EMBRAER SA-SPON ADR (ERJ) Stock Fundamental Analysis
USA - NYSE:ERJ - US29082A1079 - ADR
64.48 USD
-0.74 (-1.13%)
64.48 USD
0 (0%)
Taking everything into account, ERJ scores 4 out of 10 in our fundamental rating. ERJ was compared to 71 industry peers in the Aerospace & Defense industry. While ERJ is still in line with the averages on profitability rating, there are concerns on its financial health. 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.
In multiple years ERJ reported negative net income over the last 5 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 3.25%. This is comparable to the rest of the industry: ERJ outperforms 54.93% of its industry peers.
With a decent Return On Equity value of 11.75%, ERJ is doing good in the industry, outperforming 78.87% of the companies in the same industry.
ERJ has a better Return On Invested Capital (6.92%) than 60.56% of its industry peers.
ERJ had an Average Return On Invested Capital over the past 3 years of 3.04%. This is significantly below the industry average of 8.48%.
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
The Profit Margin of ERJ (5.37%) is comparable to the rest of the industry.
Looking at the Operating Margin, with a value of 10.98%, ERJ is in the better half of the industry, outperforming 71.83% of the companies in the same industry.
In the last couple of years the Operating Margin of ERJ has grown nicely.
ERJ has a Gross Margin of 18.48%. This is in the lower half of the industry: ERJ underperforms 69.01% of its industry peers.
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 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.
The debt/assets ratio for ERJ has been reduced compared to a year ago.
2.2 Solvency
ERJ has an Altman-Z score of 1.80. 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 1.80, ERJ is doing worse than 74.65% 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.
With a decent Debt to FCF ratio value of 4.50, ERJ is doing good in the industry, outperforming 74.65% of the companies in the same industry.
ERJ has a Debt/Equity ratio of 0.65. This is a neutral value indicating ERJ is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.65, ERJ is not doing good in the industry: 69.01% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 4.5 | ||
| Altman-Z | 1.8 |
ROIC/WACC0.54
WACC12.84%
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.
ERJ has a worse Current ratio (1.33) than 73.24% of its industry peers.
A Quick Ratio of 0.60 indicates that ERJ may have some problems paying its short term obligations.
ERJ's Quick ratio of 0.60 is on the low side compared to the rest of the industry. ERJ is outperformed by 87.32% of its industry peers.
| 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 251.40%, 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)251.4%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%439.99%
Revenue 1Y (TTM)35.67%
Revenue growth 3Y16.04%
Revenue growth 5Y10.19%
Sales Q2Q%539.25%
3.2 Future
The Earnings Per Share is expected to grow by 19.02% on average over the next years. This is quite good.
ERJ is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 67.32% yearly.
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 5Y67.32%
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
Based on the Price/Earnings ratio of 49.22, the valuation of ERJ can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of ERJ is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 25.83, ERJ is valued quite expensively.
Based on the Price/Forward Earnings ratio of 99.77, the valuation of ERJ can be described as expensive.
Based on the Price/Forward Earnings ratio, ERJ is valued a bit more expensive than the industry average as 64.79% of the companies are valued more cheaply.
When comparing the Price/Forward Earnings ratio of ERJ to the average of the S&P500 Index (32.68), we can say ERJ is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.22 | ||
| Fwd PE | 99.77 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERJ is valued cheaper than 95.77% of the companies in the same industry.
91.55% 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 | 22.43 | ||
| EV/EBITDA | 11.31 |
4.3 Compensation for Growth
A more expensive valuation may be justified as ERJ's earnings are expected to grow with 19.02% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y16.82%
EPS Next 3Y19.02%
5. Dividend
5.1 Amount
ERJ has a yearly dividend return of 0.19%, which is pretty low.
Compared to an average industry Dividend Yield of 1.12, ERJ pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.19, ERJ pays less dividend than the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.19% |
5.2 History
ERJ has paid a dividend for at least 10 years, which is 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%
64.48
-0.74 (-1.13%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners41.68%
Inst Owner Change-2.34%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap11.84B
Revenue(TTM)35.42B
Net Income(TTM)2.14B
Analysts78.46
Price Target66.24 (2.73%)
Short Float %1.94%
Short Ratio2.66
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.19% |
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)11.61%
PT rev (3m)25.23%
EPS NQ rev (1m)0%
EPS NQ rev (3m)5.54%
EPS NY rev (1m)0%
EPS NY rev (3m)-59.9%
Revenue NQ rev (1m)0.14%
Revenue NQ rev (3m)16.26%
Revenue NY rev (1m)0%
Revenue NY rev (3m)3.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.22 | ||
| Fwd PE | 99.77 | ||
| P/S | 1.59 | ||
| P/FCF | 22.43 | ||
| P/OCF | 11.31 | ||
| P/B | 3.48 | ||
| P/tB | 15.94 | ||
| EV/EBITDA | 11.31 |
EPS(TTM)1.31
EY2.03%
EPS(NY)0.65
Fwd EY1%
FCF(TTM)2.87
FCFY4.46%
OCF(TTM)5.7
OCFY8.84%
SpS40.6
BVpS18.55
TBVpS4.04
PEG (NY)N/A
PEG (5Y)N/A
Graham Number23.39
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
ROICexgc growth 3Y38.8%
ROICexgc 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 | 1.8 |
F-Score7
WACC12.84%
ROIC/WACC0.54
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)251.4%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%439.99%
EPS Next Y-19.18%
EPS Next 2Y16.82%
EPS Next 3Y19.02%
EPS Next 5YN/A
Revenue 1Y (TTM)35.67%
Revenue growth 3Y16.04%
Revenue growth 5Y10.19%
Sales Q2Q%539.25%
Revenue Next Year23.64%
Revenue Next 2Y17.29%
Revenue Next 3Y14.45%
Revenue Next 5Y67.32%
EBIT growth 1Y167.12%
EBIT growth 3Y46.63%
EBIT growth 5YN/A
EBIT Next Year63.72%
EBIT Next 3Y30.25%
EBIT Next 5Y84.28%
FCF growth 1Y2182.11%
FCF growth 3Y29.27%
FCF growth 5Y15.04%
OCF growth 1Y213.88%
OCF growth 3Y24.7%
OCF growth 5Y8.09%
EMBRAER SA-SPON ADR / ERJ FAQ
What is the fundamental rating for ERJ stock?
ChartMill assigns a fundamental rating of 4 / 10 to ERJ.
What is the valuation status of EMBRAER SA-SPON ADR (ERJ) stock?
ChartMill assigns a valuation rating of 3 / 10 to EMBRAER SA-SPON ADR (ERJ). This can be considered as Overvalued.
How profitable is EMBRAER SA-SPON ADR (ERJ) stock?
EMBRAER SA-SPON ADR (ERJ) has a profitability rating of 5 / 10.
What is the valuation of EMBRAER SA-SPON ADR based on its PE and PB ratios?
The Price/Earnings (PE) ratio for EMBRAER SA-SPON ADR (ERJ) is 49.22 and the Price/Book (PB) ratio is 3.48.
What is the earnings growth outlook for EMBRAER SA-SPON ADR?
The Earnings per Share (EPS) of EMBRAER SA-SPON ADR (ERJ) is expected to decline by -19.18% in the next year.