Corporacion America Airports SA (CAAP): A Deep Dive into Its Performance Metrics
Long-established in the Transportation industry, Corporacion America Airports SA (NYSE:CAAP) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 2.07%, juxtaposed with a three-month change of 34.45%. Fresh insights from the GuruFocus Score Rating hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Corporacion America Airports SA.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Financial strength rank: 5/10
Profitability rank: 6/10
Growth rank: 1/10
GF Value rank: 3/10
Momentum rank: 6/10
Based on the above method, GuruFocus assigned Corporacion America Airports SA the GF Score of 63 out of 100, which signals poor future outperformance potential.
Corporacion America Airports SA: A Snapshot
Corporacion America Airports SA acquires, develops, and operates airport concessions. Its operating segments are geographically divided into Argentina, Italy, Brazil, Uruguay, Ecuador, and Armenia. The company generates a majority of its revenue from the Argentina segment. The firm's revenue is categorized into Aeronautical Revenue, Non-Aeronautical Revenue, Commercial Revenue, Construction Service Revenue, and Other Revenue. With a market cap of $2.29 billion and sales of $1.57 billion, the company has an operating margin of 24.91%.
Financial Strength Analysis
Corporacion America Airports SA's financial strength indicators present some concerning insights about the company's balance sheet health. The company's interest coverage ratio of 3.4 positions it worse than 69.24% of 790 companies in the Transportation industry. This ratio highlights potential challenges the company might face when handling its interest expenses on outstanding debt. The company's Altman Z-Score is just 1.17, which is below the distress zone of 1.81. This suggests that the company may face financial distress over the next few years. Additionally, the company's low cash-to-debt ratio at 0.35 indicates a struggle in handling existing debt levels.
Growth Prospects
A lack of significant growth is another area where Corporacion America Airports SA seems to falter, as evidenced by the company's low Growth rank. The company's revenue has declined by -4.2 per year over the past three years, which underperforms worse than 71.44% of 914 companies in the Transportation industry. Stagnating revenues may pose concerns in a fast-evolving market.
Conclusion
Given the company's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential underperformance. While Corporacion America Airports SA has a rich history in the transportation industry, its current financial and growth indicators suggest that it may struggle to maintain its past performance. Investors should consider these factors when making investment decisions.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article first appeared on GuruFocus.
