Alcoa Corporation
Alcoa Corporation Fundamental Analysis
Alcoa Corporation (AA) shows moderate financial fundamentals with a PE ratio of 16.26, profit margin of 9.01%, and ROE of 18.80%. The company generates $12.9B in annual revenue with strong year-over-year growth of 13.81%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 69.9/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze AA's fundamental strength across five key dimensions:
Efficiency Score
WeakAA struggles to generate sufficient returns from assets.
Valuation Score
ModerateAA shows balanced valuation metrics.
Growth Score
ModerateAA shows steady but slowing expansion.
Financial Health Score
ExcellentAA maintains a strong and stable balance sheet.
Profitability Score
ModerateAA maintains healthy but balanced margins.
Key Financial Metrics
Is AA Expensive or Cheap?
P/E Ratio
AA trades at 16.26 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, AA's PEG of 7.12 indicates potential overvaluation.
Price to Book
The market values Alcoa Corporation at 3.04 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 10.98 times EBITDA. This signals the market has high growth expectations.
How Well Does AA Make Money?
Net Profit Margin
For every $100 in sales, Alcoa Corporation keeps $9.01 as profit after all expenses.
Operating Margin
Core operations generate 7.62 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $18.80 in profit for every $100 of shareholder equity.
ROA
Alcoa Corporation generates $7.08 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Alcoa Corporation generates limited operating cash flow of $1.20B, signaling weaker underlying cash strength.
Free Cash Flow
Alcoa Corporation produces free cash flow of $573.33M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $2.17 in free cash annually.
FCF Yield
AA converts 3.00% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
16.26
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
7.12
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.04
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.48
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.00
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.45
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.19
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.08
vs 25 benchmark
How AA Stacks Against Its Sector Peers
| Metric | AA Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 16.26 | 24.08 | Better (Cheaper) |
| ROE | 18.80% | 921.00% | Weak |
| Net Margin | 9.01% | -113338.00% (disorted) | Weak |
| Debt/Equity | 0.00 | 0.53 | Strong (Low Leverage) |
| Current Ratio | 1.45 | 5.09 | Neutral |
| ROA | 7.08% | -9816.00% (disorted) | Weak |
AA outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Alcoa Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
1.11%
Industry Style: Cyclical, Commodity, Value
GrowingEPS CAGR
104.64%
Industry Style: Cyclical, Commodity, Value
High GrowthFCF CAGR
-21.03%
Industry Style: Cyclical, Commodity, Value
Declining