ARIS WATER SOLUTIONS INC-A (ARIS)
US04041L1061 - Common Stock
We assign a fundamental rating of 4 out of 10 to ARIS. ARIS was compared to 84 industry peers in the Commercial Services & Supplies industry. ARIS has a medium profitability rating, but doesn't score so well on its financial health evaluation. ARIS has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year ARIS was profitable.
ARIS had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: ARIS reported negative net income in multiple years.
In the past 5 years ARIS always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of ARIS (1.41%) is comparable to the rest of the industry.
With a decent Return On Equity value of 5.83%, ARIS is doing good in the industry, outperforming 61.45% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 5.89%, ARIS is in line with its industry, outperforming 59.04% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ARIS is significantly below the industry average of 10.11%.
The 3 year average ROIC (4.86%) for ARIS is below the current ROIC(5.89%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.41% | ||
| ROE | 5.83% | ||
| ROIC | 5.89% |
ROA(3y)0.31%
ROA(5y)0.41%
ROE(3y)1.03%
ROE(5y)0.98%
ROIC(3y)4.86%
ROIC(5y)3.42%
1.3 Margins
ARIS has a Profit Margin of 4.82%. This is in the better half of the industry: ARIS outperforms 73.49% of its industry peers.
Looking at the Operating Margin, with a value of 21.26%, ARIS belongs to the top of the industry, outperforming 96.39% of the companies in the same industry.
In the last couple of years the Operating Margin of ARIS has grown nicely.
The Gross Margin of ARIS (35.07%) is better than 63.86% of its industry peers.
ARIS's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.26% | ||
| PM (TTM) | 4.82% | ||
| GM | 35.07% |
OM growth 3Y40.07%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y23.41%
GM growth 5YN/A
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.
Compared to 1 year ago, ARIS has more shares outstanding
The debt/assets ratio for ARIS has been reduced compared to a year ago.
2.2 Solvency
ARIS has an Altman-Z score of 1.00. This is a bad value and indicates that ARIS is not financially healthy and even has some risk of bankruptcy.
ARIS has a Altman-Z score of 1.00. This is in the lower half of the industry: ARIS underperforms 69.88% of its industry peers.
The Debt to FCF ratio of ARIS is 30.22, which is on the high side as it means it would take ARIS, 30.22 years of fcf income to pay off all of its debts.
ARIS has a Debt to FCF ratio (30.22) which is comparable to the rest of the industry.
ARIS has a Debt/Equity ratio of 1.30. This is a high value indicating a heavy dependency on external financing.
ARIS has a worse Debt to Equity ratio (1.30) than 72.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.3 | ||
| Debt/FCF | 30.22 | ||
| Altman-Z | 1 |
ROIC/WACC0.67
WACC8.74%
2.3 Liquidity
A Current Ratio of 1.12 indicates that ARIS should not have too much problems paying its short term obligations.
ARIS's Current ratio of 1.12 is on the low side compared to the rest of the industry. ARIS is outperformed by 71.08% of its industry peers.
ARIS has a Quick Ratio of 1.12. This is a normal value and indicates that ARIS is financially healthy and should not expect problems in meeting its short term obligations.
ARIS has a worse Quick ratio (1.12) than 60.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.32% over the past year.
Looking at the last year, ARIS shows a very strong growth in Revenue. The Revenue has grown by 22.15%.
The Revenue has been growing by 31.74% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)7.32%
EPS 3YN/A
EPS 5YN/A
EPS growth Q2Q333.33%
Revenue 1Y (TTM)22.15%
Revenue growth 3Y31.74%
Revenue growth 5YN/A
Revenue growth Q2Q25.65%
3.2 Future
Based on estimates for the next years, ARIS will show a very strong growth in Earnings Per Share. The EPS will grow by 21.35% on average per year.
Based on estimates for the next years, ARIS will show a small growth in Revenue. The Revenue will grow by 5.91% on average per year.
EPS Next Y23.34%
EPS Next 2Y18.17%
EPS Next 3Y13.97%
EPS Next 5Y21.35%
Revenue Next Year5.34%
Revenue Next 2Y6.65%
Revenue Next 3Y5.91%
Revenue Next 5YN/A
3.3 Evolution
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
The Price/Earnings ratio is 16.64, which indicates a correct valuation of ARIS.
ARIS's Price/Earnings ratio is a bit cheaper when compared to the industry. ARIS is cheaper than 78.31% of the companies in the same industry.
When comparing the Price/Earnings ratio of ARIS to the average of the S&P500 Index (28.28), we can say ARIS is valued slightly cheaper.
A Price/Forward Earnings ratio of 13.49 indicates a correct valuation of ARIS.
Based on the Price/Forward Earnings ratio, ARIS is valued cheaper than 80.72% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ARIS to the average of the S&P500 Index (20.88), we can say ARIS is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.64 | ||
| Fwd PE | 13.49 |
4.2 Price Multiples
79.52% of the companies in the same industry are more expensive than ARIS, based on the Enterprise Value to EBITDA ratio.
ARIS's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 60.16 | ||
| EV/EBITDA | 7.8 |
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.
The decent profitability rating of ARIS may justify a higher PE ratio.
ARIS's earnings are expected to grow with 13.97% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.71
PEG (5Y)N/A
EPS Next 2Y18.17%
EPS Next 3Y13.97%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.46%, ARIS has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.39, ARIS pays a better dividend. On top of this ARIS pays more dividend than 84.34% of the companies listed in the same industry.
ARIS's Dividend Yield is comparable with the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
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 Years0
Div Non Decr Years0
5.3 Sustainability
113.45% of the earnings are spent on dividend by ARIS. This is not a sustainable payout ratio.
DP113.45%
EPS Next 2Y18.17%
EPS Next 3Y13.97%
ARIS WATER SOLUTIONS INC-A
NYSE:ARIS (5/3/2024, 5:40:01 PM)
After market: 14.64 0 (0%)14.64
+0.42 (+2.95%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap850.44M
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS NQ rev (1m)
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EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.64 | ||
| Fwd PE | 13.49 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.71
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.41% | ||
| ROE | 5.83% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 21.26% | ||
| PM (TTM) | 4.82% | ||
| GM | 35.07% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.29
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.3 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.12 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)7.32%
EPS 3YN/A
EPS 5Y
EPS growth Q2Q
EPS Next Y23.34%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)22.15%
Revenue growth 3Y31.74%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
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OCF growth 5Y