NYSE:ARC

Stock Analysis Report

Executive Summary

ARC Document Solutions, Inc., a reprographics company, provides document solutions worldwide.

Rewards

Trading at 86.3% below its fair value

Became profitable this year

Risk Analysis

Interest payments are not well covered by earnings

Does not have a meaningful market cap ($61M)



Snowflake Analysis

Undervalued with acceptable track record.


Similar Companies

Share Price & News

How has ARC Document Solutions's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ARC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.5%

ARC

0.2%

US Commercial Services

-1.3%

US Market


1 Year Return

-45.5%

ARC

23.4%

US Commercial Services

22.0%

US Market

Return vs Industry: ARC underperformed the US Commercial Services industry which returned 23.7% over the past year.

Return vs Market: ARC underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

ARCIndustryMarket
7 Day1.5%0.2%-1.3%
30 Day-8.3%4.1%1.6%
90 Day-1.5%5.9%8.9%
1 Year-45.5%-45.5%28.0%23.4%24.7%22.0%
3 Year-72.3%-72.3%65.5%54.6%49.4%39.7%
5 Year-85.5%-85.5%113.4%91.7%78.1%58.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is ARC Document Solutions undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ARC ($1.33) is trading below our estimate of fair value ($9.73)

Significantly Below Fair Value: ARC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ARC is good value based on its PE Ratio (15.8x) compared to the Commercial Services industry average (26.4x).

PE vs Market: ARC is good value based on its PE Ratio (15.8x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate ARC's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: ARC is good value based on its PB Ratio (0.4x) compared to the US Commercial Services industry average (2.1x).


Next Steps

Future Growth

How is ARC Document Solutions forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

16.7%

Forecasted Commercial Services industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as ARC Document Solutions has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has ARC Document Solutions performed over the past 5 years?

-29.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ARC has high quality earnings.

Growing Profit Margin: ARC became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: ARC has become profitable over the past 5 years, growing earnings by -29.1% per year.

Accelerating Growth: ARC has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: ARC has become profitable in the last year, making it difficult to compare its past year earnings growth to the Commercial Services industry (-1.3%).


Return on Equity

High ROE: ARC's Return on Equity (2.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is ARC Document Solutions's financial position?


Financial Position Analysis

Short Term Liabilities: ARC's short term assets ($106.9M) exceed its short term liabilities ($88.9M).

Long Term Liabilities: ARC's short term assets ($106.9M) do not cover its long term liabilities ($125.9M).


Debt to Equity History and Analysis

Debt Level: ARC's debt to equity ratio (43.3%) is considered high.

Reducing Debt: ARC's debt to equity ratio has reduced from 184.5% to 43.3% over the past 5 years.

Debt Coverage: ARC's debt is well covered by operating cash flow (84.7%).

Interest Coverage: ARC's interest payments on its debt are not well covered by EBIT (2.8x coverage).


Balance Sheet

Inventory Level: ARC has a high level of physical assets or inventory.

Debt Coverage by Assets: ARC's debt is covered by short term assets (assets are 1.7x debt).


Next Steps

Dividend

What is ARC Document Solutions's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.5%forecastin3Yearsn/a

Current dividend yield vs market & industry

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

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


Stability and Growth of Payments

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

Growing Dividend: Insufficient data to determine if ARC'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 ARC's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of ARC Document Solutions's salary, the management and board of directors tenure and is there insider trading?

8.9yrs

Average management tenure


CEO

Suri Kumarakulasingam (66yo)

12.6yrs

Tenure

US$2,364,213

Compensation

Mr. Kumarakulasingam Suriyakumar, also known as Suri, has been Chief Executive Officer of American Reprographics Company, L.L.C. since June 1, 2007 and its President since 1991. Mr. Suriyakumar served as a ...


CEO Compensation Analysis

Compensation vs Market: Suri's total compensation ($USD2.36M) is above average for companies of similar size in the US market ($USD519.76K).

Compensation vs Earnings: Suri's compensation has been consistent with company performance over the past year.


Management Age and Tenure

8.9yrs

Average Tenure

58yo

Average Age

Experienced Management: ARC's management team is seasoned and experienced (8.9 years average tenure).


Board Age and Tenure

11.5yrs

Average Tenure

61yo

Average Age

Experienced Board: ARC's board of directors are seasoned and experienced ( 11.5 years average tenure).


Insider Trading

Insider Buying: ARC insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$55,22909 Dec 19
Mark Mealy
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares50,000
Max PriceUS$1.11

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Suri Kumarakulasingam (66yo)

    Chairman

    • Tenure: 12.6yrs
    • Compensation: US$2.36m
  • Rahul Roy (59yo)

    Chief Technology Officer

    • Tenure: 19.3yrs
    • Compensation: US$1.53m
  • Ken Gini

    Senior Vice President of Corporate Administration

    • David Stickney

      Vice President of Corporate Communications & Investor Relations

      • Ted Carlson

        Senior Vice President of Mergers & Acquisitions

        • Joe Abeyesinhe

          Senior Vice President of Purchasing

          • Tracey Luttrell

            Corporate Counsel & Corporate Secretary

            • Tenure: 1.4yrs
          • Dilo Wijesuriya (57yo)

            Chief Operating officer

            • Tenure: 8.9yrs
            • Compensation: US$1.31m
          • Jorge Avalos (43yo)

            Chief Financial Officer

            • Tenure: 4.9yrs
            • Compensation: US$871.96k
          • Ted Buscaglia

            Executive Vice President of Global Services


            Board Members

            • Tom Formolo (54yo)

              Independent Director

              • Tenure: 15.3yrs
              • Compensation: US$110.00k
            • Suri Kumarakulasingam (66yo)

              Chairman

              • Tenure: 12.6yrs
              • Compensation: US$2.36m
            • Mark Mealy (61yo)

              Independent Director

              • Tenure: 14.8yrs
              • Compensation: US$115.00k
            • John Freeland (65yo)

              Independent Director

              • Tenure: 3.7yrs
              • Compensation: US$110.00k
            • Dewitt McCluggage (64yo)

              Lead Independent Director

              • Tenure: 12.5yrs
              • Compensation: US$115.00k
            • Bradford Brooks (51yo)

              Independent Director

              • Tenure: 1.8yrs
              • Compensation: US$101.25k
            • Cheryl Cook (55yo)

              Independent Director

              • Tenure: 1.1yrs
              • Compensation: US$42.50k

            Company Information

            ARC Document Solutions, Inc.'s company bio, employee growth, exchange listings and data sources


            Key Information

            • Name: ARC Document Solutions, Inc.
            • Ticker: ARC
            • Exchange: NYSE
            • Founded:
            • Industry: Office Services and Supplies
            • Sector: Commercial Services
            • Market Cap: US$61.030m
            • Shares outstanding: 45.89m
            • Website: https://www.e-arc.com

            Number of Employees


            Location

            • ARC Document Solutions, Inc.
            • 12657 Alcosta Boulevard
            • Suite 200
            • San Ramon
            • California
            • 94583
            • United States

            Listings

            TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
            ARCNYSE (New York Stock Exchange)YesCommon StockUSUSDFeb 2005
            BK1DB (Deutsche Boerse AG)YesCommon StockDEEURFeb 2005

            Biography

            ARC Document Solutions, Inc., a reprographics company, provides document solutions worldwide. It offers managed print services, an onsite service that places, manages, and optimizes print and imaging equipment in customers' offices, job sites, and other facilities; construction document and information management services, which consists of professional services to manage and distribute documents and information primarily related to construction projects; and archive and information management services that combines software and professional services to facilitate the capture, management, access, and retrieval of documents and information that have been produced in the past. The company also resells printing, imaging, and related equipment primarily to architectural, engineering, and construction firms, as well as provides ancillary services, such as equipment service and maintenance; and offers specialized color printing comprising color printing, finishing and assembly of graphic materials for regional and national retailers, franchises, marketing departments, theme parks, and cultural institutions. In addition, it develops and offers Web-based document management applications, such as SKYSITE, Planwell, and Abacus that facilitates project collaboration, manage print networks, track equipment fleets, create and maintain project document archives, and other document and content management tasks. Further, the company operates 178 offsite service centers that provides its customers with project-related printing of construction documents. It serves senior management teams, information technology and procurement departments, project architects, engineers, general contractors, facilities managers, and others. The company was formerly known as American Reprographics Company and changed its name to ARC Document Solutions, Inc. in 2012. ARC Document Solutions, Inc. is headquartered in San Ramon, California. 


            Company Analysis and Financial Data Status

            All financial data provided by Standard & Poor's Capital IQ.
            DataLast Updated (UTC time)
            Company Analysis2020/01/26 00:33
            End of Day Share Price2020/01/24 00:00
            Earnings2019/09/30
            Annual Earnings2018/12/31


            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.