Arcelik (ACKAY) AI Stock Analysis

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Arcelik

(OTC:ACKAY)

57Neutral

Arcelik's stock score is driven by strong revenue growth but tempered by significant challenges such as declining profit margins, high leverage, and poor cash flow generation. Technically, the stock shows signs of being oversold, but any recovery is uncertain given the current market sentiment. The high P/E ratio suggests overvaluation, while the lack of dividend yield further impacts its attractiveness. These factors combined result in a moderate stock score.

Arcelik (ACKAY) vs. S&P 500 (SPY)

Market Cap

$2.40B

Dividend YieldN/A

Average Volume (3M)3.00

Price to Earnings (P/E)49.0

Beta (1Y)0.33

Revenue Growth17.72%

EPS Growth-85.01%

CountryUS

Employees51,443

SectorConsumer Cyclical

Sector Strength55

IndustryFurnishings, Fixtures & Appliances

Share Statistics

EPS (TTM)0.36

Shares Outstanding135,145,600

10 Day Avg. Volume10

30 Day Avg. Volume3

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.53

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Arcelik Business Overview & Revenue Model

Company DescriptionArcelik A.S. (ACKAY) is a leading global consumer durables and electronics manufacturer based in Turkey. The company operates in multiple sectors, including home appliances, consumer electronics, and small domestic appliances. Arcelik's core products include refrigerators, washing machines, dishwashers, televisions, and air conditioners, which are sold under well-known brand names such as Beko and Grundig. The company has a strong international presence, with operations in over 145 countries and manufacturing facilities in several countries, including Turkey, Romania, Russia, China, South Africa, and Thailand.

How the Company Makes MoneyArcelik makes money primarily through the sale of its diverse range of consumer electronics and home appliances. Its revenue streams are largely derived from the sale of major household appliances such as refrigerators, washing machines, and dishwashers. Additionally, Arcelik benefits from the sale of small domestic appliances and consumer electronics, including televisions and air conditioning units. The company leverages its extensive global distribution network and multiple brand strategy to drive sales across different markets. Significant partnerships with retailers and distributors enhance its market reach, while its investment in research and development ensures a steady pipeline of innovative products, contributing to sustained earnings. Arcelik's ability to adapt to local market needs and preferences also plays a crucial role in its revenue generation.

Arcelik Financial Statement Overview

Summary

Arcelik shows strong revenue growth but faces challenges with declining profit margins and high leverage. The balance sheet indicates increased reliance on debt, which could pose risks if not managed carefully. Cash flow issues persist, with negative free cash flow highlighting problems in cash generation. While growth is apparent, profitability and stability need improvement.

Income Statement

Positive

Arcelik shows significant revenue growth, increasing from 31.9 trillion in 2019 to 428.5 trillion in 2024. However, net profit margin has decreased over time, from 2.9% in 2019 to 0.4% in 2024. The gross profit margin remains relatively stable, indicating efficient cost management. EBIT and EBITDA margins are declining, which could affect future profitability.

Balance Sheet

Positive

The company's debt-to-equity ratio has increased from 1.55 in 2019 to 2.05 in 2024, suggesting higher leverage. While total assets have grown, stockholders' equity has not kept pace, indicating potential risks. The equity ratio has decreased, reflecting a higher reliance on debt financing.

Cash Flow

Neutral

Arcelik's free cash flow has been negative for several years, demonstrating challenges in generating surplus cash. The operating cash flow to net income ratio is volatile, indicating fluctuating operational efficiency. Despite some growth in operating cash flow, free cash flow remains a concern due to high capital expenditures.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
428.55B	257.10B	133.92B	68.18B	40.87B
	Gross Profit
118.10B	75.38B	39.49B	20.48B	13.81B
	EBIT
7.12B	10.16B	9.09B	7.02B	4.85B
	EBITDA
36.25B	24.95B	11.14B	7.55B	6.25B
	Net Income Common Stockholders
1.69B	7.67B	4.32B	3.06B	2.85B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
50.82B	49.25B	24.53B	16.01B	12.00B
	Total Assets
397.73B	258.14B	132.24B	85.08B	46.55B
	Total Debt
138.04B	101.91B	51.44B	32.58B	17.08B
	Net Debt
87.23B	53.12B	26.91B	16.56B	5.07B
	Total Liabilities
322.66B	198.57B	105.14B	64.02B	32.53B
	Stockholders Equity
67.17B	53.17B	24.95B	19.38B	13.82B
Cash Flow		Free Cash Flow
-9.41B	-22.43B	-811.47M	-3.14B	4.69B
	Operating Cash Flow
14.39B	-8.64B	5.10B	-627.45M	6.42B
	Investing Cash Flow
-14.72B	-14.41B	-4.62B	-4.38B	-1.32B
	Financing Cash Flow
1.06B	31.54B	4.07B	4.80B	-1.31B

Arcelik Technical Analysis

Technical Analysis Sentiment

Negative

Last Price17.77

Price Trends

50DMA

18.22

Negative

100DMA

19.10

Negative

200DMA

20.75

Negative

Market Momentum

MACD

-0.09

Positive

RSI

44.38

Neutral

STOCH

9.27

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACKAY, the sentiment is Negative. The current price of 17.77 is below the 20-day moving average (MA) of 18.56, below the 50-day MA of 18.22, and below the 200-day MA of 20.75, indicating a bearish trend. The MACD of -0.09 indicates Positive momentum. The RSI at 44.38 is Neutral, neither overbought nor oversold. The STOCH value of 9.27 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ACKAY.

Arcelik Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PATK	66 Neutral	$2.60B	18.88	12.73%	2.06%	7.14%	-4.01%
MHK	66 Neutral	$6.81B	13.39	6.82%	―	-2.68%	―
MBC	63 Neutral	$1.51B	11.56	10.12%	―	-0.95%	-30.42%
Sector *	59 Neutral	$11.74B	10.16	-1.06%	4.15%	1.27%	-16.61%
MLKN	58 Neutral	$1.14B	39.49	2.28%	4.47%	-2.68%	-56.16%
ACKAY	57 Neutral	$2.40B	49.00	2.38%	―	17.72%	-85.01%
WHR	47 Neutral	$4.72B	13.03	-12.77%	9.04%	-14.64%	-167.22%

* Consumer Cyclical Sector Average

Performance Comparison

ACKAY

Arcelik

17.77

-8.26

-31.73%

MLKN

MillerKnoll, Inc.

17.73

-7.63

-30.09%

MHK

Mohawk

108.95

-8.73

-7.42%

PATK

Patrick Industries

81.55

10.11

14.15%

WHR

Whirlpool

85.27

-18.75

-18.03%

MBC

MasterBrand Inc

12.21

-5.65

-31.63%

Arcelik Earnings Call Summary

Earnings Call Date: Jan 31, 2025 | % Change Since: -1.66% | Next Earnings Date: Apr 23, 2025

Earnings Call Sentiment Negative

The earnings call highlighted substantial international revenue growth and recovery signs in key European markets, driven by inorganic growth and cost management strategies. However, these positives were overshadowed by significant challenges, including declining gross margins, increased financial expenses, a recorded net loss, and rising leverage. Despite some market recoveries, the financial pressures and operational costs presented a challenging quarter.

Highlights

Revenue Growth

Achieved 13.8% revenue growth year-on-year, totaling TRY 105.4 billion in Q3, with significant contributions from inorganic growth in Europe and MENA.

International Revenue Surge

International revenues increased by 58.1% in euro terms year-on-year, largely driven by inorganic growth contributions.

European Market Recovery

Significant recovery in consumer demand in key Western European markets such as the U.K., Italy, Germany, Spain, Belgium, and Austria.

Cost Management

Implemented forward contracts for raw material costs, minimizing exposure to rising costs and anticipating stability in future pricing.

Lowlights

Gross Margin Decline

Gross profit margin decreased by 2.9 points year-on-year to 26.4%, impacted by unfavorable product mix and rising raw material costs.

Adjusted EBITDA Weakness

Adjusted EBITDA margin fell to 4.6% due to lower gross profitability and higher operating expenses.

Increased Financial Expenses

Net financial expenses grew by 57% year-over-year and 65% quarterly, primarily due to increased net interest expenses and higher hedging costs.

Net Loss

Recorded a net loss of TRY 5.6 billion in Q3, reflecting a negative 5.3% net margin.

Leverage Increase

Leverage ratio increased to 4.29x due to higher borrowings and weaker EBITDA performance.

Company Guidance

During the Q3 2024 earnings call for Arcelik, the company provided guidance indicating revised expectations for the full year. They anticipate a flat performance in local sales due to stagnant demand but foresee a 50% year-on-year increase in international revenues in euro terms, driven by inorganic growth. The adjusted EBITDA margin is projected to be between 5.8% and 6% for the full year. Additionally, Arcelik expects an improvement in the net working capital over sales ratio, updating the guidance to approximately 20%. The company also revised its CapEx guidance from EUR 350 million to EUR 400 million, factoring in costs related to maintenance, integration, and restructuring. With ongoing synergies and cost savings from recent acquisitions, Arcelik remains optimistic about achieving these targets, despite current leverage standing at 4.3%.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.