EMBRAER SA-SPON ADR (ERJ) Stock Fundamental Analysis
USA - NYSE:ERJ - US29082A1079 - ADR
57.73 USD
-0.95 (-1.62%)
57.73 USD
0 (0%)
ERJ gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 68 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
In the past year ERJ was profitable.
In the past year ERJ had a positive cash flow from operations.
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
With a Return On Assets value of 3.25%, ERJ perfoms like the industry average, outperforming 55.88% of the companies in the same industry.
With a decent Return On Equity value of 11.75%, ERJ is doing good in the industry, outperforming 77.94% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 6.92%, ERJ is in the better half of the industry, outperforming 61.76% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ERJ is significantly below the industry average of 8.27%.
The 3 year average ROIC (3.04%) for ERJ is below the current ROIC(6.92%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.25% | ||
| ROE | 11.75% | ||
| ROIC | 6.92% |
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 better Profit Margin (5.37%) than 60.29% of its industry peers.
ERJ's Operating Margin of 10.98% is fine compared to the rest of the industry. ERJ outperforms 70.59% of its industry peers.
ERJ's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 18.48%, ERJ is doing worse than 69.12% 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 | 10.98% | ||
| PM (TTM) | 5.37% | ||
| GM | 18.48% |
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.
The number of shares outstanding for ERJ remains at a similar level compared to 5 years ago.
The debt/assets ratio for ERJ has been reduced compared to a year ago.
2.2 Solvency
ERJ has an Altman-Z score of 1.71. This is a bad value and indicates that ERJ is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.71, ERJ is doing worse than 75.00% of the companies in the same industry.
ERJ has a debt to FCF ratio of 4.50. This is a neutral value as ERJ would need 4.50 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.50, ERJ is in the better half of the industry, outperforming 76.47% of the companies in the same industry.
A Debt/Equity ratio of 0.65 indicates that ERJ is somewhat dependend on debt financing.
ERJ has a worse Debt to Equity ratio (0.65) than 67.65% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 4.5 | ||
| Altman-Z | 1.71 |
ROIC/WACC0.55
WACC12.54%
2.3 Liquidity
ERJ has a Current Ratio of 1.33. This is a normal value and indicates that ERJ is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.33, ERJ is not doing good in the industry: 70.59% of the companies in the same industry are doing better.
ERJ has a Quick Ratio of 1.33. This is a bad value and indicates that ERJ is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.60, ERJ is not doing good in the industry: 86.76% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.33 | ||
| Quick Ratio | 0.6 |
3. Growth
3.1 Past
ERJ shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 80.67%, which is quite impressive.
Looking at the last year, ERJ shows a very strong growth in Revenue. The Revenue has grown by 40.55%.
The Revenue has been growing by 10.19% on average over the past years. This is quite good.
EPS 1Y (TTM)80.67%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-109.09%
Revenue 1Y (TTM)40.55%
Revenue growth 3Y16.04%
Revenue growth 5Y10.19%
Sales Q2Q%21.75%
3.2 Future
The Earnings Per Share is expected to grow by 19.02% on average over the next years. This is quite good.
Based on estimates for the next years, ERJ will show a very strong growth in Revenue. The Revenue will grow by 69.31% on average per year.
EPS Next Y-19.18%
EPS Next 2Y16.82%
EPS Next 3Y19.02%
EPS Next 5YN/A
Revenue Next Year23.64%
Revenue Next 2Y17.29%
Revenue Next 3Y14.45%
Revenue Next 5Y69.31%
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
Based on the Price/Earnings ratio of 180.41, the valuation of ERJ can be described as expensive.
ERJ's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.76. ERJ is valued rather expensively when compared to this.
With a Price/Forward Earnings ratio of 89.16, ERJ can be considered very expensive at the moment.
60.29% of the companies in the same industry are cheaper than ERJ, based on the Price/Forward Earnings ratio.
ERJ is valuated expensively when we compare the Price/Forward Earnings ratio to 23.21, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 180.41 | ||
| Fwd PE | 89.16 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERJ is valued cheaper than 98.53% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ERJ is valued cheaper than 95.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.04 | ||
| EV/EBITDA | 10.16 |
4.3 Compensation for Growth
ERJ's earnings are expected to grow with 19.02% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y16.82%
EPS Next 3Y19.02%
5. Dividend
5.1 Amount
With a yearly dividend of 0.21%, ERJ is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.21, 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 | 0.21% |
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
ERJ pays out 2.42% of its income as dividend. This is a sustainable payout ratio.
DP2.42%
EPS Next 2Y16.82%
EPS Next 3Y19.02%
57.73
-0.95 (-1.62%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners41.68%
Inst Owner Change0%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap10.60B
Analysts78.46
Price Target60.91 (5.51%)
Short Float %1.8%
Short Ratio1.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.21% |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP2.42%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-272.61%
Min EPS beat(2)-435.01%
Max EPS beat(2)-110.2%
EPS beat(4)1
Avg EPS beat(4)-143.24%
Min EPS beat(4)-435.01%
Max EPS beat(4)3.26%
EPS beat(8)2
Avg EPS beat(8)-84.2%
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)-5.43%
Min Revenue beat(2)-9.14%
Max Revenue beat(2)-1.72%
Revenue beat(4)1
Avg Revenue beat(4)-2.07%
Min Revenue beat(4)-9.14%
Max Revenue beat(4)3.89%
Revenue beat(8)2
Avg Revenue beat(8)-3.54%
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)9.38%
PT rev (3m)15.62%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-71.23%
EPS NY rev (1m)26.27%
EPS NY rev (3m)-59.9%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)15.44%
Revenue NY rev (1m)0.08%
Revenue NY rev (3m)3.68%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 180.41 | ||
| Fwd PE | 89.16 | ||
| P/S | 1.42 | ||
| P/FCF | 20.04 | ||
| P/OCF | 10.1 | ||
| P/B | 3.11 | ||
| P/tB | 14.25 | ||
| EV/EBITDA | 10.16 |
EPS(TTM)0.32
EY0.55%
EPS(NY)0.65
Fwd EY1.12%
FCF(TTM)2.88
FCFY4.99%
OCF(TTM)5.71
OCFY9.9%
SpS40.68
BVpS18.59
TBVpS4.05
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.25% | ||
| ROE | 11.75% | ||
| ROCE | 11.18% | ||
| ROIC | 6.92% | ||
| ROICexc | 8.39% | ||
| ROICexgc | 15.02% | ||
| OM | 10.98% | ||
| PM (TTM) | 5.37% | ||
| GM | 18.48% | ||
| FCFM | 7.08% |
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 Turnover0.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 4.5 | ||
| Debt/EBITDA | 2.05 | ||
| Cap/Depr | 192.1% | ||
| Cap/Sales | 6.97% | ||
| Interest Coverage | 4.75 | ||
| Cash Conversion | 96.2% | ||
| Profit Quality | 131.81% | ||
| Current Ratio | 1.33 | ||
| Quick Ratio | 0.6 | ||
| Altman-Z | 1.71 |
F-Score7
WACC12.54%
ROIC/WACC0.55
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)80.67%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-109.09%
EPS Next Y-19.18%
EPS Next 2Y16.82%
EPS Next 3Y19.02%
EPS Next 5YN/A
Revenue 1Y (TTM)40.55%
Revenue growth 3Y16.04%
Revenue growth 5Y10.19%
Sales Q2Q%21.75%
Revenue Next Year23.64%
Revenue Next 2Y17.29%
Revenue Next 3Y14.45%
Revenue Next 5Y69.31%
EBIT growth 1Y167.12%
EBIT growth 3Y46.63%
EBIT growth 5YN/A
EBIT Next Year63.72%
EBIT Next 3Y30.25%
EBIT Next 5Y85.13%
FCF growth 1Y2182.11%
FCF growth 3Y29.27%
FCF growth 5Y15.04%
OCF growth 1Y213.88%
OCF growth 3Y24.7%
OCF growth 5Y8.09%