Cosan (CSAN) AI Stock Analysis

• Market Cap: $2.45B
• Dividend Yield: 7.38%
• Average Volume (3M): 1.47M
• Price to Earnings (P/E): 5.1
• Beta (1Y): 0.53
• Revenue Growth: -5.62%
• EPS Growth: -486.38%
• Country: US
• Employees: 53,498
• Sector: Energy
• Sector Strength: 67
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): -0.38
• Shares Outstanding: 464,661,250
• 10 Day Avg. Volume: 1,737,083
• 30 Day Avg. Volume: 1,469,070
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 6.66
• Enterprise Value/Revenue: 0.38
• Enterprise Value/Gross Profit: 1.19
• Enterprise Value/Ebitda: 1.33
• 1Y Price Target: $5.00
• Price Target Upside: -5.84% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 58 Neutral
• Price Target: $5.00 ▼(-5.84% Downside)

Cosan's overall stock score reflects a company with solid revenue growth and cash flow generation but facing significant profitability challenges due to high leverage and net losses. The technical indicators suggest a bearish trend, and the valuation metrics indicate potential overvaluation. The earnings call provided a mixed outlook, with some positive developments offset by ongoing challenges.

Positive Factors

Debt Management

The company raised R$2.5bn in Q4 at a cost below its average, enabling it to prepay the 2027 bond and improve its debt profile.

Financial Strategy

Cosan's cash flow generation of R$552mn was supported by dividends inflow and asset sales, showcasing effective financial strategy.

Shareholder Returns

Cosan announced a buyback program of up to 115mn shares, representing 6% of total outstanding shares, which could enhance shareholder value.

Negative Factors

Financial Performance

Cosan reported a weak 4Q24 with a R$9.3bn Net Loss, attributed to several negative factors including a negative equity pickup from Raizen.

Market Concerns

Share underperformance is linked to investor concerns about the HoldCo's leverage and return on recent investments amid rising interest rates in Brazil.

Cosan Business Overview & Revenue Model

Company Description

Cosan S.A. (CSAN) is a diversified conglomerate based in Brazil, primarily engaged in the energy and logistics sectors. The company operates through various subsidiaries, focusing on the production and distribution of biofuels, particularly ethanol, as well as sugar, renewable energy, and natural gas distribution. Cosan also has significant operations in logistics, offering integrated solutions for the transportation and storage of goods. Additionally, the company has interests in lubricants and land management, contributing to its diversified business model.

How the Company Makes Money

Cosan makes money through several key revenue streams. The company generates significant income from its biofuels and sugar segments, where it produces and sells ethanol and sugar, capitalizing on Brazil's position as a leading producer of these commodities. Revenue is also derived from its natural gas distribution business, where Cosan supplies natural gas to residential, commercial, and industrial customers in Brazil. The logistics operations provide another source of income, offering transportation, storage, and port services that are critical for agricultural and industrial sectors in the region. Cosan's lubricants business, which involves the production and sale of automotive and industrial lubricants, further complements its revenue streams. Strategic partnerships, such as joint ventures and alliances with other major companies, enhance its market presence and contribute to its financial performance. Overall, Cosan's diversified portfolio and strong presence in the energy and logistics sectors underpin its revenue-generating capabilities.

Cosan Financial Statement Overview

Summary

Cosan's financial performance shows solid revenue growth and cash flow generation but struggles with profitability due to high leverage and net losses. The significant debt levels pose risks if not managed effectively. Improvements in net income and equity position are crucial for future stability.

Income Statement

Cosan's income statement shows a mixed performance. The gross profit margin for the latest year was approximately 31.2%, indicating effective cost management. However, the net profit margin was negative due to a significant net loss. Revenue growth from 2023 to 2024 was about 11.36%, showing positive growth momentum. Despite a solid EBIT margin of 21.14%, the company faces profitability challenges.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of approximately 6.69, indicating heavy reliance on debt financing, which can be risky. The equity ratio stands at 7.72%, suggesting a low proportion of assets financed by equity. Return on equity is negative due to net losses, highlighting the need for improved profitability. Despite this, the company maintains substantial cash reserves.

Cash Flow

Cosan's cash flow statement shows strong operating cash flow relative to net income, reflecting effective cash management. Free cash flow grew by 30.9% from the previous year, suggesting an improving cash position. While the free cash flow to net income ratio is positive due to cash generation, the net income loss tempers the overall cash flow assessment.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	43.55B	43.95B	39.47B	39.74B	24.91B	13.51B
Gross Profit	13.71B	13.71B	10.92B	8.98B	6.34B	3.69B
EBITDA	12.25B	13.22B	14.12B	6.87B	4.53B	1.39B
Net Income	-11.74B	-9.42B	1.09B	2.82B	6.31B	859.48M
Balance Sheet
Total Assets	126.04B	141.27B	139.87B	134.48B	97.84B	83.71B
Cash, Cash Equivalents and Short-Term Investments	16.51B	20.18B	18.27B	15.96B	21.04B	17.62B
Total Debt	66.78B	72.97B	62.18B	56.52B	48.93B	45.25B
Total Liabilities	92.93B	101.87B	88.88B	86.32B	68.97B	62.89B
Stockholders Equity	7.19B	10.90B	20.96B	20.65B	14.74B	5.26B
Cash Flow
Free Cash Flow	3.79B	5.25B	4.01B	5.44B	1.16B	1.09B
Operating Cash Flow	12.63B	13.08B	10.28B	9.97B	5.22B	2.14B
Investing Cash Flow	311.06M	-4.49B	-4.30B	-20.61B	5.01B	-2.34B
Financing Cash Flow	-16.49B	-6.61B	-4.52B	8.17B	1.05B	-1.54B

Cosan Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.31
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSAN, the sentiment is Positive. The current price of 5.31 is above the 20-day moving average (MA) of 4.27, above the 50-day MA of 4.43, and above the 200-day MA of 5.28, indicating a bullish trend. The MACD of 0.15 indicates Negative momentum. The RSI at 73.81 is Negative, neither overbought nor oversold. The STOCH value of 93.58 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CSAN.

Cosan Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DINO	74 Outperform	$9.65B	35.13	-0.93%	3.91%	-14.58%	-107.50%
UGP	74 Outperform	$3.96B	7.75	18.65%	3.42%	-6.18%	-9.87%
Sector *	65 Neutral	$15.28B	7.48	3.19%	5.33%	4.10%	-60.58%
CSAN	58 Neutral	$2.45B	5.14	-83.87%	7.38%	-5.62%	-486.38%
CVI	55 Neutral	$3.11B	268.82	-50.65%	8.78%	-15.98%	-160.88%
DK	51 Neutral	$1.92B	―	-200.75%	3.26%	-29.94%	-723.41%
PBF	51 Neutral	$3.27B	―	-17.30%	3.86%	-18.73%	-236.79%