ARAMARK (ARMK) Stock Fundamental Analysis
NYSE:ARMK - New York Stock Exchange, Inc. - US03852U1060 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to ARMK. ARMK was compared to 131 industry peers in the Hotels, Restaurants & Leisure industry. ARMK has an average financial health and profitability rating. ARMK has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year ARMK was profitable.
In the past year ARMK had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: ARMK reported negative net income in multiple years.
In the past 5 years ARMK always reported a positive cash flow from operatings.
1.2 Ratios
ARMK has a Return On Assets of 2.58%. This is comparable to the rest of the industry: ARMK outperforms 51.15% of its industry peers.
The Return On Equity of ARMK (11.52%) is better than 70.99% of its industry peers.
ARMK has a Return On Invested Capital of 5.66%. This is comparable to the rest of the industry: ARMK outperforms 51.15% of its industry peers.
ARMK had an Average Return On Invested Capital over the past 3 years of 4.93%. This is significantly below the industry average of 15.80%.
The last Return On Invested Capital (5.66%) for ARMK is above the 3 year average (4.93%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.58% | ||
| ROE | 11.52% | ||
| ROIC | 5.66% |
ROA(3y)2.45%
ROA(5y)0.76%
ROE(3y)11.07%
ROE(5y)2.59%
ROIC(3y)4.93%
ROIC(5y)N/A
1.3 Margins
ARMK has a Profit Margin (1.97%) which is in line with its industry peers.
ARMK's Profit Margin has declined in the last couple of years.
ARMK has a worse Operating Margin (4.38%) than 65.65% of its industry peers.
ARMK's Operating Margin has been stable in the last couple of years.
ARMK has a Gross Margin of 8.47%. This is amonst the worse of the industry: ARMK underperforms 90.84% of its industry peers.
ARMK's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.38% | ||
| PM (TTM) | 1.97% | ||
| GM | 8.47% |
OM growth 3Y40.47%
OM growth 5Y-1.21%
PM growth 3YN/A
PM growth 5Y-11.42%
GM growth 3Y5.79%
GM growth 5Y8.33%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ARMK is destroying value.
The number of shares outstanding for ARMK has been increased compared to 1 year ago.
ARMK has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ARMK has an improved debt to assets ratio.
2.2 Solvency
ARMK has an Altman-Z score of 2.18. This is not the best score and indicates that ARMK is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of ARMK (2.18) is comparable to the rest of the industry.
The Debt to FCF ratio of ARMK is 17.61, which is on the high side as it means it would take ARMK, 17.61 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ARMK (17.61) is comparable to the rest of the industry.
ARMK has a Debt/Equity ratio of 2.02. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of ARMK (2.02) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.02 | ||
| Debt/FCF | 17.61 | ||
| Altman-Z | 2.18 |
ROIC/WACC0.82
WACC6.92%
2.3 Liquidity
A Current Ratio of 1.21 indicates that ARMK should not have too much problems paying its short term obligations.
ARMK's Current ratio of 1.21 is fine compared to the rest of the industry. ARMK outperforms 62.60% of its industry peers.
ARMK has a Quick Ratio of 1.08. This is a normal value and indicates that ARMK is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of ARMK (1.08) is better than 60.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.21 | ||
| Quick Ratio | 1.08 |
3. Growth
3.1 Past
ARMK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.48%, which is quite good.
ARMK shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.10% yearly.
ARMK shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.19%.
ARMK shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.41% yearly.
EPS 1Y (TTM)8.48%
EPS 3YN/A
EPS 5Y-7.1%
EPS Q2Q%29.03%
Revenue 1Y (TTM)8.19%
Revenue growth 3Y12.89%
Revenue growth 5Y1.41%
Sales Q2Q%5.72%
3.2 Future
The Earnings Per Share is expected to grow by 15.91% on average over the next years. This is quite good.
Based on estimates for the next years, ARMK will show a small growth in Revenue. The Revenue will grow by 6.45% on average per year.
EPS Next Y27.46%
EPS Next 2Y22.52%
EPS Next 3Y20.39%
EPS Next 5Y15.91%
Revenue Next Year6.89%
Revenue Next 2Y6.13%
Revenue Next 3Y6.07%
Revenue Next 5Y6.45%
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 accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
ARMK is valuated rather expensively with a Price/Earnings ratio of 22.13.
Based on the Price/Earnings ratio, ARMK is valued a bit cheaper than the industry average as 64.89% of the companies are valued more expensively.
ARMK is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.54, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 17.03, which indicates a rather expensive current valuation of ARMK.
Based on the Price/Forward Earnings ratio, ARMK is valued a bit cheaper than the industry average as 67.18% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of ARMK to the average of the S&P500 Index (35.28), we can say ARMK is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.13 | ||
| Fwd PE | 17.03 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ARMK.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARMK indicates a somewhat cheap valuation: ARMK is cheaper than 64.89% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.98 | ||
| EV/EBITDA | 12.97 |
4.3 Compensation for Growth
ARMK's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as ARMK's earnings are expected to grow with 20.39% in the coming years.
PEG (NY)0.81
PEG (5Y)N/A
EPS Next 2Y22.52%
EPS Next 3Y20.39%
5. Dividend
5.1 Amount
ARMK has a Yearly Dividend Yield of 1.07%.
ARMK's Dividend Yield is a higher than the industry average which is at 6.38.
Compared to an average S&P500 Dividend Yield of 2.40, ARMK's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.07% |
5.2 History
The dividend of ARMK decreases each year by -2.79%.
ARMK has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-2.79%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
ARMK pays out 30.38% of its income as dividend. This is a sustainable payout ratio.
DP30.38%
EPS Next 2Y22.52%
EPS Next 3Y20.39%
39.62
+0.5 (+1.28%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners101.67%
Inst Owner Change-0.21%
Ins Owners0.53%
Ins Owner Change0.01%
Market Cap10.38B
Analysts81.9
Price Target46.04 (16.2%)
Short Float %3.12%
Short Ratio5.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.07% |
Yearly Dividend0.38
Dividend Growth(5Y)-2.79%
DP30.38%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.05%
Min EPS beat(2)1.94%
Max EPS beat(2)4.17%
EPS beat(4)3
Avg EPS beat(4)1.47%
Min EPS beat(4)-0.77%
Max EPS beat(4)4.17%
EPS beat(8)6
Avg EPS beat(8)3.04%
EPS beat(12)8
Avg EPS beat(12)2.15%
EPS beat(16)10
Avg EPS beat(16)8.41%
Revenue beat(2)0
Avg Revenue beat(2)-3.5%
Min Revenue beat(2)-3.64%
Max Revenue beat(2)-3.35%
Revenue beat(4)0
Avg Revenue beat(4)-2.62%
Min Revenue beat(4)-3.64%
Max Revenue beat(4)-0.5%
Revenue beat(8)3
Avg Revenue beat(8)-1.33%
Revenue beat(12)6
Avg Revenue beat(12)-1.04%
Revenue beat(16)9
Avg Revenue beat(16)-0.58%
PT rev (1m)1.36%
PT rev (3m)2.93%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.18%
EPS NY rev (1m)0.05%
EPS NY rev (3m)1.28%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.48%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)-0.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.13 | ||
| Fwd PE | 17.03 | ||
| P/S | 0.59 | ||
| P/FCF | 27.98 | ||
| P/OCF | 12.49 | ||
| P/B | 3.44 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.97 |
EPS(TTM)1.79
EY4.52%
EPS(NY)2.33
Fwd EY5.87%
FCF(TTM)1.42
FCFY3.57%
OCF(TTM)3.17
OCFY8%
SpS67.25
BVpS11.52
TBVpS-14.08
PEG (NY)0.81
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.58% | ||
| ROE | 11.52% | ||
| ROCE | 7.49% | ||
| ROIC | 5.66% | ||
| ROICexc | 6.21% | ||
| ROICexgc | 21.8% | ||
| OM | 4.38% | ||
| PM (TTM) | 1.97% | ||
| GM | 8.47% | ||
| FCFM | 2.11% |
ROA(3y)2.45%
ROA(5y)0.76%
ROE(3y)11.07%
ROE(5y)2.59%
ROIC(3y)4.93%
ROIC(5y)N/A
ROICexc(3y)5.48%
ROICexc(5y)N/A
ROICexgc(3y)26.7%
ROICexgc(5y)N/A
ROCE(3y)6.53%
ROCE(5y)N/A
ROICexcg growth 3Y122.06%
ROICexcg growth 5Y20.87%
ROICexc growth 3Y78.16%
ROICexc growth 5Y7.03%
OM growth 3Y40.47%
OM growth 5Y-1.21%
PM growth 3YN/A
PM growth 5Y-11.42%
GM growth 3Y5.79%
GM growth 5Y8.33%
F-Score5
Asset Turnover1.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.02 | ||
| Debt/FCF | 17.61 | ||
| Debt/EBITDA | 4.99 | ||
| Cap/Depr | 101.98% | ||
| Cap/Sales | 2.61% | ||
| Interest Coverage | -22.67 | ||
| Cash Conversion | 67.95% | ||
| Profit Quality | 106.62% | ||
| Current Ratio | 1.21 | ||
| Quick Ratio | 1.08 | ||
| Altman-Z | 2.18 |
F-Score5
WACC6.92%
ROIC/WACC0.82
Cap/Depr(3y)88.23%
Cap/Depr(5y)81.81%
Cap/Sales(3y)2.41%
Cap/Sales(5y)2.77%
Profit Quality(3y)109.5%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)8.48%
EPS 3YN/A
EPS 5Y-7.1%
EPS Q2Q%29.03%
EPS Next Y27.46%
EPS Next 2Y22.52%
EPS Next 3Y20.39%
EPS Next 5Y15.91%
Revenue 1Y (TTM)8.19%
Revenue growth 3Y12.89%
Revenue growth 5Y1.41%
Sales Q2Q%5.72%
Revenue Next Year6.89%
Revenue Next 2Y6.13%
Revenue Next 3Y6.07%
Revenue Next 5Y6.45%
EBIT growth 1Y4.81%
EBIT growth 3Y58.57%
EBIT growth 5Y0.18%
EBIT Next Year62.05%
EBIT Next 3Y24.65%
EBIT Next 5Y17.11%
FCF growth 1Y157.47%
FCF growth 3Y6.26%
FCF growth 5Y-9.07%
OCF growth 1Y56.8%
OCF growth 3Y3.4%
OCF growth 5Y-5.89%