ARKO Corp. (ARKO) stock analysis

P/E above its 5-year median

ARKO's P/E of 84.8 is above its own 5-year median of 25.3.

P/E above the industry

ARKO's P/E of 84.8 is above the Consumer staples median of 23.3.

EV/EBITDA below its 5-year median

ARKO's EV/EBITDA of 4.3 is below its 5-year median of 5.7.

P/B below the industry

ARKO's price-to-book of 1.15 is below the Consumer staples median of 2.93.

Trading below fair value

The share price of $4.24 is below our fair value estimate of $8.26.

Margin of safety over 20%

The price is 48.7% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -5.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -34.3% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -35.3% over the last twelve months, against a 5-year average of 10.7% a year.

Growing faster than the industry

Revenue grew 5.9% over the last twelve months; the Consumer staples median is 3.8%.

Guidance lowered

ARKO lowered its full year 2026 Adjusted EBITDA outlook on Aug 6, 2026.

Gross margin trend

This company does not report gross profit.

Return on equity under 15%

Return on equity was 3.5% over the last twelve months and averaged 16.3% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 6.6%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

ARKO's return on equity of 3.5% is below the Consumer staples median of 6.3%.

Earnings grew over 5 years

Net income grew 10.7% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 0.1% over the last twelve months, against a 5-year average of 0.5%.

Net margin below the industry

ARKO's net margin of 0.1% is below the Consumer staples median of 0.7%.

High debt

Debt is 151% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 391% five years ago to 151%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 21.7% of total debt.

Interest not well covered

Operating income covers interest expense 1.2 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.47 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.66; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

ARKO paid dividends worth 2.8% of the share price over the last twelve months.

Yield below Treasuries

The 2.8% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; ARKO yields 2.8%.

Dividend stability

Fewer than five years of dividend history.

Not covered by earnings

Dividends take 111% of net income, leaving little room.

Not covered by free cash flow

Dividends take 1803% of free cash flow.