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American Railcar Industries Inc
ARII : NASDAQ : Services
$70.01 4.96 | 7.62%
Today's Range: 66.14 - 70.34
Avg. Daily Volume: 237,900
10/23/14 - 2:36 PM ET

Financial Analysis


AMERICAN RAILCAR INDS INC's gross profit margin for the second quarter of its fiscal year 2014 has decreased when compared to the same period a year ago. The company has grown sales and net income significantly, outpacing the average growth rates of competitors within its industry. AMERICAN RAILCAR INDS INC is extremely liquid. Currently, the Quick Ratio is 2.35 which clearly shows the ability to cover any short-term cash needs. The company managed to increase its liquidity from the same period a year ago, despite already having strong liquidity to begin with. This would indicate improved cash flow.

During the same period, stockholders' equity ("net worth") has increased by 17.88% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY14 Q2 FY13
Net Sales ($mil)237.51159.4
EBITDA ($mil)59.8446.73
EBIT ($mil)51.8539.87
Net Income ($mil)32.2223.62


Balance Sheet Q2 FY14 Q2 FY13
Cash & Equiv. ($mil)170.2993.59
Total Assets ($mil)977.88758.67
Total Debt ($mil)314.26198.08
Equity ($mil)469.83398.57


Profitability Q2 FY14 Q2 FY13
Gross Profit Margin28.0731.61
EBITDA Margin25.1929.31
Operating Margin21.8325.01
Sales Turnover0.830.96
Return on Assets10.0510.54
Return on Equity20.9220.07
Debt Q2 FY14 Q2 FY13
Current Ratio3.53.24
Debt/Capital0.40.33
Interest Expense1.841.34
Interest Coverage28.1329.73


Share Data Q2 FY14 Q2 FY13
Shares outstanding (mil)21.3521.35
Div / share0.40.25
EPS1.511.11
Book value / share22.018.67
Institutional Own % n/a n/a
Avg Daily Volume231194.0245376.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 18.90 for the Machinery industry and a discount compared to the S&P 500 average of 18.06. To use another comparison, its price-to-book ratio of 2.89 indicates a premium versus the S&P 500 average of 2.49 and a discount versus the industry average of 2.99. The current price-to-sales ratio is similar to the S&P 500 average, but it is above the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, AMERICAN RAILCAR INDS INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
ARII 13.82 Peers 18.90   ARII 8.09 Peers 14.00

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

ARII is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

ARII is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
ARII 12.81 Peers 16.46   ARII 1.08 Peers 1.18

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

ARII is trading at a discount to its peers.

 

Average. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

ARII trades at a valuation on par to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ARII 2.89 Peers 2.99   ARII 22.66 Peers 854.22

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

ARII is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, ARII is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ARII 1.66 Peers 1.47   ARII 11.67 Peers 3.17

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

ARII is trading at a premium to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

ARII has a sales growth rate that significantly exceeds its peers.

 

 

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