ARKO CORP (ARKO)
US0412421085 - Common Stock
We assign a fundamental rating of 4 out of 10 to ARKO. ARKO was compared to 126 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. While showing a medium growth rate, ARKO is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year ARKO was profitable.
ARKO had a positive operating cash flow in the past year.
ARKO had positive earnings in 4 of the past 5 years.
ARKO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 0.85%, ARKO is in line with its industry, outperforming 52.38% of the companies in the same industry.
ARKO's Return On Equity of 8.48% is fine compared to the rest of the industry. ARKO outperforms 65.87% of its industry peers.
With a Return On Invested Capital value of 3.01%, ARKO perfoms like the industry average, outperforming 51.59% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ARKO is significantly below the industry average of 13.62%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.85% | ||
| ROE | 8.48% | ||
| ROIC | 3.01% |
ROA(3y)1.54%
ROA(5y)0.53%
ROE(3y)13.36%
ROE(5y)-4.55%
ROIC(3y)3.81%
ROIC(5y)2.78%
1.3 Margins
ARKO has a Profit Margin (0.33%) which is in line with its industry peers.
In the last couple of years the Profit Margin of ARKO has grown nicely.
ARKO has a Operating Margin of 1.43%. This is comparable to the rest of the industry: ARKO outperforms 48.41% of its industry peers.
In the last couple of years the Operating Margin of ARKO has grown nicely.
ARKO has a worse Gross Margin (13.85%) than 89.68% of its industry peers.
ARKO's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.43% | ||
| PM (TTM) | 0.33% | ||
| GM | 13.85% |
OM growth 3Y-7.87%
OM growth 5Y12.13%
PM growth 3Y5.44%
PM growth 5Y2.36%
GM growth 3Y-11.57%
GM growth 5Y-1.94%
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.
The number of shares outstanding for ARKO has been reduced compared to 1 year ago.
Compared to 5 years ago, ARKO has less shares outstanding
The debt/assets ratio for ARKO has been reduced compared to a year ago.
2.2 Solvency
ARKO has an Altman-Z score of 2.95. This is not the best score and indicates that ARKO is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of ARKO (2.95) is better than 65.87% of its industry peers.
ARKO has a debt to FCF ratio of 69.54. This is a negative value and a sign of low solvency as ARKO would need 69.54 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 69.54, ARKO is in line with its industry, outperforming 44.44% of the companies in the same industry.
ARKO has a Debt/Equity ratio of 2.99. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 2.99, ARKO is not doing good in the industry: 74.60% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.99 | ||
| Debt/FCF | 69.54 | ||
| Altman-Z | 2.95 |
ROIC/WACC0.34
WACC8.85%
2.3 Liquidity
ARKO has a Current Ratio of 1.53. This is a normal value and indicates that ARKO is financially healthy and should not expect problems in meeting its short term obligations.
ARKO has a Current ratio of 1.53. This is comparable to the rest of the industry: ARKO outperforms 53.97% of its industry peers.
A Quick Ratio of 1.01 indicates that ARKO should not have too much problems paying its short term obligations.
ARKO has a Quick ratio of 1.01. This is in the better half of the industry: ARKO outperforms 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.53 | ||
| Quick Ratio | 1.01 |
3. Growth
3.1 Past
The earnings per share for ARKO have decreased strongly by -44.68% in the last year.
ARKO shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 21.60% yearly.
The Revenue has been growing slightly by 1.49% in the past year.
The Revenue has been growing by 18.29% on average over the past years. This is quite good.
EPS 1Y (TTM)-44.68%
EPS 3Y16.84%
EPS 5Y21.6%
EPS growth Q2Q33.33%
Revenue 1Y (TTM)1.49%
Revenue growth 3Y32.9%
Revenue growth 5Y18.29%
Revenue growth Q2Q-0.77%
3.2 Future
Based on estimates for the next years, ARKO will show a very strong growth in Earnings Per Share. The EPS will grow by 54.60% on average per year.
Based on estimates for the next years, ARKO will show a small growth in Revenue. The Revenue will grow by 1.44% on average per year.
EPS Next Y-71.44%
EPS Next 2Y-63.12%
EPS Next 3Y25.11%
EPS Next 5Y54.6%
Revenue Next Year-3.99%
Revenue Next 2Y-1.95%
Revenue Next 3Y2.84%
Revenue Next 5Y1.44%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last 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
ARKO is valuated rather expensively with a Price/Earnings ratio of 21.31.
Based on the Price/Earnings ratio, ARKO is valued a bit cheaper than 66.67% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.32, ARKO is valued a bit cheaper.
ARKO is valuated quite expensively with a Price/Forward Earnings ratio of 162.96.
Based on the Price/Forward Earnings ratio, ARKO is valued a bit more expensive than 61.90% of the companies in the same industry.
ARKO is valuated expensively when we compare the Price/Forward Earnings ratio to 20.24, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.31 | ||
| Fwd PE | 162.96 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARKO is valued cheaply inside the industry as 80.95% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARKO is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.3 | ||
| EV/EBITDA | 5.74 |
4.3 Compensation for Growth
A more expensive valuation may be justified as ARKO's earnings are expected to grow with 25.11% in the coming years.
PEG (NY)N/A
PEG (5Y)0.99
EPS Next 2Y-63.12%
EPS Next 3Y25.11%
5. Dividend
5.1 Amount
ARKO has a Yearly Dividend Yield of 2.28%.
The stock price of ARKO dropped by -31.09% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 3.38, ARKO pays a better dividend. On top of this ARKO pays more dividend than 85.71% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, ARKO has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.28% |
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 Years1
Div Non Decr Years1
5.3 Sustainability
65.42% of the earnings are spent on dividend by ARKO. This is not a sustainable payout ratio.
DP65.42%
EPS Next 2Y-63.12%
EPS Next 3Y25.11%
ARKO CORP
NASDAQ:ARKO (5/13/2024, 7:12:21 PM)
After market: 5.54 0 (0%)5.54
+0.28 (+5.32%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap641.20M
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.28% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.31 | ||
| Fwd PE | 162.96 | ||
| 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)N/A
PEG (5Y)0.99
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.85% | ||
| ROE | 8.48% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 1.43% | ||
| PM (TTM) | 0.33% | ||
| GM | 13.85% | ||
| 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 Turnover2.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.99 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.53 | ||
| Quick Ratio | 1.01 | ||
| 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)-44.68%
EPS 3Y16.84%
EPS 5Y
EPS growth Q2Q
EPS Next Y-71.44%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)1.49%
Revenue growth 3Y32.9%
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
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y