ARIS WATER SOLUTIONS INC-A (ARIS) Stock Fundamental Analysis
NYSE:ARIS - New York Stock Exchange, Inc. - US04041L1061 - Common Stock - Currency: USD
Taking everything into account, ARIS scores 5 out of 10 in our fundamental rating. ARIS was compared to 61 industry peers in the Energy Equipment & Services industry. There are concerns on the financial health of ARIS while its profitability can be described as average. 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.
In the past year ARIS had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: ARIS reported negative net income in multiple years.
Each year in the past 5 years ARIS had a positive operating cash flow.
1.2 Ratios
ARIS has a worse Return On Assets (1.75%) than 67.21% of its industry peers.
ARIS has a Return On Equity (7.14%) which is comparable to the rest of the industry.
The Return On Invested Capital of ARIS (7.13%) is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for ARIS is below the industry average of 8.08%.
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
Looking at the Profit Margin, with a value of 5.71%, ARIS is in line with its industry, outperforming 54.10% of the companies in the same industry.
In the last couple of years the Profit Margin of ARIS has declined.
The Operating Margin of ARIS (25.24%) is better than 91.80% of its industry peers.
In the last couple of years the Operating Margin of ARIS has grown nicely.
Looking at the Gross Margin, with a value of 40.85%, ARIS belongs to the top of the industry, outperforming 80.33% 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
ARIS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
ARIS has more shares outstanding than it did 1 year ago.
ARIS has more shares outstanding than it did 5 years ago.
ARIS has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.38, we must say that ARIS is in the distress zone and has some risk of bankruptcy.
ARIS has a worse Altman-Z score (1.38) than 65.57% of its industry peers.
The Debt to FCF ratio of ARIS is 5.71, which is a neutral value as it means it would take ARIS, 5.71 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.71, ARIS is in line with its industry, outperforming 47.54% of the companies in the same industry.
ARIS has a Debt/Equity ratio of 1.27. This is a high value indicating a heavy dependency on external financing.
ARIS has a worse Debt to Equity ratio (1.27) than 81.97% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.27 | ||
| Debt/FCF | 5.71 | ||
| Altman-Z | 1.38 |
ROIC/WACC0.78
WACC9.15%
2.3 Liquidity
ARIS has a Current Ratio of 1.22. This is a normal value and indicates that ARIS is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of ARIS (1.22) is worse than 83.61% of its industry peers.
A Quick Ratio of 1.22 indicates that ARIS should not have too much problems paying its short term obligations.
The Quick ratio of ARIS (1.22) is worse than 68.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 20.95% over the past year.
The Earnings Per Share has been growing by 27.41% on average over the past years. This is a very strong growth
ARIS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.03%.
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
Based on estimates for the next years, ARIS will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.58% on average per year.
The Revenue is expected to grow by 6.30% on average over the next years.
EPS Next Y10.71%
EPS Next 2Y10.95%
EPS Next 3Y14.61%
EPS Next 5Y19.58%
Revenue Next Year13.52%
Revenue Next 2Y8.51%
Revenue Next 3Y8.02%
Revenue Next 5Y6.3%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
A Price/Earnings ratio of 18.60 indicates a rather expensive valuation of ARIS.
Compared to the rest of the industry, the Price/Earnings ratio of ARIS is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 26.48, ARIS is valued a bit cheaper.
The Price/Forward Earnings ratio is 15.23, which indicates a correct valuation of ARIS.
Based on the Price/Forward Earnings ratio, ARIS is valued a bit more expensive than 67.21% of the companies in the same industry.
ARIS's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 34.04.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.6 | ||
| Fwd PE | 15.23 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARIS indicates a rather expensive valuation: ARIS more expensive than 83.61% of the companies listed in the same industry.
ARIS's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.71 | ||
| EV/EBITDA | 9.67 |
4.3 Compensation for Growth
ARIS's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ARIS has a very decent profitability rating, which may justify a higher PE ratio.
ARIS's earnings are expected to grow with 14.61% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.74
PEG (5Y)0.68
EPS Next 2Y10.95%
EPS Next 3Y14.61%
5. Dividend
5.1 Amount
ARIS has a Yearly Dividend Yield of 2.35%.
Compared to an average industry Dividend Yield of 3.82, ARIS pays a bit more dividend than its industry peers.
ARIS's Dividend Yield is comparable with the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.35% |
5.2 History
ARIS has paid a dividend for less than 5 years, so there is no long track record yet.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
ARIS pays out 98.70% of its income as dividend. This is not a sustainable payout ratio.
DP98.7%
EPS Next 2Y10.95%
EPS Next 3Y14.61%
23.62
-0.16 (-0.67%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners109.68%
Inst Owner Change-0.01%
Ins Owners4.18%
Ins Owner Change2.51%
Market Cap1.40B
Analysts77.89
Price Target29.92 (26.67%)
Short Float %9.99%
Short Ratio4.21
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.35% |
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)-0.56%
PT rev (3m)-10.38%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)-0.24%
EPS NY rev (3m)1.47%
Revenue NQ rev (1m)0.66%
Revenue NQ rev (3m)0.66%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)0.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.6 | ||
| Fwd PE | 15.23 | ||
| P/S | 3.21 | ||
| P/FCF | 17.71 | ||
| P/OCF | 7.81 | ||
| P/B | 4.01 | ||
| P/tB | 11.76 | ||
| EV/EBITDA | 9.67 |
EPS(TTM)1.27
EY5.38%
EPS(NY)1.55
Fwd EY6.57%
FCF(TTM)1.33
FCFY5.65%
OCF(TTM)3.02
OCFY12.81%
SpS7.36
BVpS5.89
TBVpS2.01
PEG (NY)1.74
PEG (5Y)0.68
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 | 1.38 |
F-Score9
WACC9.15%
ROIC/WACC0.78
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 Year13.52%
Revenue Next 2Y8.51%
Revenue Next 3Y8.02%
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%