Arcosa, Inc. (NYSE: ACA)

Sector: Industrials Industry: Engineering & Construction CIK: 0001739445
P/B 2.10
P/E 36.58
P/S 1.92
Market Cap 5.44 Bn
ROIC (Qtr) 6.17
Div Yield % 0.18
Rev 1y % (Qtr) 24.58
Total Debt (Qtr) 1.58 Bn
Debt/Equity (Qtr) 0.61

About

Arcosa, Inc. (ACA) is a prominent player in the infrastructure sector, providing a variety of products and solutions to construction, engineered structures, and transportation markets across North America. The company conducts its operations through three primary segments: Construction Products, Engineered Structures, and Transportation Products. In the Construction Products segment, Arcosa specializes in the production and sale of natural and recycled aggregates, specialty materials, and construction site support equipment. This segment's primary...

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Analysis

Pros

  • Healthy cash reserves of 220M provide 23.66x coverage of short-term debt 9.30M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 469.30M provides strong 18.70x coverage of stock compensation 25.10M, indicating sustainable incentive practices.
  • Robust free cash flow of 318.90M exceeds capital expenditure of 150.40M by 2.12x, indicating strong organic growth funding capability.
  • Tangible assets of 3.39B provide exceptional 47.50x coverage of deferred revenue 71.30M, showing strong service capability backing.
  • Operating cash flow of 469.30M provides strong 6.58x coverage of deferred revenue 71.30M, indicating service delivery capability.

Cons

  • Operating cash flow of 469.30M barely covers its investment activities of (1.32B), with a coverage ratio of -0.36, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 469.30M provides thin coverage of dividend payments of (9.90M) with a -47.40 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 220M provide limited coverage of acquisition spending of (1.19B), which is -0.18x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 315.80M show weak coverage of depreciation charges of 226.30M, with a 1.40 ratio indicating high capital intensity and potential reinvestment needs.
  • Operating cash flow of 469.30M barely covers operating expenses of (13.10M) with a -35.82 ratio, suggesting thin operational efficiency margins and limited flexibility.

Peer Comparison

Companies in the Engineering & Construction
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 PWR Quanta Services, Inc. 65.02 Bn 63.86 2.39 6.02 Bn
2 FER Ferrovial SE 48.37 Bn 14.34 5.08 -
3 FIX Comfort Systems Usa Inc 34.25 Bn 40.89 4.12 0.39 Bn
4 EME EMCOR Group, Inc. 28.27 Bn 25.01 1.74 0.42 Bn
5 MTZ Mastec Inc 17.18 Bn 51.88 1.25 2.77 Bn
6 APG APi Group Corp 16.45 Bn 105.48 2.15 3.05 Bn
7 J Jacobs Solutions Inc. 16.43 Bn 56.79 1.37 2.71 Bn
8 ACM Aecom 13.10 Bn 23.31 0.81 3.23 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 1.37 1.60
EV to Cash from Ops. 14.77 6.21
EV to Debt 4.38 12.02
EV to EBIT 21.94 16.63
EV to EBITDA 12.98 13.11
EV to Free Cash Flow [EV/FCF] 21.73 64.21
EV to Market Cap 1.27 1.27
EV to Revenue 2.45 1.63
Price to Book Value [P/B] 2.10 5.92
Price to Earnings [P/E] 36.58 28.08

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 15.01 2.56
Dividend Payout Ratio % 6.60 17.64
Dividend per Basic Share 0.15 0.24
FCF Dividend Payout Ratio % 2.30 8.25
Interest Coverage 2.65 80.17

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % 20.25 -167.27
Cash and Equivalents Growth (1y) % -70.93 637.93
Dividend Growth (1y) % -25.00 2.92
EBIAT Growth (1y) % 45.93 92.73
EBITDA Growth (1y) % 48.28 8.03
EBIT Growth (1y) % 58.85 85.41
EBT Growth (1y) % 25.88 42.19
EPS Growth (1y) % 14.77 43.98
FCF Growth (1y) % 150.31 -20.57
Gross Profit Growth (1y) % 24.12 32.55

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.56 1.14
Cash Payout Ratio 0.02 0.05
Cash Ratio 0.38 0.38
Current Ratio 2.02 1.54
Debt to Equity Ratio 0.61 0.89
Interest Cover Ratio 2.65 80.17
Times Interest Earned 2.65 80.17

Profitability

Metric Value Industry Percentile
EBITDA Margin % 19.10 0.40
EBIT Margin % 11.15 -2.30
EBT Margin % 6.94 -4.58
Gross Margin % 21.60 20.40
Net Profit Margin % 5.20 -5.95