NasdaqGM:ADES

Stock Analysis Report

Advanced Emissions Solutions

Executive Summary

Advanced Emissions Solutions, Inc., together with its subsidiaries, provides emission reduction technologies and specialty chemicals in the United States.

Rewards

Trading at 96.3% below its fair value

Earnings are forecast to grow 43.19% per year

Risk Analysis

Has a high level of debt

Unstable dividend track record

Highly volatile share price over past 3 months

Profit margins (51.6%) are lower than last year



Snowflake Analysis

Very undervalued with high growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: ADES's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.2%

ADES

2.7%

US Chemicals

1.7%

US Market


1 Year Return

-0.4%

ADES

-0.9%

US Chemicals

23.2%

US Market

Return vs Industry: ADES underperformed the US Chemicals industry which returned 1.6% over the past year.

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


Shareholder returns

ADESIndustryMarket
7 Day1.2%2.7%1.7%
30 Day6.0%0.9%4.2%
90 Day-20.3%6.0%11.9%
1 Year8.5%-0.4%14.7%-0.9%25.8%23.2%
3 Year51.4%17.0%35.8%10.4%52.8%42.9%
5 Year-26.9%-43.5%49.5%17.6%75.2%55.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Advanced Emissions 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: ADES ($11.39) is trading below our estimate of fair value ($305.38)

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


Price To Earnings Ratio

PE vs Industry: ADES is good value based on its PE Ratio (6.3x) compared to the Chemicals industry average (20.8x).

PE vs Market: ADES is good value based on its PE Ratio (6.3x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: ADES is good value based on its PEG Ratio (0.1x)


Price to Book Ratio

PB vs Industry: ADES is good value based on its PB Ratio (1.9x) compared to the US Chemicals industry average (2.2x).


Next Steps

Future Growth

How is Advanced Emissions Solutions forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

43.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ADES's forecast earnings growth (43.2% per year) is above the savings rate (1.7%).

Earnings vs Market: ADES's earnings (43.2% per year) are forecast to grow faster than the US market (14.3% per year).

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

Revenue vs Market: ADES's revenue (23.5% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: ADES's revenue (23.5% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if ADES's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Advanced Emissions Solutions performed over the past 5 years?

36.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ADES has high quality earnings.

Growing Profit Margin: ADES's current net profit margins (51.6%) are lower than last year .


Past Earnings Growth Analysis

Earnings Trend: ADES has become profitable over the past 5 years, growing earnings by 36.1% per year.

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

Earnings vs Industry: ADES had negative earnings growth (-5.5%) over the past year, making it difficult to compare to the Chemicals industry average (-17%).


Return on Equity

High ROE: ADES's Return on Equity (31.2%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Advanced Emissions Solutions's financial position?


Financial Position Analysis

Short Term Liabilities: ADES's short term assets ($49.3M) exceed its short term liabilities ($39.1M).

Long Term Liabilities: ADES's short term assets ($49.3M) exceed its long term liabilities ($32.3M).


Debt to Equity History and Analysis

Debt Level: ADES's debt to equity ratio (40.3%) is considered high.

Reducing Debt: ADES had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: ADES's debt is well covered by operating cash flow (97.1%).

Interest Coverage: Insufficient data to determine if ADES's interest payments on its debt are well covered by EBIT.


Balance Sheet

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

Debt Coverage by Assets: ADES's debt is covered by short term assets (assets are 1.1x debt).


Next Steps

Dividend

What is Advanced Emissions Solutions's current dividend yield, its reliability and sustainability?

9.01%

Current Dividend Yield


Dividend Yield vs Market

company9.0%marketbottom25%1.4%markettop25%3.6%industryaverage2.1%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: ADES's dividend (8.78%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: ADES's dividend (8.78%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, ADES has been paying a dividend for less than 10 years.

Growing Dividend: ADES has only been paying a dividend for 3 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (55.3%), ADES's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

1.8yrs

Average management tenure


CEO

L. Sampson (48yo)

4.8yrs

Tenure

US$1,600,702

Compensation

Mr. L. Heath Sampson has been the Chief Executive Officer and President of Advanced Emissions Solutions, Inc. since April 1, 2015. Mr. Sampson served as Treasurer of Advanced Emissions Solutions, Inc. from ...


CEO Compensation Analysis

Compensation vs Market: L.'s total compensation ($USD1.60M) is above average for companies of similar size in the US market ($USD1.08M).

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


Management Age and Tenure

1.8yrs

Average Tenure

42yo

Average Age

Experienced Management: ADES's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

3.6yrs

Average Tenure

50yo

Average Age

Experienced Board: ADES's board of directors are considered experienced (3.6 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUS$1,311,15102 Jan 20
Alta Fundamental Advisers, LLC
EntityCompany
Shares126,387
Max PriceUS$10.39
BuyUS$2,793,37522 Nov 19
Alta Fundamental Advisers, LLC
EntityCompany
Shares266,843
Max PriceUS$10.84
BuyUS$139,05229 Oct 19
Alta Fundamental Advisers, LLC
EntityCompany
Shares10,800
Max PriceUS$12.88
BuyUS$620,04405 Sep 19
Alta Fundamental Advisers, LLC
EntityCompany
Shares50,200
Max PriceUS$12.47
BuyUS$312,20829 Aug 19
Alta Fundamental Advisers, LLC
EntityCompany
Shares25,000
Max PriceUS$12.49
BuyUS$320,18127 Aug 19
Alta Fundamental Advisers, LLC
EntityCompany
Shares25,747
Max PriceUS$12.44
BuyUS$345,31723 Aug 19
Alta Fundamental Advisers, LLC
EntityCompany
Shares28,200
Max PriceUS$12.64
BuyUS$670,46021 Aug 19
Alta Fundamental Advisers, LLC
EntityCompany
Shares56,243
Max PriceUS$12.04

Ownership Breakdown

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


Management Team

  • L. Sampson (48yo)

    CEO, President & Director

    • Tenure: 4.8yrs
    • Compensation: US$1.60m
  • Joe Wong

    Chief Technology Officer

    • Tenure: 0.8yrs
  • Greg Marken (37yo)

    CFO, Secretary & Treasurer

    • Tenure: 1.8yrs
    • Compensation: US$669.02k
  • Ted Sanders (42yo)

    General Counsel

    • Tenure: 2.9yrs
    • Compensation: US$494.20k
  • Lorraine Lang

    Vice President of Human Resources

    • Tenure: 0.8yrs

Board Members

  • J. Simonton (75yo)

    Independent Director

    • Tenure: 5.7yrs
    • Compensation: US$177.01k
  • Carol Eicher (60yo)

    Independent Director

    • Tenure: 0.8yrs
  • Brian Leen (50yo)

    Independent Director

    • Tenure: 0.9yrs
  • R. Pate (64yo)

    Independent Director

    • Tenure: 3.6yrs
    • Compensation: US$170.76k
  • L. Sampson (48yo)

    CEO, President & Director

    • Tenure: 4.8yrs
    • Compensation: US$1.60m
  • Louis Wells (49yo)

    Chairman of the Board

    • Tenure: 3.8yrs
    • Compensation: US$206.18k
  • Gilbert Li (41yo)

    Independent Director

    • Tenure: 3.6yrs
    • Compensation: US$250.01k

Company Information

Advanced Emissions Solutions, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Advanced Emissions Solutions, Inc.
  • Ticker: ADES
  • Exchange: NasdaqGM
  • Founded: 1996
  • Industry: Specialty Chemicals
  • Sector: Materials
  • Market Cap: US$201.129m
  • Shares outstanding: 18.12m
  • Website: https://www.advancedemissionssolutions.com

Number of Employees


Location

  • Advanced Emissions Solutions, Inc.
  • 640 Plaza Drive
  • Suite 270
  • Highlands Ranch
  • Colorado
  • 80129
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ADESNasdaqGM (Nasdaq Global Market)YesCommon StockUSUSDOct 2003
OXQ1DB (Deutsche Boerse AG)YesCommon StockDEEUROct 2003

Biography

Advanced Emissions Solutions, Inc., together with its subsidiaries, provides emission reduction technologies and specialty chemicals in the United States. It operates through two segments, Refined Coal; and Power Generation and Industrials. The company offers CyClean technology, a pre-combustion coal treatment process to enhance combustion, as well as to reduce emissions of nitrogen oxide and mercury from coals burned in cyclone boilers; and M-45 and M-45-PC technologies, which are pre-combustion coal treatment technologies used to control emissions from circulating fluidized bed boilers and pulverized coal boilers. It also provides powdered activated carbon, granular activated carbon, coal additives, and scrubber additives, as well as owns an associated lignite mine that supplies the raw material for the powdered activated carbon plant. The company serves customers in the coal-fired power generation and industrial boiler processes, as well as potable water and wastewater treatment markets. Advanced Emissions Solutions, Inc. was founded in 1996 and is headquartered in Highlands Ranch, Colorado. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/17 01:49
End of Day Share Price2020/01/16 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.