analysts77.89
Price Target30.26 (36.49%)
Short Float %11.37%
Short Ratio4.5
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.44% |
Yearly Dividend0.42
Dividend Growth(5Y)N/A
DP98.7%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2%
Min EPS beat(2)-16.05%
Max EPS beat(2)12.04%
EPS beat(4)3
Avg EPS beat(4)13.63%
Min EPS beat(4)-16.05%
Max EPS beat(4)46.66%
EPS beat(8)7
Avg EPS beat(8)30.91%
EPS beat(12)9
Avg EPS beat(12)25.92%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)6.35%
Min Revenue beat(2)6.19%
Max Revenue beat(2)6.5%
Revenue beat(4)4
Avg Revenue beat(4)5.01%
Min Revenue beat(4)2.29%
Max Revenue beat(4)6.5%
Revenue beat(8)8
Avg Revenue beat(8)5.04%
Revenue beat(12)11
Avg Revenue beat(12)3.92%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)-8.72%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.96%
EPS NY rev (1m)-3.11%
EPS NY rev (3m)1.44%
Revenue NQ rev (1m)0.66%
Revenue NQ rev (3m)0.3%
Revenue NY rev (1m)-0.1%
Revenue NY rev (3m)0.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.46 | ||
| Fwd PE | 14.29 | ||
| P/S | 3.01 | ||
| P/FCF | 16.62 | ||
| P/OCF | 7.33 | ||
| P/B | 3.76 | ||
| P/tB | 11.04 | ||
| EV/EBITDA | 9.12 |
EPS(TTM)1.27
EY5.73%
EPS(NY)1.55
Fwd EY7%
FCF(TTM)1.33
FCFY6.02%
OCF(TTM)3.02
OCFY13.64%
SpS7.36
BVpS5.89
TBVpS2.01
PEG (NY)1.63
PEG (5Y)0.64
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.75% | ||
| ROE | 7.14% | ||
| ROCE | 8.36% | ||
| ROIC | 7.13% | ||
| ROICexc | 7.29% | ||
| ROICexgc | 8.87% | ||
| OM | 25.24% | ||
| PM (TTM) | 5.71% | ||
| GM | 40.85% | ||
| FCFM | 18.12% |
ROA(3y)1.1%
ROA(5y)0.45%
ROE(3y)4.51%
ROE(5y)1.92%
ROIC(3y)5.83%
ROIC(5y)4.48%
ROICexc(3y)5.9%
ROICexc(5y)4.57%
ROICexgc(3y)7.47%
ROICexgc(5y)6.05%
ROCE(3y)6.84%
ROCE(5y)5.25%
ROICexcg growth 3Y14.01%
ROICexcg growth 5Y32.54%
ROICexc growth 3Y22.24%
ROICexc growth 5Y40.48%
OM growth 3Y6.73%
OM growth 5Y20.3%
PM growth 3YN/A
PM growth 5Y-12.32%
GM growth 3Y6.48%
GM growth 5Y12.28%
F-Score9
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.27 | ||
| Debt/FCF | 5.71 | ||
| Debt/EBITDA | 2.35 | ||
| Cap/Depr | 126.31% | ||
| Cap/Sales | 22.96% | ||
| Interest Coverage | 3.32 | ||
| Cash Conversion | 94.61% | ||
| Profit Quality | 317.06% | ||
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 | ||
| Altman-Z | 1.32 |
F-Score9
WACC9.6%
ROIC/WACC0.74
Cap/Depr(3y)188.27%
Cap/Depr(5y)201.28%
Cap/Sales(3y)37.3%
Cap/Sales(5y)45.17%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)20.95%
EPS 3YN/A
EPS 5Y27.41%
EPS Q2Q%2.94%
EPS Next Y10.71%
EPS Next 2Y10.95%
EPS Next 3Y14.61%
EPS Next 5Y19.58%
Revenue 1Y (TTM)12.03%
Revenue growth 3Y23.83%
Revenue growth 5Y29.67%
Sales Q2Q%16.52%
Revenue Next Year13.49%
Revenue Next 2Y8.49%
Revenue Next 3Y8.01%
Revenue Next 5Y6.3%
EBIT growth 1Y31.87%
EBIT growth 3Y32.17%
EBIT growth 5Y55.99%
EBIT Next Year99.92%
EBIT Next 3Y32.25%
EBIT Next 5Y20.27%
FCF growth 1Y458.05%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-2.72%
OCF growth 3Y44.89%
OCF growth 5Y112.28%