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Arcelik (ACKAY)
OTHER OTC:ACKAY
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Arcelik
(OTC:ACKAY)
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Rating:49Neutral
Price Target:
$12.50
▼(-3.47% Downside)
Arcelik's overall stock score is primarily impacted by its weak financial performance, characterized by declining revenues, high leverage, and poor cash flow. Technical analysis suggests a neutral to bearish trend, while the high P/E ratio indicates potential overvaluation. The absence of earnings call data and corporate events limits additional insights.
Positive Factors
International Market Presence
Arcelik's strong international presence across Europe, Asia, and Africa provides a diversified revenue stream, reducing dependency on any single market and enhancing resilience against regional economic fluctuations.
Innovative Product Offerings
Arcelik's focus on innovation in household appliances and consumer electronics strengthens its competitive position, attracting customers and potentially driving long-term revenue growth.
Strategic Partnerships
Strategic partnerships and collaborations help Arcelik enhance its product offerings and expand its market reach, fostering long-term growth and competitive advantage.
Negative Factors
High Leverage
High leverage, indicated by a debt-to-equity ratio of 3.31, poses financial risks, potentially limiting Arcelik's ability to invest in growth opportunities and affecting its financial stability.
Declining Revenue
A significant revenue decline of 22.1% highlights challenges in maintaining sales momentum, which could impact long-term profitability and market position if not addressed.
Weak Cash Flow Generation
Negative free cash flow growth of -51.64% indicates cash management issues, which can constrain Arcelik's ability to finance operations and invest in future growth, impacting long-term sustainability.
Arcelik (ACKAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.77B
Dividend YieldN/A
Average Volume (3M)10.00
Price to Earnings (P/E)42.9
Beta (1Y)0.36
Revenue Growth2.58%
EPS Growth30.99%
CountryUS
Employees53,401
SectorConsumer Cyclical
Sector Strength84
IndustryFurnishings, Fixtures & Appliances
Share Statistics
EPS (TTM)N/A
Shares Outstanding135,145,600
10 Day Avg. Volume0
30 Day Avg. Volume10
Financial Highlights & Ratios
PEG Ratio-0.68
Price to Book (P/B)1.33
Price to Sales (P/S)0.21
P/FCF Ratio-9.53
Enterprise Value/Market Cap126.99
Enterprise Value/Revenue0.46
Enterprise Value/Gross Profit1.64
Enterprise Value/Ebitda4.14
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Arcelik Business Overview & Revenue Model
Company DescriptionArçelik Anonim Sirketi, together with its subsidiaries, produces, markets, sells, services, imports, and exports consumer durable goods and electronics in Turkey and internationally. It operates through White Goods, Consumer Electronics, and Other segments. It offers top and front door washing machines, horizontal and vertical deep freezers, split air conditioners, microwave ovens, water dispensers, cooking appliances, washing machines, dishwashers, coolers, gas and/or electric cookers, refrigerators, coffee machines, laundry and washer-dryers, hoods, and built-in cooking products. The company also provides televisions, computers, cash registers, and other electronic devices. It offers its products under the Arçelik, Beko, Grundig, Defy, Arctic, Dawlance, Elektrabregenz, Blomberg, VoltasBeko, Leisure, Altus, and Flavel brand names. The company was incorporated in 1955 and is headquartered in Istanbul, Turkey.
How the Company Makes MoneyArcelik generates revenue primarily through the sale of its wide range of household appliances and consumer electronics. The company has a diverse revenue model that includes direct sales through retail channels, e-commerce platforms, and partnerships with wholesalers and distributors. Key revenue streams include major appliances, which account for a significant portion of sales, as well as small appliances and consumer electronics. Arcelik also benefits from international markets, with a substantial presence in Europe, Asia, and Africa, which diversifies its revenue base. Additionally, the company engages in strategic partnerships and collaborations with other firms and technology providers to enhance product offerings and expand market reach, contributing to its overall profitability.
Arcelik Earnings Call Summary
Earnings Call Date:Oct 25, 2024
(Q3-2024)
| % Change Since: |
Next Earnings Date:Apr 24, 2026
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.Q3-2024 Updates
Positive Updates
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.
Negative Updates
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%.Arcelik Financial Statement Overview
Summary
Arcelik faces significant financial challenges with declining revenues and profitability, high leverage, and weak cash flow generation. While operational margins are reasonable, the overall financial health is strained by high debt and poor cash flow performance, posing risks to future stability and growth.Income Statement
Arcelik's income statement shows a concerning trend with a significant revenue decline of 22.1% in the TTM period. Gross profit margin remains stable at around 28%, but the net profit margin is extremely low at 0.14%, indicating profitability challenges. EBIT and EBITDA margins are modest, reflecting operational efficiency but not translating into strong net profits.45
Neutral
Balance Sheet
The balance sheet reveals high leverage with a debt-to-equity ratio of 3.31 in the TTM period, suggesting potential financial risk. Return on equity is low at 0.96%, indicating limited returns for shareholders. The equity ratio is not provided, but the high debt levels could impact financial stability.50
Neutral
Cash Flow
Cash flow analysis shows negative free cash flow growth of -51.64% in the TTM period, highlighting cash management issues. The operating cash flow to net income ratio is low at 0.04, and the free cash flow to net income ratio is negative, indicating insufficient cash generation relative to net income.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 484.74B | 428.55B | 257.10B | 133.92B | 68.18B | 40.87B |
| Gross Profit | 137.02B | 118.10B | 75.38B | 39.49B | 20.48B | 13.81B |
| EBITDA | 54.43B | 36.25B | 24.33B | 11.65B | 7.55B | 6.25B |
| Net Income | 619.99M | 1.69B | 7.67B | 4.32B | 3.06B | 2.85B |
Balance Sheet | ||||||
| Total Assets | 519.16B | 397.73B | 258.14B | 132.24B | 85.08B | 46.55B |
| Cash, Cash Equivalents and Short-Term Investments | 71.58B | 50.82B | 48.79B | 24.53B | 16.01B | 12.00B |
| Total Debt | 225.99B | 138.04B | 101.91B | 51.44B | 32.58B | 17.08B |
| Total Liabilities | 444.94B | 322.66B | 198.57B | 105.14B | 64.02B | 32.53B |
| Stockholders Equity | 68.25B | 67.17B | 53.17B | 24.95B | 19.38B | 13.82B |
Cash Flow | ||||||
| Free Cash Flow | -1.85B | -9.41B | -22.43B | -811.47M | -3.14B | 4.69B |
| Operating Cash Flow | 18.72B | 14.39B | -8.64B | 5.10B | -627.45M | 6.42B |
| Investing Cash Flow | -22.74B | -14.72B | -14.41B | -4.62B | -4.38B | -1.32B |
| Financing Cash Flow | 28.97B | 1.06B | 31.54B | 4.07B | 4.80B | -1.31B |
Arcelik Technical Analysis
Positive
12.95
Price Trends
12.62
Positive
13.35
Negative
14.44
Negative
Market Momentum
0.14
Negative
56.73
Neutral
80.60
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACKAY, the sentiment is Positive. The current price of 12.95 is above the 20-day moving average (MA) of 12.75, above the 50-day MA of 12.62, and below the 200-day MA of 14.44, indicating a neutral trend. The MACD of 0.14 indicates Negative momentum. The RSI at 56.73 is Neutral, neither overbought nor oversold. The STOCH value of 80.60 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ACKAY.
Arcelik Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.53B | 17.13 | 8.82% | 2.39% | 1.78% | -25.36% | |
72 Outperform | $1.84B | 16.39 | 20.20% | 0.21% | 5.11% | 34.02% | |
67 Neutral | $7.40B | 17.87 | 5.20% | ― | -0.82% | -23.99% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $1.31B | -50.49 | -1.95% | 4.16% | 4.34% | -141.36% | |
50 Neutral | $4.54B | 14.29 | 11.76% | 7.40% | -11.36% | -133.01% | |
49 Neutral | $1.77B | 42.90 | 1.98% | ― | 2.58% | 30.99% |
* Consumer Cyclical Sector Average
ACKAY
Arcelik
13.44
-4.63
-25.64%
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-11.25%
TILE
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31.58
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36.77
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MHK
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119.99
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WHR
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76.96
-25.04
-24.55%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.