Cosan (CSAN) AI Stock Analysis

• Market Cap: $2.56B
• Dividend Yield: 5.69%
• Average Volume (3M): 1.45M
• Price to Earnings (P/E): 5.1
• Beta (1Y): 0.68
• Revenue Growth: 3.12%
• EPS Growth: -822.66%
• Country: US
• Employees: 53,498
• Sector: Energy
• Sector Strength: 55
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): -0.08
• Shares Outstanding: 464,661,250
• 10 Day Avg. Volume: 1,214,292
• 30 Day Avg. Volume: 1,450,691
• PEG Ratio: <0.01
• Price to Book (P/B): 1.31
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 3.72
• 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: 124.26% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Cosan's stock score reflects a company with solid revenue growth and positive cash flow, facing challenges from high leverage and net losses. Technical analysis shows short-term bullish trends, while valuation metrics highlight profitability concerns. The latest earnings call suggests cautious optimism but emphasizes the need for strategic financial improvements.

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 leading Brazilian conglomerate primarily involved in the energy and logistics sectors. The company operates through multiple business units, including Raízen, which is a joint venture with Royal Dutch Shell in the production and distribution of ethanol, sugar, and energy; Comgás, a leading natural gas distributor in Brazil; and Moove, which focuses on the production and distribution of lubricants. Cosan is also involved in logistics and infrastructure, providing integrated services that support its vast energy operations.

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's financial performance is characterized by strong revenue growth and cash flow generation. However, its profitability is hindered by high leverage and net losses. The high debt-to-equity ratio poses a risk, highlighting the need for improved net income and equity position 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
	EBIT
7.69B	6.88B	5.93B	8.70B	2.58B
	EBITDA
13.22B	14.12B	6.87B	4.53B	1.39B
	Net Income Common Stockholders
-9.42B	1.09B	2.82B	6.31B	859.48M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
20.18B	18.27B	15.96B	21.04B	17.62B
	Total Assets
141.27B	139.87B	134.48B	97.84B	83.71B
	Total Debt
72.97B	62.18B	56.52B	48.93B	45.25B
	Net Debt
56.06B	47.52B	43.22B	32.75B	31.61B
	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: Neutral
• Last Price: 5.44
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSAN, the sentiment is Neutral. The current price of 5.44 is above the 20-day moving average (MA) of 5.39, above the 50-day MA of 5.23, and below the 200-day MA of 6.91, indicating a neutral trend. The MACD of 0.11 indicates Negative momentum. The RSI at 52.06 is Neutral, neither overbought nor oversold. The STOCH value of 53.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CSAN.

Cosan Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DINO	72 Outperform	$7.01B	35.13	-1.49%	5.37%	-11.17%	-109.60%
UGP	69 Neutral	$3.30B	8.44	14.87%	3.49%	-4.58%	-23.88%
CSAN	65 Neutral	$2.56B	5.14	-54.48%	5.69%	3.12%	-822.66%
Sector *	56 Neutral	$7.25B	3.36	-3.66%	5.65%	0.66%	-50.71%
PBF	55 Neutral	$2.64B	―	-18.01%	4.59%	-16.30%	-160.78%
DK	51 Neutral	$1.06B	―	-151.69%	5.81%	-29.23%	-931.43%
CVI	46 Neutral	$2.36B	268.82	-27.14%	8.53%	-16.21%	-130.18%