EMBRAER SA-SPON ADR (ERJ) Stock Fundamental Analysis
NYSE:ERJ - New York Stock Exchange, Inc. - US29082A1079 - ADR - Currency: USD
Overall ERJ gets a fundamental rating of 5 out of 10. We evaluated ERJ against 65 industry peers in the Aerospace & Defense industry. ERJ has a medium profitability rating, but doesn't score so well on its financial health evaluation. ERJ is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
ERJ had positive earnings in the past year.
ERJ had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: ERJ reported negative net income in multiple years.
ERJ had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
ERJ has a Return On Assets of 2.62%. This is comparable to the rest of the industry: ERJ outperforms 49.23% of its industry peers.
ERJ has a better Return On Equity (10.08%) than 67.69% of its industry peers.
ERJ has a Return On Invested Capital (4.77%) which is in line with its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ERJ is below the industry average of 7.89%.
The 3 year average ROIC (3.04%) for ERJ is below the current ROIC(4.77%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.62% | ||
| ROE | 10.08% | ||
| ROIC | 4.77% |
ROA(3y)0.77%
ROA(5y)-0.96%
ROE(3y)2.92%
ROE(5y)-3.58%
ROIC(3y)3.04%
ROIC(5y)N/A
1.3 Margins
ERJ has a Profit Margin of 5.42%. This is comparable to the rest of the industry: ERJ outperforms 56.92% of its industry peers.
ERJ has a Operating Margin of 9.98%. This is in the better half of the industry: ERJ outperforms 64.62% of its industry peers.
In the last couple of years the Operating Margin of ERJ has grown nicely.
Looking at the Gross Margin, with a value of 17.93%, ERJ is doing worse than 72.31% of the companies in the same industry.
In the last couple of years the Gross Margin of ERJ has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.98% | ||
| PM (TTM) | 5.42% | ||
| GM | 17.93% |
OM growth 3Y26.36%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y5.14%
GM growth 5Y4.37%
2. Health
2.1 Basic Checks
ERJ has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
ERJ has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, ERJ has about the same amount of shares outstanding.
Compared to 1 year ago, ERJ has an improved debt to assets ratio.
2.2 Solvency
ERJ has an Altman-Z score of 1.38. This is a bad value and indicates that ERJ is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of ERJ (1.38) is worse than 78.46% of its industry peers.
ERJ has a debt to FCF ratio of 5.34. This is a neutral value as ERJ would need 5.34 years to pay back of all of its debts.
ERJ has a better Debt to FCF ratio (5.34) than 75.38% of its industry peers.
ERJ has a Debt/Equity ratio of 0.80. This is a neutral value indicating ERJ is somewhat dependend on debt financing.
ERJ has a Debt to Equity ratio of 0.80. This is in the lower half of the industry: ERJ underperforms 67.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 5.34 | ||
| Altman-Z | 1.38 |
ROIC/WACC0.28
WACC17.21%
2.3 Liquidity
A Current Ratio of 1.47 indicates that ERJ should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.47, ERJ is doing worse than 69.23% of the companies in the same industry.
ERJ has a Quick Ratio of 1.47. This is a bad value and indicates that ERJ is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.81, ERJ is doing worse than 78.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.47 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
ERJ shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 566.25%, which is quite impressive.
ERJ shows a strong growth in Revenue. In the last year, the Revenue has grown by 35.67%.
Measured over the past years, ERJ shows a quite strong growth in Revenue. The Revenue has been growing by 10.19% on average per year.
EPS 1Y (TTM)566.25%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%128.57%
Revenue 1Y (TTM)35.67%
Revenue growth 3Y16.04%
Revenue growth 5Y10.19%
Sales Q2Q%17.03%
3.2 Future
ERJ is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.65% yearly.
The Revenue is expected to grow by 69.16% on average over the next years. This is a very strong growth
EPS Next Y101.3%
EPS Next 2Y67.61%
EPS Next 3Y17.65%
EPS Next 5YN/A
Revenue Next Year17.91%
Revenue Next 2Y15.45%
Revenue Next 3Y13.24%
Revenue Next 5Y69.16%
3.3 Evolution
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
With a Price/Earnings ratio of 103.82, ERJ can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as ERJ.
The average S&P500 Price/Earnings ratio is at 28.22. ERJ is valued rather expensively when compared to this.
The Price/Forward Earnings ratio is 51.45, which means the current valuation is very expensive for ERJ.
ERJ's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of ERJ to the average of the S&P500 Index (20.86), we can say ERJ is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 103.82 | ||
| Fwd PE | 51.45 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERJ is valued cheaply inside the industry as 93.85% of the companies are valued more expensively.
96.92% of the companies in the same industry are more expensive than ERJ, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.96 | ||
| EV/EBITDA | 9.39 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as ERJ's earnings are expected to grow with 17.65% in the coming years.
PEG (NY)1.02
PEG (5Y)N/A
EPS Next 2Y67.61%
EPS Next 3Y17.65%
5. Dividend
5.1 Amount
With a yearly dividend of 0.11%, ERJ is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.34, ERJ pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.44, ERJ's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.11% |
5.2 History
ERJ has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DP0%
EPS Next 2Y67.61%
EPS Next 3Y17.65%
46.72
+0.93 (+2.03%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners47.87%
Inst Owner Change-0.75%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap8.58B
Analysts77.14
Price Target43.56 (-6.76%)
Short Float %3.86%
Short Ratio3.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.11% |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-13.87%
Min EPS beat(2)-31.01%
Max EPS beat(2)3.26%
EPS beat(4)2
Avg EPS beat(4)5.95%
Min EPS beat(4)-31.01%
Max EPS beat(4)73.93%
EPS beat(8)2
Avg EPS beat(8)-23.39%
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)1.29%
Min Revenue beat(2)-1.3%
Max Revenue beat(2)3.89%
Revenue beat(4)2
Avg Revenue beat(4)0.79%
Min Revenue beat(4)-1.3%
Max Revenue beat(4)3.89%
Revenue beat(8)2
Avg Revenue beat(8)-5.5%
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-7.65%
PT rev (3m)16.23%
EPS NQ rev (1m)0%
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)140.13%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0.86%
Revenue NY rev (3m)1.38%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 103.82 | ||
| Fwd PE | 51.45 | ||
| P/S | 1.36 | ||
| P/FCF | 15.96 | ||
| P/OCF | 8.71 | ||
| P/B | 2.53 | ||
| P/tB | 13.58 | ||
| EV/EBITDA | 9.39 |
EPS(TTM)0.45
EY0.96%
EPS(NY)0.91
Fwd EY1.94%
FCF(TTM)2.93
FCFY6.27%
OCF(TTM)5.37
OCFY11.49%
SpS34.36
BVpS18.47
TBVpS3.44
PEG (NY)1.02
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.62% | ||
| ROE | 10.08% | ||
| ROCE | 7.71% | ||
| ROIC | 4.77% | ||
| ROICexc | 6.79% | ||
| ROICexgc | 13.08% | ||
| OM | 9.98% | ||
| PM (TTM) | 5.42% | ||
| GM | 17.93% | ||
| FCFM | 8.52% |
ROA(3y)0.77%
ROA(5y)-0.96%
ROE(3y)2.92%
ROE(5y)-3.58%
ROIC(3y)3.04%
ROIC(5y)N/A
ROICexc(3y)4.39%
ROICexc(5y)N/A
ROICexgc(3y)8.44%
ROICexgc(5y)N/A
ROCE(3y)4.92%
ROCE(5y)N/A
ROICexcg growth 3Y38.8%
ROICexcg growth 5YN/A
ROICexc growth 3Y37.44%
ROICexc growth 5YN/A
OM growth 3Y26.36%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y5.14%
GM growth 5Y4.37%
F-Score6
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 5.34 | ||
| Debt/EBITDA | 3.14 | ||
| Cap/Depr | 188.75% | ||
| Cap/Sales | 7.1% | ||
| Interest Coverage | 3.8 | ||
| Cash Conversion | 113.65% | ||
| Profit Quality | 157.31% | ||
| Current Ratio | 1.47 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 1.38 |
F-Score6
WACC17.21%
ROIC/WACC0.28
Cap/Depr(3y)162.83%
Cap/Depr(5y)138.44%
Cap/Sales(3y)6.98%
Cap/Sales(5y)6.64%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)566.25%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%128.57%
EPS Next Y101.3%
EPS Next 2Y67.61%
EPS Next 3Y17.65%
EPS Next 5YN/A
Revenue 1Y (TTM)35.67%
Revenue growth 3Y16.04%
Revenue growth 5Y10.19%
Sales Q2Q%17.03%
Revenue Next Year17.91%
Revenue Next 2Y15.45%
Revenue Next 3Y13.24%
Revenue Next 5Y69.16%
EBIT growth 1Y178.29%
EBIT growth 3Y46.63%
EBIT growth 5YN/A
EBIT Next Year52.38%
EBIT Next 3Y31.81%
EBIT Next 5Y79.84%
FCF growth 1Y340.97%
FCF growth 3Y29.27%
FCF growth 5Y15.04%
OCF growth 1Y95.69%
OCF growth 3Y24.7%
OCF growth 5Y8.09%