ARKO CORP (ARKO) Stock Fundamental Analysis
NASDAQ:ARKO - Nasdaq - US0412421085 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to ARKO. ARKO was compared to 121 industry peers in the Specialty Retail industry. Both the profitability and the financial health of ARKO get a neutral evaluation. Nothing too spectacular is happening here. ARKO does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
ARKO had positive earnings in the past year.
In the past year ARKO had a positive cash flow from operations.
In the past 5 years ARKO has always been profitable.
Each year in the past 5 years ARKO had a positive operating cash flow.
1.2 Ratios
ARKO has a Return On Assets of 0.08%. This is comparable to the rest of the industry: ARKO outperforms 48.76% of its industry peers.
ARKO's Return On Equity of 0.85% is in line compared to the rest of the industry. ARKO outperforms 57.85% of its industry peers.
With a Return On Invested Capital value of 2.35%, ARKO perfoms like the industry average, outperforming 47.11% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ARKO is significantly below the industry average of 13.07%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.08% | ||
| ROE | 0.85% | ||
| ROIC | 2.35% |
ROA(3y)1.08%
ROA(5y)1.09%
ROE(3y)9.65%
ROE(5y)9.47%
ROIC(3y)3.4%
ROIC(5y)3.4%
1.3 Margins
ARKO has a Profit Margin (0.04%) which is in line with its industry peers.
ARKO's Profit Margin has declined in the last couple of years.
ARKO has a Operating Margin (1.15%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of ARKO has grown nicely.
Looking at the Gross Margin, with a value of 14.71%, ARKO is doing worse than 88.43% of the companies in the same industry.
In the last couple of years the Gross Margin of ARKO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.15% | ||
| PM (TTM) | 0.04% | ||
| GM | 14.71% |
OM growth 3Y-14.11%
OM growth 5Y107.59%
PM growth 3Y-37.88%
PM growth 5YN/A
GM growth 3Y2.7%
GM growth 5Y-1.33%
2. Health
2.1 Basic Checks
ARKO 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, ARKO has less shares outstanding
ARKO has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, ARKO has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.66 indicates that ARKO is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.66, ARKO is in the better half of the industry, outperforming 61.16% of the companies in the same industry.
The Debt to FCF ratio of ARKO is 7.84, which is on the high side as it means it would take ARKO, 7.84 years of fcf income to pay off all of its debts.
ARKO's Debt to FCF ratio of 7.84 is in line compared to the rest of the industry. ARKO outperforms 59.50% of its industry peers.
ARKO has a Debt/Equity ratio of 3.03. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 3.03, ARKO is doing worse than 75.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.03 | ||
| Debt/FCF | 7.84 | ||
| Altman-Z | 2.66 |
ROIC/WACC0.26
WACC8.96%
2.3 Liquidity
ARKO has a Current Ratio of 1.55. This is a normal value and indicates that ARKO is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Current ratio value of 1.55, ARKO is doing good in the industry, outperforming 66.12% of the companies in the same industry.
ARKO has a Quick Ratio of 1.08. This is a normal value and indicates that ARKO is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.08, ARKO is in the better half of the industry, outperforming 78.51% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.55 | ||
| Quick Ratio | 1.08 |
3. Growth
3.1 Past
The earnings per share for ARKO have decreased strongly by -88.46% in the last year.
The earnings per share for ARKO have been decreasing by -33.40% on average. This is quite bad
The Revenue has decreased by -9.67% in the past year.
ARKO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.16% yearly.
EPS 1Y (TTM)-88.46%
EPS 3Y-33.4%
EPS 5YN/A
EPS Q2Q%-500%
Revenue 1Y (TTM)-9.67%
Revenue growth 3Y5.59%
Revenue growth 5Y16.16%
Sales Q2Q%-11.75%
3.2 Future
The Earnings Per Share is expected to decrease by -16.62% on average over the next years. This is quite bad
ARKO is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -3.48% yearly.
EPS Next Y-16.31%
EPS Next 2Y-43.98%
EPS Next 3Y-30.75%
EPS Next 5Y-16.62%
Revenue Next Year-11.11%
Revenue Next 2Y-6.56%
Revenue Next 3Y-5.09%
Revenue Next 5Y-3.48%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 154.67, the valuation of ARKO can be described as expensive.
ARKO's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.45, ARKO is valued quite expensively.
Based on the Price/Forward Earnings ratio of 113.73, the valuation of ARKO can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ARKO indicates a slightly more expensive valuation: ARKO is more expensive than 63.64% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.90. ARKO is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 154.67 | ||
| Fwd PE | 113.73 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARKO is valued cheaply inside the industry as 80.99% of the companies are valued more expensively.
ARKO's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ARKO is cheaper than 95.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.77 | ||
| EV/EBITDA | 5.8 |
4.3 Compensation for Growth
A cheap valuation may be justified as ARKO's earnings are expected to decrease with -30.75% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-43.98%
EPS Next 3Y-30.75%
5. Dividend
5.1 Amount
ARKO has a Yearly Dividend Yield of 2.75%.
Compared to an average industry Dividend Yield of 5.27, ARKO pays a better dividend. On top of this ARKO pays more dividend than 87.60% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, ARKO has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.75% |
5.2 History
ARKO 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 Years2
5.3 Sustainability
652.77% of the earnings are spent on dividend by ARKO. This is not a sustainable payout ratio.
DP652.77%
EPS Next 2Y-43.98%
EPS Next 3Y-30.75%
4.64
+0.02 (+0.43%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners58.42%
Inst Owner Change5.69%
Ins Owners11.76%
Ins Owner Change1.86%
Market Cap528.73M
Analysts80
Price Target7.01 (51.08%)
Short Float %6.97%
Short Ratio8.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.75% |
Yearly Dividend0.17
Dividend Growth(5Y)N/A
DP652.77%
Div Incr Years0
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-230.68%
Min EPS beat(2)-492.16%
Max EPS beat(2)30.8%
EPS beat(4)2
Avg EPS beat(4)-105.8%
Min EPS beat(4)-492.16%
Max EPS beat(4)79.74%
EPS beat(8)4
Avg EPS beat(8)-56.44%
EPS beat(12)5
Avg EPS beat(12)-52.54%
EPS beat(16)6
Avg EPS beat(16)-43.03%
Revenue beat(2)0
Avg Revenue beat(2)-5.62%
Min Revenue beat(2)-8.37%
Max Revenue beat(2)-2.87%
Revenue beat(4)0
Avg Revenue beat(4)-4.85%
Min Revenue beat(4)-8.37%
Max Revenue beat(4)-0.82%
Revenue beat(8)2
Avg Revenue beat(8)-3.31%
Revenue beat(12)3
Avg Revenue beat(12)-3.04%
Revenue beat(16)5
Avg Revenue beat(16)-2.77%
PT rev (1m)-5.17%
PT rev (3m)-5.98%
EPS NQ rev (1m)-20.83%
EPS NQ rev (3m)-19.15%
EPS NY rev (1m)39.13%
EPS NY rev (3m)137.04%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.04%
Revenue NY rev (1m)-0.21%
Revenue NY rev (3m)-1.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 154.67 | ||
| Fwd PE | 113.73 | ||
| P/S | 0.06 | ||
| P/FCF | 3.77 | ||
| P/OCF | 2.09 | ||
| P/B | 1.49 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.8 |
EPS(TTM)0.03
EY0.65%
EPS(NY)0.04
Fwd EY0.88%
FCF(TTM)1.23
FCFY26.56%
OCF(TTM)2.22
OCFY47.76%
SpS74.49
BVpS3.12
TBVpS-1.07
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.08% | ||
| ROE | 0.85% | ||
| ROCE | 3.11% | ||
| ROIC | 2.35% | ||
| ROICexc | 2.57% | ||
| ROICexgc | 3.08% | ||
| OM | 1.15% | ||
| PM (TTM) | 0.04% | ||
| GM | 14.71% | ||
| FCFM | 1.65% |
ROA(3y)1.08%
ROA(5y)1.09%
ROE(3y)9.65%
ROE(5y)9.47%
ROIC(3y)3.4%
ROIC(5y)3.4%
ROICexc(3y)3.74%
ROICexc(5y)3.8%
ROICexgc(3y)4.49%
ROICexgc(5y)4.59%
ROCE(3y)4.5%
ROCE(5y)4.5%
ROICexcg growth 3Y-17.3%
ROICexcg growth 5Y113.37%
ROICexc growth 3Y-17.08%
ROICexc growth 5Y110.52%
OM growth 3Y-14.11%
OM growth 5Y107.59%
PM growth 3Y-37.88%
PM growth 5YN/A
GM growth 3Y2.7%
GM growth 5Y-1.33%
F-Score6
Asset Turnover2.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.03 | ||
| Debt/FCF | 7.84 | ||
| Debt/EBITDA | 4.61 | ||
| Cap/Depr | 82.66% | ||
| Cap/Sales | 1.32% | ||
| Interest Coverage | 1.07 | ||
| Cash Conversion | 108.28% | ||
| Profit Quality | 4660.7% | ||
| Current Ratio | 1.55 | ||
| Quick Ratio | 1.08 | ||
| Altman-Z | 2.66 |
F-Score6
WACC8.96%
ROIC/WACC0.26
Cap/Depr(3y)90.08%
Cap/Depr(5y)112.67%
Cap/Sales(3y)1.19%
Cap/Sales(5y)1.55%
Profit Quality(3y)323.16%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-88.46%
EPS 3Y-33.4%
EPS 5YN/A
EPS Q2Q%-500%
EPS Next Y-16.31%
EPS Next 2Y-43.98%
EPS Next 3Y-30.75%
EPS Next 5Y-16.62%
Revenue 1Y (TTM)-9.67%
Revenue growth 3Y5.59%
Revenue growth 5Y16.16%
Sales Q2Q%-11.75%
Revenue Next Year-11.11%
Revenue Next 2Y-6.56%
Revenue Next 3Y-5.09%
Revenue Next 5Y-3.48%
EBIT growth 1Y-27.2%
EBIT growth 3Y-9.31%
EBIT growth 5Y141.14%
EBIT Next Year135.49%
EBIT Next 3Y32.83%
EBIT Next 5Y17.63%
FCF growth 1Y50.03%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y29.42%
OCF growth 3Y11.7%
OCF growth 5Y38.65%