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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Aramark (XNYS:ARMK) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ARMK
Name:
ARAMARK (XNYS:ARMK)
Sector:
- 577109.00K
Industry:
Restaurants
CEO:
Mr. John Zillmer
Total Employees:
248,300
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 328.79% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ARAMARK(ARMK) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RESTAURANTS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
35.44
One Month Price Target:
$35.77
Six Month Price Target :
$37.43
Likely Price in One Year's Time:
Ticker:
$39.42
Likely Trading Range Today Under (Normal Volatility)
$35.24
Price Upper limit ($) :
$35.67
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$32.85
This week:
$29.66
This month :
$23.88
Other Primary facts
Market Cap:
9.05B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
257.72M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
41.19%
-28.5%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$47.44
$41.96
$23.44
$28.92
Medium risk (<10%) entry points
Buy Call
Sell Call
$40.17
Buy Put:
Sell Put:
$39.00
$30.69
$31.88
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ARMK
Sharpe Ratio:
0.73%
Comparison:
ARMK, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -55.62% lower than the industry
& is -67.91% lower than the market/S&P 500 average
Average Returns/Yield of
ARMK
Daily returns:
0.03%
Weekly returns:
0.17%
Monthly returns:
0.70%
Yearly returns:
16.01%
Comparison of returns:
Average annual returns/yield (last 3 years) is -47.62% below industry average
Classification:
ARMK, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.93
Statistical test of Returns:
ARMK has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.57%
Weekly Volatility:
7.98%
Monthly Volatility:
15.96%
Yearly Volatility:
55.29%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.51%
Volatility in last five trading days has been -85.62% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.29%
Weekly VaR:
-16.31%
Monthly VaR:
-32.62%
How Much Can the price of
ARMK
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-28%
Worst case (decline):
>85%
This translates to price declining to:
$25.36
This translates to price declining to:
$5.32
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
ARMK is a 130.25% riskier investment compared to the market/S&P 500 & is 97.26% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 2.19% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ARMK
Beta in relation to market/S&P 500--1.67
Expected beta in 1 year's time:
1.127
Expected beta in 3 year's time:
1.594
Unlevered (debt free) Beta:
0.49
Beta in relation to Nasdaq (XNAS):
0.904
Beta in relation to all global stocks::
0.871
Beta Comparison & Analysis
Beta of competitors/peers::
1.474
Beta is 13.35% higher than peers
Average Industry Beta:
1.354
Beta is 23.39% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.062
Alpha is -272.72% below industry average alpha yield
Alpha is -395% below the market average
Analysis of Cost of Capital of
ARMK
Equity cost of capital:
0.146
Equity cost of capital is 17.46% above industry mean WACC
Unlevered (without debt) cost of capital:
4.28%
Before-tax cost of debt:
3.49%
After-tax cost of debt:
2.76%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.76%
WACC is 46.92% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$40.33
Revenue growth rate per share of (3Y):
3.28
Annual revenue growth rate is -233.44% below industry average
EPS:
$0.57
Expected Annual growth rate of EPS (3Y):
-58.51%
Expected future EPS growth rate is -1805.23% lower than the Restaurants industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: 4.80%
Equity growth rate per share is -149.61% lower than the industry
Debt per share
$33.34
EBITDA per share
$3.81
Valuation Analysis Today of
ARMK
P/E Ratio:
50.37
P/E Ratio of Competitors/Peers:
9.28
P/E ratio is 442.81% higher than main peers & is 112.86% higher than the industry
Stock price/value with industry average P/E ratio: $13.49
ARMK is 162.78% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $8.46
Present value of the expected future dividends only: $3.02
P/S (Price to Sales ratio):
0.88
Price to sales ratio is -73.06% below the industry mean
P/B (Price to book value ratio):
3.28
-
-
Net income growth rate (3Y):
-115.43%
Net income growth rate is -166.30% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 27.19%
Dividend yeild: 1.24%
Previous Dividend: $0.11
Previous adjusted dividend: $0.11
Previous Dividend: $0.44
-
-
Average dividend payment (long-term): $0.11
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 30/08/2022
Expected next dividend record date: 16/08/2022
Expected next dividend declaration date: 08/02/2022
Previous dividend payment date: 06/01/2022
Previous dividend record date: 18/05/2022
Previous dividend declaration date: 05/04/2022
Dividend History:
2022-05-17--$0.11
2021-11-29--$0.11
2021-05-25--$0.11
2022-02-15--$0.11
2021-08-24--$0.11
2021-02-16--$0.11
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
308.55%
Net debt to equity ratio:
300.72%
Debt to assets ratio:
71.25%
Net debt to assets ratio:
69.44%
Debt-to-asset ratio is -54.79% below industry average
Ability to repay debt:
Interest coverage ratio:
3.2
Interest coverage ratio is -81.89% less than industry average
Looking forward:
Debt growth rate:
-16.22%
Annual debt growth is -144% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.22%
Analysis of Key Statistics
Correlation of price movement with the market:
0.55
Statistical significance of correlation:
ARMK has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.517
Stock price is 6.45% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.517
Correlation of price movement with Nasdaq (^IXIC):
0.026
Covariance of price movement with the market:
0.054
Kurtosis
33.069
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
1.546
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
ARMK
Gross Profit Margin Ratio:
30%
Operating Profit Margin Ratio:
4.70%
Operating profit margin is -49.97% lower than the industry
Net Profit Margin Ratio:
30%
Effective Tax Rate:
22.01%
Effective tax rate is 26.75% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
3.73%
Return on equity (ROE) is 1063.98% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.86%
Return on assets (ROA) is -93.94% lower than the industry
Financial Leverage:
3.5x
Current Ratio:
1.23
Current ratio is 9.29% above industry average
Cash Conversion Cycle (days):
-29.7
Cash conversion cycle is -189.28% below industry average
The remaining useful life of property plant & equipment is: 15.2 years
Stock based compensation to net income ratio:
23.76%
In-depth Efficiency Analysis
Revenue generated per employee:
41.9K
Each employee generates -63% less revenue than industry average revenue per employee
EBITDA generated per employee:
4.0K
Each employee generates -84% less EBITDA than industry average revenue per employee
Profit generated per employee:
0.4K
Each employee generates -97% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 2.3K
Each employee generates -196% less free cash flow than industry average revenue per employee
Assets/Capital per employee
36.8K
Each employee generates -196% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
ARMK
LEVI STRAUSS & CO. (XNYS:LEVI)
Capri Holdings Limited (XNYS:CPRI)
DECKERS OUTDOOR CORPORATION (XNYS:DECK)
Allianz SE (XMIL:ALV)
DICK'S SPORTING GOODS, INC. (XNYS:DKS)
LITHIA MOTORS, INC. (XNYS:LAD)
SEEING MACHINES LIMITED (XLON:SEE)
QUANTUMSCAPE CORPORATION (XNYS:QS)
Berry Global Group, Inc. (XNYS:BERY)
Current Analyst Ratings
Strong buy�8%
Buy�25%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/1/22
Revenue:
10.39B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
9.37B
1.02B
-
-
368.38M
-
407.08M
674.01M
-
306.71M
542.60M
981.94M
488.80M
103.73M
131.26M
28.89M
103.73M
Statement of Cash Flow
Date:
Period:
135.52M
Differed Income Tax :
- 73.00K
Stock Based Compensation :
24.65M
Change in Working Capital :
- 698480.00K
Accounts Receivables:
- 148437.00K
Other Working Capital:
539.46M
Other Non-Cash Items:
35.00M
Net Cash Provided by Operating Activities:
- 503387.00K
Investments in PP&E:
- 73722.00K
Net Acquisitions:
- 57028.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
12/31/21
2022
Q1
415.47M
-
415.47M
-
393.27M
2.10B
2.91B
576.51M
5.51B
2.05B
-
1.01B
-
9.15B
-
12.06B
785.37M
197.44M
-
-
1.39B
2.37B
8.59B
- 3717121.00K
6.90B
-
9.27B
2.95M
339.82M
- 190265.0K
2.63B
December 31, 2021 at 12:00:00 AM
10.04B
2.78B
12.06B
-
8.79B
8.4B
-
- 46901.00K
- 177651.00K
- 19074.00K
11.71M
-
- 28209.00K
600.53M
564.96M
- 1043.00K
- 117124.00K
415.47M
532.59M
- 503387.00K
- 73722.00K
- 577109.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
ARMK
2023
2024
2025
2026
2027
$28.16
$31.33
$34.84
$38.75
$43.10