Cosan (CSAN) AI Stock Analysis

• Market Cap: $2.30B
• Dividend Yield: 6.4%
• Average Volume (3M): 1.66M
• Price to Earnings (P/E): 5.1
• Beta (1Y): 0.51
• Revenue Growth: -2.76%
• EPS Growth: -628.74%
• Country: US
• Employees: 53,498
• Sector: Energy
• Sector Strength: 51
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): -0.08
• Shares Outstanding: 464,661,250
• 10 Day Avg. Volume: 1,732,679
• 30 Day Avg. Volume: 1,659,634
• PEG Ratio: -0.21
• Price to Book (P/B): 1.56
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.93
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $12.20
• Price Target Upside: 148.47% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 57 Neutral
• Price Target: $5.00 ▲(1.83%Upside)

Cosan's overall stock score reflects a company with solid revenue growth and positive cash flow, yet facing significant profitability and leverage challenges. Technical indicators signal bearish trends, and valuation concerns persist due to negative earnings. The earnings call highlighted strategic initiatives but also underlined operational and financial risks.

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., through its subsidiaries, primarily engages in the fuel distribution business in Brazil, Europe, Latin America, North America, Asia, and internationally. The company's Raízen segment distributes and markets fuels through a franchised network of service stations under the Shell brand; engages in the petroleum refining; operation of convenience stores; manufacture and sale of automotive and industrial lubricants; and production and sale of liquefied petroleum gas. This segment also markets various products derived from sugar cane, including raw sugar, and anhydrous and hydrated ethanol, as well as engages in activities related to energy cogeneration from sugarcane bagasse; sale of electricity; and holds interests in companies involved in research and development on new technology. The company's Gas and Power segment distributes piped natural gas to customers in the industrial, residential, commercial, automotive, and cogeneration sectors; and engages in purchase and sale of electricity to other traders. Its Moove segment produces and distributes lubricants under the Mobil and Comma brands. The company's Logistics segment provides logistics services for rail transportation, storage and port loading of commodities, including grains and sugar; and leases locomotives, wagons, and another railroad equipment. Its Cosan Investments segment manages agricultural, mining, and logistics projects; and invests in climate tech fund. Cosan S.A. was founded in 1936 and is headquartered in São Paulo, Brazil.

How the Company Makes Money

Cosan generates revenue through a diversified portfolio of businesses. The key revenue streams include the production and sale of sugar, ethanol, and bioenergy through Raízen, which is one of the largest in its sector globally. This subsidiary also operates a network of Shell-branded service stations in Brazil. Cosan's subsidiary Comgás contributes significantly to revenue through the distribution of natural gas to industrial, residential, and commercial customers in Brazil. Moove adds to the revenue by producing and selling lubricants under various brands. Additionally, Cosan benefits from its logistics and infrastructure services, which support the transportation and distribution needs of its energy operations. Strategic partnerships, such as the joint venture with Shell, enhance its market reach and operational capabilities, contributing to its overall earnings.

Cosan Financial Statement Overview

Summary

Cosan demonstrates strong revenue growth and cash flow management. However, profitability is hindered by high debt levels, resulting in net losses and negative return on equity. Improving net income and equity 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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	43.95B	39.47B	39.74B	24.91B	13.51B
Gross Profit	13.71B	10.92B	8.98B	6.34B	3.69B
EBITDA	13.22B	14.12B	6.87B	4.53B	1.39B
Net Income	-9.42B	1.09B	2.82B	6.31B	859.48M
Balance Sheet
Total Assets	141.27B	139.87B	134.48B	97.84B	83.71B
Cash, Cash Equivalents and Short-Term Investments	20.18B	18.27B	15.96B	21.04B	17.62B
Total Debt	72.97B	62.18B	56.52B	48.93B	45.25B
Total Liabilities	101.87B	88.88B	86.32B	68.97B	62.89B
Stockholders Equity	10.90B	20.96B	20.65B	14.74B	5.26B
Cash Flow
Free Cash Flow	5.25B	4.01B	5.44B	1.16B	1.09B
Operating Cash Flow	13.08B	10.28B	9.97B	5.22B	2.14B
Investing Cash Flow	-4.49B	-4.30B	-20.61B	5.01B	-2.34B
Financing Cash Flow	-6.61B	-4.52B	8.17B	1.05B	-1.54B

Cosan Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.91
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSAN, the sentiment is Negative. The current price of 4.91 is below the 20-day moving average (MA) of 5.63, below the 50-day MA of 5.51, and below the 200-day MA of 6.33, indicating a bearish trend. The MACD of -0.15 indicates Positive momentum. The RSI at 36.04 is Neutral, neither overbought nor oversold. The STOCH value of 2.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CSAN.

Cosan Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DINO	71 Outperform	$7.75B	35.13	-1.49%	4.86%	-11.17%	-109.60%
UGP	71 Outperform	$3.36B	8.43	14.87%	5.03%	-4.58%	-23.80%
Sector *	68 Neutral	$14.81B	9.70	6.36%	5.32%	4.12%	-71.24%
CSAN	57 Neutral	$2.30B	5.14	-69.81%	6.40%	-2.76%	-628.74%
CVI	54 Neutral	$2.73B	268.82	-27.14%	16.62%	-16.21%	-130.18%
DK	51 Neutral	$1.29B	―	-151.69%	4.81%	-29.23%	-931.43%
PBF	48 Neutral	$2.53B	―	-18.01%	5.04%	-16.30%	-160.78%