ARIS WATER SOLUTIONS INC-A (ARIS) Stock Fundamental Analysis
NYSE:ARIS - New York Stock Exchange, Inc. - US04041L1061 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to ARIS. ARIS was compared to 63 industry peers in the Energy Equipment & Services industry. ARIS has a medium profitability rating, but doesn't score so well on its financial health evaluation. ARIS is valued quite expensively, but it does show have an excellent growth rating.
1. Profitability
1.1 Basic Checks
In the past year ARIS was profitable.
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 66.67% of its industry peers.
The Return On Equity of ARIS (7.14%) is comparable to the rest of the industry.
With a Return On Invested Capital value of 7.13%, ARIS perfoms like the industry average, outperforming 53.97% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ARIS is below the industry average of 8.50%.
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's Profit Margin of 5.71% is in line compared to the rest of the industry. ARIS outperforms 47.62% of its industry peers.
In the last couple of years the Profit Margin of ARIS has declined.
The Operating Margin of ARIS (25.24%) is better than 90.48% of its industry peers.
ARIS's Operating Margin has improved in the last couple of years.
ARIS has a Gross Margin of 40.85%. This is amongst the best in the industry. ARIS outperforms 80.95% of its industry peers.
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ARIS is destroying value.
Compared to 1 year ago, ARIS has more shares outstanding
ARIS has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ARIS has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.43, we must say that ARIS is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.43, ARIS is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
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.
The Debt to FCF ratio of ARIS (5.71) is comparable to the rest of the 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 82.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.27 | ||
| Debt/FCF | 5.71 | ||
| Altman-Z | 1.43 |
ROIC/WACC0.75
WACC9.57%
2.3 Liquidity
A Current Ratio of 1.22 indicates that ARIS should not have too much problems paying its short term obligations.
The Current ratio of ARIS (1.22) is worse than 84.13% 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 71.43% of its industry peers.
| 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.
The Earnings Per Share has been growing by 27.41% on average over the past years. This is a very strong growth
The Revenue has grown by 12.03% in the past year. This is quite good.
Measured over the past years, ARIS shows a very strong growth in Revenue. The Revenue has been growing by 29.67% on average per year.
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
The Earnings Per Share is expected to grow by 19.58% on average over the next years. This is quite good.
Based on estimates for the next years, ARIS will show a small growth in Revenue. The Revenue will grow by 6.30% on average per year.
EPS Next Y14.26%
EPS Next 2Y13.39%
EPS Next 3Y16.64%
EPS Next 5Y19.58%
Revenue Next Year13.61%
Revenue Next 2Y8.59%
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
The Price/Earnings ratio is 20.09, which indicates a rather expensive current valuation of ARIS.
ARIS's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 26.60, ARIS is valued a bit cheaper.
ARIS is valuated correctly with a Price/Forward Earnings ratio of 15.75.
Based on the Price/Forward Earnings ratio, ARIS is valued a bit more expensive than the industry average as 61.90% of the companies are valued more cheaply.
The average S&P500 Price/Forward Earnings ratio is at 22.39. ARIS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.09 | ||
| Fwd PE | 15.75 |
4.2 Price Multiples
85.71% of the companies in the same industry are cheaper 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 | 19.13 | ||
| EV/EBITDA | 10.11 |
4.3 Compensation for Growth
ARIS's 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 16.64% in the coming years.
PEG (NY)1.41
PEG (5Y)0.73
EPS Next 2Y13.39%
EPS Next 3Y16.64%
5. Dividend
5.1 Amount
ARIS has a Yearly Dividend Yield of 2.35%.
ARIS's Dividend Yield is a higher than the industry average which is at 3.73.
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 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 2Y13.39%
EPS Next 3Y16.64%
25.52
+0.32 (+1.27%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryEnergy Equipment & Services
Earnings (Last)
Earnings (Next)
Inst Owners86.92%
Inst Owner Change25.31%
Ins Owners2.97%
Ins Owner Change2.28%
Market Cap1.51B
Analysts77.89
Price Target30.26 (18.57%)
Short Float %9.57%
Short Ratio3.51
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)-9.64%
PT rev (3m)-0.27%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-10.2%
EPS NY rev (1m)4.73%
EPS NY rev (3m)-5.17%
Revenue NQ rev (1m)0.66%
Revenue NQ rev (3m)4.33%
Revenue NY rev (1m)-0.1%
Revenue NY rev (3m)4.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.09 | ||
| Fwd PE | 15.75 | ||
| P/S | 3.47 | ||
| P/FCF | 19.13 | ||
| P/OCF | 8.44 | ||
| P/B | 4.33 | ||
| P/tB | 12.7 | ||
| EV/EBITDA | 10.11 |
EPS(TTM)1.27
EY4.98%
EPS(NY)1.62
Fwd EY6.35%
FCF(TTM)1.33
FCFY5.23%
OCF(TTM)3.02
OCFY11.85%
SpS7.36
BVpS5.89
TBVpS2.01
PEG (NY)1.41
PEG (5Y)0.73
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 | 1.43 |
F-Score9
WACC9.57%
ROIC/WACC0.75
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 Y14.26%
EPS Next 2Y13.39%
EPS Next 3Y16.64%
EPS Next 5Y19.58%
Revenue 1Y (TTM)12.03%
Revenue growth 3Y23.83%
Revenue growth 5Y29.67%
Sales Q2Q%16.52%
Revenue Next Year13.61%
Revenue Next 2Y8.59%
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%