BOVESPA:RAIL3

Stock Analysis Report

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Executive Summary

Rumo S.A., through its subsidiaries, provides rail transportation services. More Details


Snowflake Analysis

Reasonable growth potential with imperfect balance sheet.

Share Price & News

How has Rumo's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RAIL3 is not significantly more volatile than the rest of BR stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: RAIL3's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

-1.7%

RAIL3

-3.9%

BR Transportation

-2.6%

BR Market


1 Year Return

-14.3%

RAIL3

-2.0%

BR Transportation

-2.2%

BR Market

Return vs Industry: RAIL3 underperformed the BR Transportation industry which returned -2.1% over the past year.

Return vs Market: RAIL3 underperformed the BR Market which returned -1.4% over the past year.


Shareholder returns

RAIL3IndustryMarket
7 Day-1.7%-3.9%-2.6%
30 Day8.6%3.1%0.6%
90 Day15.0%9.8%14.3%
1 Year-14.3%-14.3%-1.4%-2.0%0.4%-2.2%
3 Year49.1%49.1%113.5%109.2%47.3%31.4%
5 Yearn/a876.1%807.9%195.4%144.8%

Long-Term Price Volatility Vs. Market

How volatile is Rumo's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Rumo undervalued compared to its fair value and its price relative to the market?

66.79x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: RAIL3 (R$20.85) is trading above our estimate of fair value (R$14.39)

Significantly Below Fair Value: RAIL3 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: RAIL3 is poor value based on its PE Ratio (66.8x) compared to the BR Transportation industry average (56.4x).

PE vs Market: RAIL3 is poor value based on its PE Ratio (66.8x) compared to the BR market (17.3x).


Price to Earnings Growth Ratio

PEG Ratio: RAIL3 is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: RAIL3 is good value based on its PB Ratio (2.6x) compared to the BR Transportation industry average (3.1x).


Next Steps

Future Growth

How is Rumo forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

44.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RAIL3's forecast earnings growth (44.3% per year) is above the savings rate (9.9%).

Earnings vs Market: RAIL3's earnings (44.3% per year) are forecast to grow faster than the BR market (27.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: RAIL3's revenue (14.8% per year) is forecast to grow faster than the BR market (10.4% per year).

High Growth Revenue: RAIL3's revenue (14.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RAIL3's Return on Equity is forecast to be low in 3 years time (10.3%).


Next Steps

Past Performance

How has Rumo performed over the past 5 years?

73.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RAIL3 has a large one-off gain of R$435.3M impacting its September 30 2020 financial results.

Growing Profit Margin: RAIL3's current net profit margins (7.1%) are lower than last year (10.1%).


Past Earnings Growth Analysis

Earnings Trend: RAIL3 has become profitable over the past 5 years, growing earnings by 73.2% per year.

Accelerating Growth: RAIL3's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: RAIL3 had negative earnings growth (-30.3%) over the past year, making it difficult to compare to the Transportation industry average (-18.5%).


Return on Equity

High ROE: RAIL3's Return on Equity (3.3%) is considered low.


Next Steps

Financial Health

How is Rumo's financial position?


Financial Position Analysis

Short Term Liabilities: RAIL3's short term assets (R$11.6B) exceed its short term liabilities (R$4.4B).

Long Term Liabilities: RAIL3's short term assets (R$11.6B) do not cover its long term liabilities (R$26.9B).


Debt to Equity History and Analysis

Debt Level: RAIL3's debt to equity ratio (137.7%) is considered high.

Reducing Debt: RAIL3's debt to equity ratio has reduced from 225.2% to 137.7% over the past 5 years.

Debt Coverage: RAIL3's debt is not well covered by operating cash flow (15.2%).

Interest Coverage: RAIL3's interest payments on its debt are not well covered by EBIT (1.1x coverage).


Balance Sheet


Next Steps

Dividend

What is Rumo current dividend yield, its reliability and sustainability?

1.21%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate RAIL3's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate RAIL3's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if RAIL3's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if RAIL3's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of RAIL3's dividend in 3 years as they are not forecast to pay a notable one for the BR market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure


CEO

João Alberto de Abreu (50 yo)

1.75yrs

Tenure

Mr. João Alberto Fernandez De Abreu has been Chief Executive Officer of Rumo Malha Norte S.A. since 2019. He has been Chief Executive Officer of Rumo S.A. since April 1, 2019. He has been Chief Operating O...


Leadership Team

NamePositionTenureCompensationOwnership
João Alberto de Abreu
Chief Executive Officer1.75yrsno datano data
Ricardo Lewin
Chief Financial & Investor Relations Officer2.75yrsno datano data
Marcos da Costa
Chief Services & Technology Officer and VP of Services & Technologyno datano datano data
Eduardo Filho
Vice President of Human Resourcesno datano datano data
Rodrigo de Moura Campos
Financial & Investor Relations Officerno datano datano data
Sergio Nahuz
Chief Commercial Officer & VP of Agricultural Commodities8.5yrsno datano data
José Cezario de Barros Sobrinho
Chief Investor Relations Officer5.83yrsno datano data
Daniel Rockenbach
Chief Operational Officer of South Operationno datano datano data
Darlan De David
Chief Operational Officer of North Operationno datano datano data
Pedro Marcus Palma
Chief Commercial Officer0.42yrno datano data
Pedro Roberto Almeida
Personnel & Institutional Relations Officerno datano datano data
Roberta Ehlers
Investor Relations Analystno datano datano data

2.8yrs

Average Tenure

Experienced Management: RAIL3's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Abel Halpern
Director11yrsno datano data
Riccardo Arduini
Director23.75yrsno datano data
Julio Neto
Directorno datano datano data
Marcos Lutz
Directorno datano datano data
Rubens Ometto de Mello
Chairman of the Board of Directors0.17yrno datano data
Burkhard Cordes
Directorno datano datano data
Marcelo Martins
Directorno datano datano data
Marcelo Curti
President of Fiscal Council1yrno datano data
Marcos Jank
Independent Director1.75yrsno datano data
Giancarlo Arduini
Independent Directorno datano datano data
Maílson da Nobrega
Independent Directorno datano datano data
Luis Henrique De Beauclair Guimarães
Vice Chairman0.17yrno datano data

1.4yrs

Average Tenure

54yo

Average Age

Experienced Board: RAIL3's board of directors are not considered experienced ( 1.4 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 18.9%.


Top Shareholders

Company Information

Rumo S.A.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Rumo S.A.
  • Ticker: RAIL3
  • Exchange: BOVESPA
  • Founded: 1997
  • Industry: Railroads
  • Sector: Transportation
  • Market Cap: R$38.733b
  • Shares outstanding: 1.85b
  • Website: https://rumolog.com

Number of Employees


Location

  • Rumo S.A.
  • Emílio Bertolini Street, 100
  • Vila Oficinas
  • Curitiba
  • Paraná
  • 82920-030
  • Brazil

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RAIL3BOVESPA (Bolsa de Valores de Sao Paulo)YesNew Ordinary SharesBRBRLMar 2017
RUMO.FOTCPK (Pink Sheets LLC)YesNew Ordinary SharesUSUSDMar 2017

Biography

Rumo S.A., through its subsidiaries, provides rail transportation services. It operates through four segments: Northern Operations, South Operations, Central Operations, and Container Operations. The compa...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/01/22 21:56
End of Day Share Price2021/01/22 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.