EMBRAER SA-SPON ADR (ERJ) Stock Fundamental Analysis
NYSE:ERJ - New York Stock Exchange, Inc. - US29082A1079 - ADR - Currency: USD
We assign a fundamental rating of 4 out of 10 to ERJ. ERJ was compared to 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 valued quite expensive, but it does show an excellent growth.
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.
Of the past 5 years ERJ 4 years had a positive operating cash flow.
1.2 Ratios
ERJ's Return On Assets of 3.29% is in line compared to the rest of the industry. ERJ outperforms 56.92% of its industry peers.
ERJ has a Return On Equity of 12.07%. This is in the better half of the industry: ERJ outperforms 76.92% of its industry peers.
With a Return On Invested Capital value of 5.88%, ERJ perfoms like the industry average, outperforming 53.85% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ERJ is significantly below the industry average of 8.44%.
The 3 year average ROIC (3.04%) for ERJ is below the current ROIC(5.88%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.29% | ||
| ROE | 12.07% | ||
| ROIC | 5.88% |
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 5.91%. This is in the better half of the industry: ERJ outperforms 61.54% of its industry peers.
With a decent Operating Margin value of 10.15%, ERJ is doing good in the industry, outperforming 67.69% of the companies in the same industry.
In the last couple of years the Operating Margin of ERJ has grown nicely.
With a Gross Margin value of 17.71%, ERJ is not doing good in the industry: 72.31% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of ERJ has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.15% | ||
| PM (TTM) | 5.91% | ||
| GM | 17.71% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ERJ is destroying value.
The number of shares outstanding for ERJ remains at a similar level compared to 1 year ago.
The number of shares outstanding for ERJ remains at a similar level compared to 5 years ago.
ERJ has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.66, we must say that ERJ is in the distress zone and has some risk of bankruptcy.
ERJ has a worse Altman-Z score (1.66) than 75.38% of its industry peers.
The Debt to FCF ratio of ERJ is 3.94, which is a good value as it means it would take ERJ, 3.94 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ERJ (3.94) is better than 83.08% of its industry peers.
ERJ has a Debt/Equity ratio of 0.64. This is a neutral value indicating ERJ is somewhat dependend on debt financing.
The Debt to Equity ratio of ERJ (0.64) is worse than 61.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 3.94 | ||
| Altman-Z | 1.66 |
ROIC/WACC0.46
WACC12.67%
2.3 Liquidity
ERJ has a Current Ratio of 1.32. This is a normal value and indicates that ERJ is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.32, ERJ is doing worse than 70.77% of the companies in the same industry.
A Quick Ratio of 0.59 indicates that ERJ may have some problems paying its short term obligations.
ERJ's Quick ratio of 0.59 is on the low side compared to the rest of the industry. ERJ is outperformed by 87.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.32 | ||
| Quick Ratio | 0.59 |
3. Growth
3.1 Past
ERJ shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 177.78%, which is quite impressive.
ERJ shows a strong growth in Revenue. In the last year, the Revenue has grown by 39.31%.
ERJ shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.19% yearly.
EPS 1Y (TTM)177.78%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-488.24%
Revenue 1Y (TTM)39.31%
Revenue growth 3Y16.04%
Revenue growth 5Y10.19%
Sales Q2Q%23.02%
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.
Based on estimates for the next years, ERJ will show a very strong growth in Revenue. The Revenue will grow by 69.16% on average per year.
EPS Next Y101.3%
EPS Next 2Y67.61%
EPS Next 3Y17.65%
EPS Next 5YN/A
Revenue Next Year19.25%
Revenue Next 2Y16.43%
Revenue Next 3Y13.76%
Revenue Next 5Y69.16%
3.3 Evolution
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
ERJ is valuated quite expensively with a Price/Earnings ratio of 152.55.
Based on the Price/Earnings ratio, ERJ is valued a bit more expensive than the industry average as 61.54% of the companies are valued more cheaply.
ERJ's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.45.
A Price/Forward Earnings ratio of 46.60 indicates a quite expensive valuation of ERJ.
ERJ's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, ERJ is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 152.55 | ||
| Fwd PE | 46.6 |
4.2 Price Multiples
96.92% of the companies in the same industry are more expensive than ERJ, based on the Enterprise Value to EBITDA ratio.
ERJ's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ERJ is cheaper than 98.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.27 | ||
| EV/EBITDA | 11.98 |
4.3 Compensation for Growth
ERJ's 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)1.51
PEG (5Y)N/A
EPS Next 2Y67.61%
EPS Next 3Y17.65%
5. Dividend
5.1 Amount
With a yearly dividend of 0.08%, ERJ is not a good candidate for dividend investing.
ERJ's Dividend Yield is a higher than the industry average which is at 1.27.
Compared to an average S&P500 Dividend Yield of 2.42, ERJ's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.08% |
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%
61.02
+1.65 (+2.78%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners44.8%
Inst Owner Change7.53%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap11.21B
Analysts77.14
Price Target52.68 (-13.67%)
Short Float %3.96%
Short Ratio5.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.08% |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-233.01%
Min EPS beat(2)-435.01%
Max EPS beat(2)-31.01%
EPS beat(4)1
Avg EPS beat(4)-121.29%
Min EPS beat(4)-435.01%
Max EPS beat(4)3.26%
EPS beat(8)2
Avg EPS beat(8)-75.7%
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)0
Avg Revenue beat(2)-5.22%
Min Revenue beat(2)-9.14%
Max Revenue beat(2)-1.3%
Revenue beat(4)1
Avg Revenue beat(4)-1.74%
Min Revenue beat(4)-9.14%
Max Revenue beat(4)3.89%
Revenue beat(8)2
Avg Revenue beat(8)-3.75%
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)12.68%
PT rev (3m)0.83%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-41.25%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.01%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 152.55 | ||
| Fwd PE | 46.6 | ||
| P/S | 1.63 | ||
| P/FCF | 19.27 | ||
| P/OCF | 10.25 | ||
| P/B | 3.32 | ||
| P/tB | 16.53 | ||
| EV/EBITDA | 11.98 |
EPS(TTM)0.4
EY0.66%
EPS(NY)1.31
Fwd EY2.15%
FCF(TTM)3.17
FCFY5.19%
OCF(TTM)5.95
OCFY9.76%
SpS37.47
BVpS18.36
TBVpS3.69
PEG (NY)1.51
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.29% | ||
| ROE | 12.07% | ||
| ROCE | 9.5% | ||
| ROIC | 5.88% | ||
| ROICexc | 7.31% | ||
| ROICexgc | 13.41% | ||
| OM | 10.15% | ||
| PM (TTM) | 5.91% | ||
| GM | 17.71% | ||
| FCFM | 8.45% |
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-Score7
Asset Turnover0.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 3.94 | ||
| Debt/EBITDA | 2.26 | ||
| Cap/Depr | 197.19% | ||
| Cap/Sales | 7.44% | ||
| Interest Coverage | 3.98 | ||
| Cash Conversion | 114.1% | ||
| Profit Quality | 142.94% | ||
| Current Ratio | 1.32 | ||
| Quick Ratio | 0.59 | ||
| Altman-Z | 1.66 |
F-Score7
WACC12.67%
ROIC/WACC0.46
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)177.78%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-488.24%
EPS Next Y101.3%
EPS Next 2Y67.61%
EPS Next 3Y17.65%
EPS Next 5YN/A
Revenue 1Y (TTM)39.31%
Revenue growth 3Y16.04%
Revenue growth 5Y10.19%
Sales Q2Q%23.02%
Revenue Next Year19.25%
Revenue Next 2Y16.43%
Revenue Next 3Y13.76%
Revenue Next 5Y69.16%
EBIT growth 1Y148.11%
EBIT growth 3Y46.63%
EBIT growth 5YN/A
EBIT Next Year50.78%
EBIT Next 3Y28.65%
EBIT Next 5Y79.84%
FCF growth 1Y2305.46%
FCF growth 3Y29.27%
FCF growth 5Y15.04%
OCF growth 1Y343.29%
OCF growth 3Y24.7%
OCF growth 5Y8.09%