NTCO gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 36 industry peers in the Personal Care Products industry. Both the profitability and financial health of NTCO have multiple concerns. NTCO is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year NTCO has reported negative net income.
NTCO had a positive operating cash flow in the past year.

1.2 Ratios

Looking at the Return On Assets, with a value of -5.60%, NTCO is in line with its industry, outperforming 42.11% of the companies in the same industry.
With a Return On Equity value of -13.80%, NTCO perfoms like the industry average, outperforming 47.37% of the companies in the same industry.
NTCO has a Return On Invested Capital (3.82%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for NTCO is significantly below the industry average of 11.85%.
The last Return On Invested Capital (3.82%) for NTCO is above the 3 year average (3.19%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	-5.6%
ROE	-13.8%
ROIC	3.82%

ROA(3y)-1.52%

ROA(5y)-0.05%

ROE(3y)-3.84%

ROE(5y)2.88%

ROIC(3y)3.19%

ROIC(5y)6.2%

1.3 Margins

The Operating Margin of NTCO (5.42%) is comparable to the rest of the industry.
NTCO's Operating Margin has declined in the last couple of years.
NTCO has a better Gross Margin (64.70%) than 63.16% of its industry peers.
In the last couple of years the Gross Margin of NTCO has declined.

		Industry Rank	Sector Rank
OM	5.42%
PM (TTM)	N/A
GM	64.7%

OM growth 3Y-36.04%

OM growth 5Y-27.12%

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y-3.98%

GM growth 5Y-1.96%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so NTCO is destroying value.
NTCO has about the same amout of shares outstanding than it did 1 year ago.
NTCO has a worse debt/assets ratio than last year.

2.2 Solvency

NTCO has an Altman-Z score of 1.27. This is a bad value and indicates that NTCO is not financially healthy and even has some risk of bankruptcy.
NTCO has a worse Altman-Z score (1.27) than 60.53% of its industry peers.
NTCO has a Debt/Equity ratio of 0.71. This is a neutral value indicating NTCO is somewhat dependend on debt financing.
NTCO has a Debt to Equity ratio of 0.71. This is in the lower half of the industry: NTCO underperforms 60.53% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.71
Debt/FCF	N/A
Altman-Z	1.27

ROIC/WACC0.32

WACC11.97%

2.3 Liquidity

NTCO has a Current Ratio of 1.36. This is a normal value and indicates that NTCO is financially healthy and should not expect problems in meeting its short term obligations.
NTCO's Current ratio of 1.36 is on the low side compared to the rest of the industry. NTCO is outperformed by 60.53% of its industry peers.
NTCO has a Quick Ratio of 1.01. This is a normal value and indicates that NTCO is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.01, NTCO perfoms like the industry average, outperforming 47.37% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	1.36
Quick Ratio	1.01

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The earnings per share for NTCO have decreased strongly by -521.82% in the last year.
Looking at the last year, NTCO shows a decrease in Revenue. The Revenue has decreased by -9.60% in the last year.
NTCO shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 29.83% yearly.

EPS 1Y (TTM)-521.82%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%5.36%

Revenue 1Y (TTM)-9.6%

Revenue growth 3Y36.02%

Revenue growth 5Y29.83%

Sales Q2Q%-10.67%

3.2 Future

NTCO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 36.32% yearly.
NTCO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.96% yearly.

EPS Next Y69.18%

EPS Next 2Y51.75%

EPS Next 3Y36.32%

EPS Next 5YN/A

Revenue Next Year-9.61%

Revenue Next 2Y-6.29%

Revenue Next 3Y-2.82%

Revenue Next 5Y1.96%

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

NTCO reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
With a Price/Forward Earnings ratio of 26.06, NTCO can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, NTCO is valued a bit cheaper than the industry average as 60.53% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 25.83. NTCO is around the same levels.

		Industry Rank	Sector Rank
PE	N/A
Fwd PE	26.06

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, NTCO is valued cheaply inside the industry as 86.84% of the companies are valued more expensively.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	7.65

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as NTCO's earnings are expected to grow with 36.32% in the coming years.

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2Y51.75%

EPS Next 3Y36.32%

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5. Dividend

5.1 Amount

NTCO has a yearly dividend return of 0.83%, which is pretty low.
NTCO's Dividend Yield is a higher than the industry average which is at 1.90.
Compared to an average S&P500 Dividend Yield of 1.82, NTCO's dividend is way lower than the S&P500 average.

		Industry Rank	Sector Rank
Dividend Yield	0.83%

5.2 History

The dividend of NTCO has a limited annual growth rate of 0.67%.
NTCO does not have a reliable dividend history as it only pays dividend since a couple or years.

Dividend Growth(5Y)0.67%

Div Incr Years0

Div Non Decr Years0

5.3 Sustainability

The earnings of NTCO are negative and hence is the payout ratio. NTCO will probably not be able to sustain this dividend level.
The dividend of NTCO is growing, but earnings are growing more, so the dividend growth is sustainable.

DP-6.37%

EPS Next 2Y51.75%

EPS Next 3Y36.32%

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NATURA &CO HOLDING-ADR / NTCO FAQ

What is the fundamental rating for NTCO stock?

ChartMill assigns a fundamental rating of 3 / 10 to NTCO.

What is the valuation status of NATURA &CO HOLDING-ADR (NTCO) stock?

ChartMill assigns a valuation rating of 3 / 10 to NATURA &CO HOLDING-ADR (NTCO). This can be considered as Overvalued.

Can you provide the profitability details for NATURA &CO HOLDING-ADR?

NATURA &CO HOLDING-ADR (NTCO) has a profitability rating of 3 / 10.

How financially healthy is NATURA &CO HOLDING-ADR?

The financial health rating of NATURA &CO HOLDING-ADR (NTCO) is 2 / 10.

Can you provide the dividend sustainability for NTCO stock?

The dividend rating of NATURA &CO HOLDING-ADR (NTCO) is 2 / 10 and the dividend payout ratio is -6.37%.