We assign a fundamental rating of 4 out of 10 to CSAN. CSAN was compared to 122 industry peers in the Specialty Retail industry. While CSAN is still in line with the averages on profitability rating, there are concerns on its financial health. CSAN has a decent growth rate and is not valued too expensively.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

CSAN had negative earnings in the past year.
CSAN had a positive operating cash flow in the past year.
CSAN had positive earnings in 4 of the past 5 years.
Each year in the past 5 years CSAN had a positive operating cash flow.

1.2 Ratios

The Return On Assets of CSAN (-9.31%) is worse than 73.77% of its industry peers.
With a Return On Equity value of -163.24%, CSAN is not doing good in the industry: 75.41% of the companies in the same industry are doing better.
Looking at the Return On Invested Capital, with a value of 6.48%, CSAN is in the better half of the industry, outperforming 62.30% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CSAN is significantly below the industry average of 12.24%.
The last Return On Invested Capital (6.48%) for CSAN is above the 3 year average (4.36%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	-9.31%
ROE	-163.24%
ROIC	6.48%

ROA(3y)-1.67%

ROA(5y)0.73%

ROE(3y)-25.17%

ROE(5y)-5.22%

ROIC(3y)4.36%

ROIC(5y)4.21%

1.3 Margins

The Operating Margin of CSAN (20.98%) is better than 98.36% of its industry peers.
CSAN's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 31.48%, CSAN is doing worse than 62.30% of the companies in the same industry.
In the last couple of years the Gross Margin of CSAN has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	20.98%
PM (TTM)	N/A
GM	31.48%

OM growth 3Y3.25%

OM growth 5Y-3.69%

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y10.35%

GM growth 5Y1.27%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), CSAN is destroying value.
The number of shares outstanding for CSAN has been reduced compared to 1 year ago.
The number of shares outstanding for CSAN has been increased compared to 5 years ago.
The debt/assets ratio for CSAN is higher compared to a year ago.

2.2 Solvency

Based on the Altman-Z score of 0.79, we must say that CSAN is in the distress zone and has some risk of bankruptcy.
CSAN has a worse Altman-Z score (0.79) than 72.95% of its industry peers.
The Debt to FCF ratio of CSAN is 17.68, which is on the high side as it means it would take CSAN, 17.68 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 17.68, CSAN perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
CSAN has a Debt/Equity ratio of 8.61. This is a high value indicating a heavy dependency on external financing.
CSAN has a Debt to Equity ratio of 8.61. This is amonst the worse of the industry: CSAN underperforms 80.33% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	8.61
Debt/FCF	17.68
Altman-Z	0.79

ROIC/WACC0.9

WACC7.23%

2.3 Liquidity

A Current Ratio of 1.83 indicates that CSAN should not have too much problems paying its short term obligations.
The Current ratio of CSAN (1.83) is better than 78.69% of its industry peers.
CSAN has a Quick Ratio of 1.68. This is a normal value and indicates that CSAN is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of CSAN (1.68) is better than 86.07% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.83
Quick Ratio	1.68

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The earnings per share for CSAN have decreased strongly by -872.35% in the last year.
The Revenue has grown by 11.36% in the past year. This is quite good.
CSAN shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 26.51% yearly.

EPS 1Y (TTM)-872.35%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%-526.67%

Revenue 1Y (TTM)11.36%

Revenue growth 3Y20.84%

Revenue growth 5Y26.51%

Sales Q2Q%-8.43%

3.2 Future

Based on estimates for the next years, CSAN will show a very strong growth in Earnings Per Share. The EPS will grow by 33.37% on average per year.
The Revenue is expected to grow by 2.66% on average over the next years.

EPS Next Y72.43%

EPS Next 2Y49.1%

EPS Next 3Y33.37%

EPS Next 5YN/A

Revenue Next Year-3.72%

Revenue Next 2Y-1.72%

Revenue Next 3Y0.03%

Revenue Next 5Y2.66%

3.3 Evolution

The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

CSAN reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
With a Price/Forward Earnings ratio of 16.53, CSAN is valued correctly.
Based on the Price/Forward Earnings ratio, CSAN is valued a bit cheaper than the industry average as 72.95% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.83, CSAN is valued a bit cheaper.

		Industry Rank	Sector Rank
PE	N/A
Fwd PE	16.53

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, CSAN is valued cheaply inside the industry as 86.89% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CSAN indicates a rather cheap valuation: CSAN is cheaper than 94.26% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	6.45
EV/EBITDA	5.44

4.3 Compensation for Growth

CSAN's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
CSAN's earnings are expected to grow with 33.37% in the coming years. This may justify a more expensive valuation.

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2Y49.1%

EPS Next 3Y33.37%

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5. Dividend

5.1 Amount

CSAN has a Yearly Dividend Yield of 2.44%.
Compared to an average industry Dividend Yield of 2.15, CSAN pays a better dividend. On top of this CSAN pays more dividend than 83.61% of the companies listed in the same industry.
CSAN's Dividend Yield is a higher than the S&P500 average which is at 1.82.

		Industry Rank	Sector Rank
Dividend Yield	2.44%

5.2 History

On average, the dividend of CSAN grows each year by 25.09%, which is quite nice.
CSAN has been paying a dividend for over 5 years, so it has already some track record.

Dividend Growth(5Y)25.09%

Div Incr Years0

Div Non Decr Years0

5.3 Sustainability

CSAN has negative earnings and hence a negative payout ratio. The dividend may be in danger.
The dividend of CSAN is growing, but earnings are growing more, so the dividend growth is sustainable.

DP-25.08%

EPS Next 2Y49.1%

EPS Next 3Y33.37%

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COSAN SA -ADR / CSAN FAQ

What is the ChartMill fundamental rating of COSAN SA -ADR (CSAN) stock?

ChartMill assigns a fundamental rating of 4 / 10 to CSAN.

What is the valuation status for CSAN stock?

ChartMill assigns a valuation rating of 6 / 10 to COSAN SA -ADR (CSAN). This can be considered as Fairly Valued.

How profitable is COSAN SA -ADR (CSAN) stock?

COSAN SA -ADR (CSAN) has a profitability rating of 4 / 10.

What is the earnings growth outlook for COSAN SA -ADR?

The Earnings per Share (EPS) of COSAN SA -ADR (CSAN) is expected to grow by 72.43% in the next year.