American Railcar Industries Inc

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ARII : NASDAQ : Services
$45.56 -0.57 | -1.2%
Today's Range: 45.47 - 46.37
Avg. Daily Volume: 127200.0
01/23/17 - 2:39 PM ET

Financial Analysis


AMERICAN RAILCAR INDS INC's gross profit margin for the third quarter of its fiscal year 2016 has significantly decreased when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. AMERICAN RAILCAR INDS INC is extremely liquid. Currently, the Quick Ratio is 2.42 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 6.23% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)144.96172.67
EBITDA ($mil)29.1462.0
EBIT ($mil)16.0349.78
Net Income ($mil)7.6929.36


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)223.88146.0
Total Assets ($mil)1458.151430.74
Total Debt ($mil)577.42608.11
Equity ($mil)547.04514.95


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin24.6440.4
EBITDA Margin20.135.9
Operating Margin11.0628.83
Sales Turnover0.50.54
Return on Assets5.938.38
Return on Equity15.8123.3
Debt Q3 FY16 Q3 FY15
Current Ratio3.272.65
Debt/Capital0.510.54
Interest Expense5.635.65
Interest Coverage2.858.82


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)19.3920.01
Div / share0.40.4
EPS0.41.39
Book value / share28.2225.73
Institutional Own % n/a n/a
Avg Daily Volume125977.0121375.0

Valuation


BUY. AMERICAN RAILCAR INDS INC's P/E ratio indicates a significant discount compared to an average of 28.87 for the Machinery industry and a significant discount compared to the S&P 500 average of 25.41. To use another comparison, its price-to-book ratio of 1.61 indicates a discount versus the S&P 500 average of 2.83 and a significant discount versus the industry average of 4.42. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. 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 10.33 Peers 28.87   ARII 3.60 Peers 14.08

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 13.78 Peers 22.77   ARII NM Peers 3.86

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 significant discount to its peers.

 

Neutral. 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's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ARII 1.61 Peers 4.42   ARII -21.85 Peers -21.50

Discount. 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 significant discount to 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 1.20 Peers 1.91   ARII -5.97 Peers -4.95

Discount. 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 significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

ARII significantly trails its peers on the basis of sales growth

 

 

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