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Aris Water Solutions (ARIS)
NYSE:ARIS
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Aris Water Solutions
(NYSE:ARIS)
66Neutral
Positive Factors
Financial Performance
ARIS's EBITDA estimates have increased due to better margins, indicating financial improvement.
Operational Efficiency
Strong operational execution and solid contracting updates support ARIS’s stock growth.
Strategic Acquisitions
ARIS acquired surface acres at a price below recent comparisons, offering potential cost savings and revenue opportunities.
Negative Factors
Cost Savings Challenges
Outperformance from here may be more challenging with low-hanging fruit on cost savings largely achieved.
Investor Interest
YTD outperformance of +155% total return versus the +37% AMNA Index benchmark could detract from incremental investor interest.
Market Risks
Oil market volatility risk on the Water Solutions outlook, given ties to producer activity.
Aris Water Solutions (ARIS) vs. S&P 500 (SPY)
Market Cap
$1.58B
Dividend Yield1.78%
Average Volume (3M)903.18K
Price to Earnings (P/E)32.6
Beta (1Y)1.65
Revenue Growth11.05%
EPS Growth38.06%
CountryUS
Employees276
SectorUtilities
Sector Strength94
IndustryRegulated Water
Share Statistics
EPS (TTM)0.81
Shares Outstanding32,625,340
10 Day Avg. Volume637,213
30 Day Avg. Volume903,177
Financial Highlights & Ratios
PEG Ratio0.86
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.00
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit8.89
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$31.67Price Target Upside26.88% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Aris Water Solutions Business Overview & Revenue Model
Company DescriptionAris Water Solutions, Inc. (ARIS) is a leading provider of comprehensive water management solutions primarily tailored for the oil and gas industry. The company operates in sectors related to sustainable water management, offering services such as water sourcing, transportation, recycling, and disposal. Its core products and services are aimed at optimizing the water lifecycle for its clients, thereby promoting responsible water usage and environmental stewardship.
How the Company Makes MoneyAris Water Solutions generates revenue through a multifaceted model centered on service contracts with oil and gas companies. Its key revenue streams include fees for water sourcing, transportation and logistics services, and the recycling and disposal of produced water. The company benefits from long-term agreements and partnerships with major energy producers, ensuring a steady flow of income. Additionally, by leveraging its infrastructure and technology, ARIS provides value-added services that enhance operational efficiency and sustainability for its clients, further contributing to its earnings.
Aris Water Solutions Financial Statement Overview
Summary
Aris Water Solutions demonstrates strong revenue growth and profitability with a robust gross profit margin. The company benefits from a debt-free balance sheet, enhancing its financial stability. Although cash flow generation is solid, negative free cash flow growth due to capital expenditures requires careful capital management.Income Statement
Aris Water Solutions shows strong revenue growth with a Revenue Growth Rate of 11.05% in TTM. Gross Profit Margin is robust at 40.86%, indicating efficient cost management. Net Profit Margin improved to 8.01%, reflecting enhanced profitability. The EBIT Margin of 24.81% and EBITDA Margin of 42.92% show solid operational efficiency. Overall, the company exhibits strong growth and profitability trends.85
Very Positive
Balance Sheet
The company has no debt, resulting in a Debt-to-Equity Ratio of 0, which is excellent. Return on Equity is healthy at 10%, driven by improved net income. The Equity Ratio of 24.55% is reasonable, though it indicates moderate leverage. The balance sheet reflects financial stability with no debt obligations, supporting future growth.75
Positive
Cash Flow
The Operating Cash Flow to Net Income Ratio is strong at 5.13, reflecting efficient cash generation. However, Free Cash Flow Growth Rate is negative due to capital expenditures. The Free Cash Flow to Net Income Ratio is 2.63, indicating positive cash flow relative to net income. Cash flow is solid, though future growth requires careful capital management.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 435.44M | 392.12M | 321.00M | 229.25M | 171.47M | Gross Profit |
| 177.89M | 137.51M | 114.00M | 77.57M | 32.01M | EBIT |
| 106.75M | 83.87M | 65.87M | 47.27M | 7.70M | EBITDA |
| 185.91M | 160.39M | 135.50M | 79.53M | 54.46M | Net Income Common Stockholders |
| 26.86M | 18.89M | 4.80M | -7.01M | 7.00K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 28.67M | 5.06M | 1.12M | 60.05M | 24.93M | Total Assets |
| 1.42B | 1.34B | 1.30B | 1.13B | 1.06B | Total Debt |
| 459.59M | 443.65M | 428.92M | 392.05M | 297.00M | Net Debt |
| 430.92M | 438.58M | 427.80M | 332.00M | 272.07M | Total Liabilities |
| 684.83M | 652.59M | 646.28M | 524.15M | 349.51M | Stockholders Equity |
| 348.62M | 323.90M | 309.51M | 212.87M | 708.29M |
| Cash Flow | Free Cash Flow | |||
| 78.89M | 14.14M | -76.31M | -15.85M | -71.82M | Operating Cash Flow |
| 178.88M | 183.87M | 70.21M | 58.81M | 67.77M | Investing Cash Flow |
| -145.57M | -149.58M | -136.93M | -74.66M | -139.59M | Financing Cash Flow |
| -9.70M | -30.35M | 7.78M | 50.98M | 89.67M |
Aris Water Solutions Technical Analysis
Neutral
24.96
Price Trends
28.23
Negative
27.20
Negative
22.49
Positive
Market Momentum
-0.99
Negative
46.07
Neutral
68.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARIS, the sentiment is Neutral. The current price of 24.96 is below the 20-day moving average (MA) of 26.18, below the 50-day MA of 28.23, and above the 200-day MA of 22.49, indicating a neutral trend. The MACD of -0.99 indicates Negative momentum. The RSI at 46.07 is Neutral, neither overbought nor oversold. The STOCH value of 68.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ARIS.
Aris Water Solutions Risk Analysis
Aris Water Solutions disclosed 61 risk factors in its most recent earnings report. Aris Water Solutions reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Aris Water Solutions Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.83B | 18.67 | 7.49% | 3.01% | 12.34% | 11.78% | |
76 Outperform | $1.10B | 24.93 | 10.17% | 2.12% | 15.40% | 40.04% | |
76 Outperform | $364.60M | 17.93 | 8.69% | 3.42% | 9.20% | 18.90% | |
70 Outperform | $370.54M | 23.07 | 9.01% | 1.73% | -25.66% | -5.11% | |
66 Neutral | $1.58B | 32.58 | 7.69% | 1.78% | 11.05% | 38.06% | |
63 Neutral | $8.52B | 12.04 | 6.70% | 4.34% | 3.08% | -11.00% | |
60 Neutral | $506.51M | 24.85 | 8.99% | 2.43% | 5.53% | -14.72% |
* Utilities Sector Average
Performance Comparison
ARIS
Aris Water Solutions
24.96
11.53
85.85%
ARTNA
Artesian Resources
35.52
0.68
1.95%
CWCO
Consolidated Water Co
23.24
-2.09
-8.25%
MSEX
Middlesex Water Company
63.12
12.30
24.20%
SJW
SJW
56.74
3.31
6.20%
YORW
The York Water Company
35.20
-0.02
-0.06%
Aris Water Solutions Earnings Call Summary
Earnings Call Date:Feb 26, 2025
(Q4-2024)
| % Change Since: -2.27%|
Next Earnings Date:May 06, 2025
Earnings Call Sentiment Positive
The earnings call was overall positive, with significant achievements in volume growth, financial performance, and safety records. Strategic acquisitions and shareholder return initiatives further bolstered the positive outlook. However, challenges such as weather-related impacts and skim oil pricing adjustments were noted.Q4-2024 Updates
Positive Updates
Record Quarterly Volumes
Achieved record quarterly volumes in the water solutions business, with a 14% sequential growth in water solution volumes.
Increased Shareholder Returns
Announced a 33% increase to the dividend to $0.14 per share, reflecting strong cash flow generation and commitment to returning capital to shareholders.
Safety Record
Ended 2024 without a single employee or contractor recordable safety incident, highlighting a strong safety culture.
Strategic Acquisitions and Initiatives
Acquired the McNeil Ranch, providing significant operational advantages and long-term growth opportunities. Continued progress on beneficial reuse activities and expansion into industrial water treatment.
Strong Financial Performance in 2024
Generated $73 million of free cash flow, with adjusted EBITDA of $211.9 million, up 21% from the previous year, and maintained strong margins.
Negative Updates
Weather-Related Impacts
Cold weather in Q1 2025 led to some customer production shut-ins, with a $1.5 million impact on adjusted EBITDA.
Challenges in Skim Oil Pricing
Forecasted a decrease in skim oil pricing, which is expected to impact 2025 revenues by approximately $3 million annually.
Company Guidance
The guidance provided in the Aris Water Solutions Fourth Quarter 2024 Earnings Conference Call highlighted several key metrics and strategic initiatives for the company. Aris achieved record quarterly volumes in its water solutions business, with a sequential growth of 14% in water solution volumes and a year-over-year increase of 7% in produced water volume. The company maintained strong margins, achieving an adjusted operating margin of $0.44 per barrel and an adjusted EBITDA of $54.5 million for the fourth quarter. For the full year 2024, Aris recorded an adjusted EBITDA of $211.9 million, a 21% increase from 2023, with adjusted operating margins up 15%. Capital expenditures totaled $101 million, generating $73 million in free cash flow. Looking ahead to 2025, Aris expects produced water volumes between 1.15 and 1.21 million barrels per day, with water solutions volumes anticipated to rise by 15% due to increased completion activity. The company forecasts adjusted EBITDA of $215 million to $235 million for 2025. Additionally, Aris announced a 33% increase in their dividend to $0.14 per share, reflecting confidence in their contracted cash flows and strategic growth initiatives, including the acquisition of the McNeil Ranch and ongoing progress in beneficial reuse and mineral extraction projects.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.