Arko (NasdaqCM:ARKO) - Share price, News & Analysis

ARKO fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	2/6
Past Performance	5/6
Financial Health	2/6
Dividends	1/6

ARKO Stock Overview

Arko Corp. operates convenience stores in the United States.

Rewards

Trading at 18.9% below our estimate of its fair value

Earnings are forecast to grow 16.58% per year

Earnings grew by 1382.3% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Arko Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Arko
Historical stock prices
Current Share Price	US$8.49
52 Week High	US$10.98
52 Week Low	US$7.32
Beta	0.12
1 Month Change	-2.97%
3 Month Change	-7.21%
1 Year Change	-8.61%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-14.24%

Recent News & Updates

Jun 16

Arko Corp. (NASDAQ:ARKO) Shares Could Be 22% Below Their Intrinsic Value Estimate

In this article we are going to estimate the intrinsic value of Arko Corp. ( NASDAQ:ARKO ) by taking the expected...

Shareholder Returns

	ARKO	US Specialty Retail	US Market
7D	6.0%	6.2%	6.6%
1Y	-8.6%	-26.7%	-18.5%

Return vs Industry: ARKO exceeded the US Specialty Retail industry which returned -28.8% over the past year.

Return vs Market: ARKO exceeded the US Market which returned -20.5% over the past year.

Price Volatility

Is ARKO's price volatile compared to industry and market?
ARKO volatility
ARKO Average Weekly Movement	6.6%
Specialty Retail Industry Average Movement	8.7%
Market Average Movement	8.0%
10% most volatile stocks in US Market	16.6%
10% least volatile stocks in US Market	3.1%

Stable Share Price: ARKO is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: ARKO's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
n/a	11,236	Arie Kotler	https://www.arkocorp.com

Arko Corp. operates convenience stores in the United States. It operates through three segments: Retail, Wholesale, and GPM Petroleum. The Retail segment engages in the sale of fuel and merchandise to retail consumers.

Arko Fundamentals Summary

How do Arko's earnings and revenue compare to its market cap?
ARKO fundamental statistics
Market Cap	US$1.02b
Earnings (TTM)	US$70.42m
Revenue (TTM)	US$7.91b

14.7x

P/E Ratio

0.1x

P/S Ratio

Is ARKO overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ARKO income statement (TTM)
Revenue	US$7.91b
Cost of Revenue	US$6.87b
Gross Profit	US$1.04b
Other Expenses	US$969.44m
Earnings	US$70.42m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.58
Gross Margin	13.15%
Net Profit Margin	0.89%
Debt/Equity Ratio	209.7%

How did ARKO perform over the long term?

See historical performance and comparison

Dividends

0.9%

Current Dividend Yield

4%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is ARKO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ARKO?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for ARKO. This is calculated by dividing ARKO's market cap by their current preferred multiple.
What is ARKO's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$1.02b

ARKO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.4x
Enterprise Value/EBITDA	11.6x
PEG Ratio	0.9x

Price to Earnings Ratio vs Peers

How does ARKO's PE Ratio compare to its peers?

ARKO PE Ratio vs Peers

The above table shows the PE ratio for ARKO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	10.2x

Forward PE

Price-To-Earnings vs Peers: ARKO is expensive based on its Price-To-Earnings Ratio (14.7x) compared to the peer average (10.2x).

Price to Earnings Ratio vs Industry

How does ARKO's PE Ratio compare vs other companies in the U.S. Specialty Retail Industry?

Price-To-Earnings vs Industry: ARKO is expensive based on its Price-To-Earnings Ratio (14.7x) compared to the US Specialty Retail industry average (6.1x)

Price to Earnings Ratio vs Fair Ratio

What is ARKO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ARKO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	14.7x
Fair PE Ratio	12.3x

Price-To-Earnings vs Fair Ratio: ARKO is expensive based on its Price-To-Earnings Ratio (14.7x) compared to the estimated Fair Price-To-Earnings Ratio (12.3x).

Share Price vs Fair Value

What is the Fair Price of ARKO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ARKO ($8.49) is trading below our estimate of fair value ($10.47)

Significantly Below Fair Value: ARKO is trading below fair value, but not by a significant amount.

Price to Earnings Growth Ratio

PEG Ratio: ARKO is good value based on its PEG Ratio (0.9x)

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Future Growth

How is Arko forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

16.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARKO's forecast earnings growth (16.6% per year) is above the savings rate (1.9%).

Earnings vs Market: ARKO's earnings (16.6% per year) are forecast to grow faster than the US market (13.9% per year).

High Growth Earnings: ARKO's earnings are forecast to grow, but not significantly.

Revenue vs Market: ARKO's revenue (5.1% per year) is forecast to grow slower than the US market (8.3% per year).

High Growth Revenue: ARKO's revenue (5.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: ARKO's Return on Equity is forecast to be low in 3 years time (18.5%).

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Past Performance

How has Arko performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

46.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ARKO has high quality earnings.

Growing Profit Margin: ARKO's current net profit margins (0.9%) are higher than last year (0.1%).

Past Earnings Growth Analysis

Earnings Trend: ARKO has become profitable over the past 5 years, growing earnings by 46.1% per year.

Accelerating Growth: ARKO's earnings growth over the past year (1382.3%) exceeds its 5-year average (46.1% per year).

Earnings vs Industry: ARKO earnings growth over the past year (1382.3%) exceeded the Specialty Retail industry 40.8%.

Return on Equity

High ROE: Whilst ARKO's Return on Equity (22.36%) is high, this metric is skewed due to their high level of debt.

Discover strong past performing companies

Financial Health

How is Arko's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: ARKO's short term assets ($686.3M) exceed its short term liabilities ($428.7M).

Long Term Liabilities: ARKO's short term assets ($686.3M) do not cover its long term liabilities ($2.2B).

Debt to Equity History and Analysis

Debt Level: ARKO's net debt to equity ratio (121.9%) is considered high.

Reducing Debt: ARKO's debt to equity ratio has increased from 101.3% to 209.7% over the past 5 years.

Debt Coverage: ARKO's debt is well covered by operating cash flow (24.8%).

Interest Coverage: ARKO's interest payments on its debt are not well covered by EBIT (2.4x coverage).

Balance Sheet

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Dividend

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

Dividend Score

1/6

Dividend Score 1/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

0.94%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: ARKO's dividend (0.94%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.62%).

High Dividend: ARKO's dividend (0.94%) is low compared to the top 25% of dividend payers in the US market (4.34%).

Stability and Growth of Payments

Stable Dividend: Too early to tell whether ARKO's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if ARKO's dividend payments are increasing as they only just started paying a dividend.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (3.5%), ARKO's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: ARKO is paying a dividend but the company has no free cash flows.

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Management

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

1.5yrs

Average management tenure

CEO

Arie Kotler (47 yo)

1.5yrs

Tenure

US$6,375,923

Compensation

Mr. Arie Kotler has been the Chairman and Chief Executive Officer of Arko Corp. since December 22, 2020 and is its President since January 15, 2021. Mr. Kotler has been the Chairman, Chief Executive Office...

CEO Compensation Analysis

Compensation vs Market: Arie's total compensation ($USD6.38M) is above average for companies of similar size in the US market ($USD4.08M).

Compensation vs Earnings: Arie's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: ARKO's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.

Board Members

Experienced Board: ARKO's board of directors are not considered experienced ( 1.5 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.

Recent Insider Transactions

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/06/24 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31