Sendas Distribuidora (ASAIY) AI Stock Analysis

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Sendas Distribuidora

(OTC:ASAIY)

68Neutral

Sendas Distribuidora's strong financial performance and positive earnings call outlook are key strengths, offset by technical indicators suggesting bearish momentum and high leverage. Valuation is fair, but the lack of dividend yield could deter some investors. The company's ability to manage debt and sustain growth amid macroeconomic challenges will be crucial for future performance.

Positive Factors

Earnings Potential

A combination of lower rates and initial deleveraging has the capability of nearly doubling EPS.

Financial Performance

Gross profit rose 10.7%, helped by better supplier terms and by new services rolled out to 50% of stores.

Negative Factors

Debt and Liabilities

ASAI has received notification of potential liability for as much as R$12.9bn in tax and labor contingencies.

Sendas Distribuidora (ASAIY) vs. S&P 500 (SPY)

Market Cap

$1.98B

Dividend Yield0.84%

Average Volume (3M)4.59K

Price to Earnings (P/E)13.8

Beta (1Y)0.24

Revenue Growth10.41%

EPS Growth-22.99%

CountryUS

Employees77,370

SectorConsumer Defensive

Sector Strength96

IndustryRetailers - Staples

Share Statistics

EPS (TTM)0.51

Shares Outstanding270,449,040

10 Day Avg. Volume13,778

30 Day Avg. Volume4,592

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.41

Price to Cash Flow (P/CF)0.70

P/FCF Ratio0.80

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$7.50

Price Target Upside6.69% Upside

Rating ConsensusHold

Number of Analyst Covering1

Sendas Distribuidora Business Overview & Revenue Model

Company DescriptionSendas Distribuidora S.A. (ASAI), commonly known as Assaí Atacadista, is a leading wholesale retailer in Brazil. The company operates in the cash and carry sector, providing a wide range of products including groceries, electronics, household items, and more, primarily to small and medium-sized retailers, as well as individual consumers seeking bulk purchases. Assaí Atacadista is recognized for offering competitive prices and a robust selection of high-quality products, making it a prominent player in the Brazilian wholesale market.

How the Company Makes MoneySendas Distribuidora (ASAI) generates revenue primarily through its cash and carry wholesale stores, known as Assaí Atacadista. The company makes money by purchasing goods in large quantities directly from manufacturers and suppliers, allowing it to benefit from economies of scale and negotiate favorable pricing. These goods are then sold to customers at competitive prices, with a focus on both individual consumers and business customers who buy in bulk. The company's revenue streams are largely driven by sales within its extensive network of stores across Brazil. Additionally, Assaí Atacadista may leverage partnerships with suppliers and manufacturers to offer exclusive products or promotions, further enhancing its revenue potential. The company's strategic location of stores and focus on cost efficiency also contribute to its profitability.

Sendas Distribuidora Financial Statement Overview

Summary

Sendas Distribuidora demonstrates robust revenue growth and effective cost management. However, the high leverage indicated by a debt-to-equity ratio of 5.20 poses a risk, despite strong cash flows. Improvement in net profitability and debt management are crucial for enhanced financial stability.

Income Statement

Positive

Sendas Distribuidora demonstrates solid revenue growth with a 8.39% increase in TTM revenue compared to the previous year. The gross profit margin increased to 17.52%, indicating efficient cost management. However, the net profit margin decreased to 0.88%, reflecting challenges in controlling operational costs or higher interest expenses.

Balance Sheet

Positive

The company's debt-to-equity ratio is relatively high at 5.20, highlighting significant leverage. However, there is a gradual improvement in equity, and the return on equity is 12.74%, indicating effective use of shareholder funds despite the leverage.

Cash Flow

Positive

Operating cash flow remains strong with a ratio of 6.05 compared to net income, reflecting robust cash generation. Free cash flow decreased by 31.63% on a TTM basis, suggesting increased capital expenditures or reduced cash from operations.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
72.08B	66.50B	54.52B	41.90B	36.04B	30.23B
	Gross Profit
12.63B	9.43B	8.96B	7.14B	5.91B	5.34B
	EBIT
3.66B	3.19B	2.85B	2.58B	2.07B	1.73B
	EBITDA
5.33B	4.63B	3.69B	3.21B	3.71B	2.41B
	Net Income Common Stockholders
636.00M	710.00M	1.22B	1.61B	1.40B	1.05B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.46B	5.51B	5.84B	2.55B	3.53B	5.03B
	Total Assets
46.60B	43.18B	40.62B	22.85B	18.82B	35.91B
	Total Debt
24.37B	24.37B	20.95B	12.08B	10.61B	12.57B
	Net Debt
18.91B	18.91B	15.11B	9.53B	7.08B	7.55B
	Total Liabilities
41.97B	38.55B	36.72B	20.09B	17.47B	26.20B
	Stockholders Equity
4.63B	4.63B	3.90B	2.77B	1.35B	7.10B
Cash Flow		Free Cash Flow
1.83B	2.68B	984.00M	187.00M	1.85B	1.75B
	Operating Cash Flow
3.85B	5.96B	5.14B	3.27B	3.50B	3.16B
	Investing Cash Flow
-1.84B	-3.06B	-3.79B	-3.28B	-4.79B	-4.37B
	Financing Cash Flow
-2.39B	-3.29B	1.94B	-978.00M	-1.18B	4.71B

Sendas Distribuidora Technical Analysis

Technical Analysis Sentiment

Positive

Last Price7.03

Price Trends

50DMA

6.51

Positive

100DMA

5.80

Positive

200DMA

6.79

Positive

Market Momentum

MACD

0.19

Positive

RSI

59.31

Neutral

STOCH

85.80

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ASAIY, the sentiment is Positive. The current price of 7.03 is above the 20-day moving average (MA) of 6.97, above the 50-day MA of 6.51, and above the 200-day MA of 6.79, indicating a bullish trend. The MACD of 0.19 indicates Positive momentum. The RSI at 59.31 is Neutral, neither overbought nor oversold. The STOCH value of 85.80 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ASAIY.

Sendas Distribuidora Risk Analysis

Sendas Distribuidora disclosed 61 risk factors in its most recent earnings report. Sendas Distribuidora 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

Sendas Distribuidora Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WMT	79 Outperform	$740.84B	38.42	22.23%	0.90%	5.07%	25.86%
COST	78 Outperform	$434.47B	57.17	32.89%	0.47%	6.13%	12.14%
KR	73 Outperform	$48.23B	19.87	26.59%	1.71%	-1.94%	23.94%
ACI	71 Outperform	$12.28B	11.91	31.26%	2.26%	1.46%	-26.54%
ASAIY	68 Neutral	$1.98B	13.80	15.25%	0.84%	10.41%	-22.99%
Sector *	63 Neutral	$9.39B	14.85	4.11%	187.30%	3.96%	6.50%
TGT	60 Neutral	$42.72B	10.59	29.12%	4.74%	-0.79%	-0.90%

* Consumer Defensive Sector Average

Performance Comparison

ASAIY

Sendas Distribuidora

7.67

-5.59

-42.16%

COST

Costco

975.84

255.89

35.54%

Kroger Company

72.00

17.06

31.05%

TGT

Target

92.15

-68.25

-42.55%

WMT

Walmart

94.96

35.76

60.41%

ACI

Albertsons Companies

22.41

2.87

14.69%

Sendas Distribuidora Earnings Call Summary

Earnings Call Date: Feb 19, 2025 | % Change Since: 11.94% | Next Earnings Date: May 8, 2025

Earnings Call Sentiment Positive

The earnings call reflects a positive sentiment due to significant achievements in store expansion, revenue growth, EBITDA improvement, and effective debt management. However, challenges such as weaker same-store sales and regional sales performance, as well as issues with B2B payment terms, present areas for improvement.

Highlights

Store Openings and Expansion

Assaí Atacadista opened 15 new stores in 2024, reaching over 1 million square meters of sales area with a total of 302 stores in operation across the country.

Revenue Growth

The company recorded BRL 22.1 million in gross sales for Q4, with an annual total of BRL 80 million, marking an increase of BRL 8 billion compared to 2023.

EBITDA Improvement

The EBITDA margin improved by 30 bps compared to Q4 2023, reaching 8.1% post-IFRS and 6% pre-IFRS, showing a return to pre-conversion project levels.

Net Debt Reduction

Assaí reduced its net debt-to-EBITDA ratio to 3.04, below the guidance of 3.2, indicating effective debt management and cash generation.

Sustainability Initiatives

The company reduced Scope 1 and 2 emissions by 10% and implemented a food donation program that diverted over 1,900 tons of waste from landfills.

Lowlights

Below Expectations in Same-Store Sales

Same-store sales were below expectations, partially due to shifts in packaging sizes and consumer purchasing power pressures.

Challenges in the Northeast Region

Sales in the Northeast were weaker than expected, contributing to a challenging December performance.

Impact of B2B Payment Terms

The lack of alignment with market payment term trends for B2B customers led to a loss in volume sales.

Company Guidance

In the fourth quarter of 2024, Assaí Atacadista reported a gross sales volume of BRL 22.1 million, marking an increase of BRL 1.8 billion from the previous year, and bringing the total annual gross sales to BRL 80 million. The company achieved an EBITDA margin of 8.1% post-IFRS adjustments, reflecting a year-over-year increase of 30 basis points. Despite challenges like fluctuating currency rates and interest rates, Assaí's net income after tax saw an impressive growth of nearly 83%. The company successfully opened 15 new stores in 2024, reaching over 1 million square meters of sales area across 302 stores nationwide. Assaí's strategic focus on reducing leverage resulted in a net debt-to-EBITDA ratio of 3.04, surpassing the guidance of 3.2. The company anticipates further reducing this ratio to 2.6 by the end of 2025, with plans to open 10 new stores in 2025 while maintaining a CapEx of BRL 1.0 to 1.2 billion.

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.