ESCO TECHNOLOGIES INC (ESE) Stock Fundamental Analysis
NYSE:ESE - New York Stock Exchange, Inc. - US2963151046 - Common Stock - Currency: USD
ESE gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 128 industry peers in the Machinery industry. While ESE has a great health rating, its profitability is only average at the moment. ESE shows excellent growth, but is valued quite expensive already. This makes ESE very considerable for growth investing!
1. Profitability
1.1 Basic Checks
In the past year ESE was profitable.
In the past year ESE had a positive cash flow from operations.
ESE had positive earnings in each of the past 5 years.
ESE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ESE has a better Return On Assets (6.14%) than 63.28% of its industry peers.
With a Return On Equity value of 8.91%, ESE perfoms like the industry average, outperforming 53.13% of the companies in the same industry.
ESE has a Return On Invested Capital (8.25%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for ESE is below the industry average of 10.56%.
The last Return On Invested Capital (8.25%) for ESE is above the 3 year average (7.18%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.14% | ||
| ROE | 8.91% | ||
| ROIC | 8.25% |
ROA(3y)5.34%
ROA(5y)5.46%
ROE(3y)8.09%
ROE(5y)8.17%
ROIC(3y)7.18%
ROIC(5y)6.57%
1.3 Margins
With a decent Profit Margin value of 10.44%, ESE is doing good in the industry, outperforming 70.31% of the companies in the same industry.
ESE's Profit Margin has declined in the last couple of years.
The Operating Margin of ESE (14.80%) is better than 70.31% of its industry peers.
In the last couple of years the Operating Margin of ESE has remained more or less at the same level.
Looking at the Gross Margin, with a value of 39.63%, ESE is in the better half of the industry, outperforming 73.44% of the companies in the same industry.
ESE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.8% | ||
| PM (TTM) | 10.44% | ||
| GM | 39.63% |
OM growth 3Y7.68%
OM growth 5Y-0.55%
PM growth 3Y3.78%
PM growth 5Y-2.32%
GM growth 3Y1.35%
GM growth 5Y-0.16%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ESE is destroying value.
ESE has about the same amout of shares outstanding than it did 1 year ago.
ESE has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, ESE has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 6.51 indicates that ESE is not in any danger for bankruptcy at the moment.
ESE has a Altman-Z score of 6.51. This is amongst the best in the industry. ESE outperforms 85.94% of its industry peers.
The Debt to FCF ratio of ESE is 1.20, which is an excellent value as it means it would take ESE, only 1.20 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.20, ESE belongs to the top of the industry, outperforming 82.03% of the companies in the same industry.
ESE has a Debt/Equity ratio of 0.09. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.09, ESE is doing good in the industry, outperforming 77.34% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.09 | ||
| Debt/FCF | 1.2 | ||
| Altman-Z | 6.51 |
ROIC/WACC0.81
WACC10.15%
2.3 Liquidity
A Current Ratio of 2.04 indicates that ESE has no problem at all paying its short term obligations.
ESE's Current ratio of 2.04 is in line compared to the rest of the industry. ESE outperforms 50.00% of its industry peers.
ESE has a Quick Ratio of 1.35. This is a normal value and indicates that ESE is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.35, ESE is in line with its industry, outperforming 55.47% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.04 | ||
| Quick Ratio | 1.35 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 24.46% over the past year.
Measured over the past 5 years, ESE shows a small growth in Earnings Per Share. The EPS has been growing by 5.96% on average per year.
ESE shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.96%.
Measured over the past years, ESE shows a small growth in Revenue. The Revenue has been growing by 7.18% on average per year.
EPS 1Y (TTM)24.46%
EPS 3Y16.26%
EPS 5Y5.96%
EPS Q2Q%72.58%
Revenue 1Y (TTM)8.96%
Revenue growth 3Y12.8%
Revenue growth 5Y7.18%
Sales Q2Q%13.15%
3.2 Future
Based on estimates for the next years, ESE will show a very strong growth in Earnings Per Share. The EPS will grow by 26.33% on average per year.
ESE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.87% yearly.
EPS Next Y38.69%
EPS Next 2Y26.33%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year10.63%
Revenue Next 2Y13.87%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 35.32, the valuation of ESE can be described as expensive.
69.53% of the companies in the same industry are cheaper than ESE, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 23.99. ESE is valued slightly more expensive when compared to this.
A Price/Forward Earnings ratio of 24.51 indicates a rather expensive valuation of ESE.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ESE is on the same level as its industry peers.
ESE's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 20.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.32 | ||
| Fwd PE | 24.51 |
4.2 Price Multiples
65.63% of the companies in the same industry are cheaper than ESE, based on the Enterprise Value to EBITDA ratio.
ESE's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. ESE is more expensive than 60.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.19 | ||
| EV/EBITDA | 20.25 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ESE has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ESE's earnings are expected to grow with 26.33% in the coming years.
PEG (NY)0.91
PEG (5Y)5.93
EPS Next 2Y26.33%
EPS Next 3YN/A
5. Dividend
5.1 Amount
ESE has a yearly dividend return of 0.20%, which is pretty low.
Compared to an average industry Dividend Yield of 2.02, ESE has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.44, ESE's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.2% |
5.2 History
The dividend of ESE has a limited annual growth rate of 0.01%.
ESE has paid a dividend for at least 10 years, which is a reliable track record.
ESE has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)0.01%
Div Incr Years0
Div Non Decr Years3
5.3 Sustainability
ESE pays out 7.48% of its income as dividend. This is a sustainable payout ratio.
The dividend of ESE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP7.48%
EPS Next 2Y26.33%
EPS Next 3YN/A
163.53
-0.53 (-0.32%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners99.47%
Inst Owner Change-1.08%
Ins Owners0.31%
Ins Owner Change3.23%
Market Cap4.22B
Analysts80
Price Target173.91 (6.35%)
Short Float %1.23%
Short Ratio1.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.2% |
Yearly Dividend0.32
Dividend Growth(5Y)0.01%
DP7.48%
Div Incr Years0
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)23.18%
Min EPS beat(2)0.73%
Max EPS beat(2)45.62%
EPS beat(4)3
Avg EPS beat(4)12.3%
Min EPS beat(4)-4.56%
Max EPS beat(4)45.62%
EPS beat(8)6
Avg EPS beat(8)7.3%
EPS beat(12)10
Avg EPS beat(12)8.01%
EPS beat(16)12
Avg EPS beat(16)4.91%
Revenue beat(2)1
Avg Revenue beat(2)2.43%
Min Revenue beat(2)-0.38%
Max Revenue beat(2)5.25%
Revenue beat(4)2
Avg Revenue beat(4)0.58%
Min Revenue beat(4)-4.11%
Max Revenue beat(4)5.25%
Revenue beat(8)5
Avg Revenue beat(8)1.22%
Revenue beat(12)9
Avg Revenue beat(12)2.95%
Revenue beat(16)10
Avg Revenue beat(16)1.49%
PT rev (1m)2.25%
PT rev (3m)15.4%
EPS NQ rev (1m)0%
EPS NQ rev (3m)18.72%
EPS NY rev (1m)0%
EPS NY rev (3m)20.15%
Revenue NQ rev (1m)-3.79%
Revenue NQ rev (3m)-8%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.32 | ||
| Fwd PE | 24.51 | ||
| P/S | 4 | ||
| P/FCF | 39.19 | ||
| P/OCF | 27.59 | ||
| P/B | 3.41 | ||
| P/tB | 13.69 | ||
| EV/EBITDA | 20.25 |
EPS(TTM)4.63
EY2.83%
EPS(NY)6.67
Fwd EY4.08%
FCF(TTM)4.17
FCFY2.55%
OCF(TTM)5.93
OCFY3.62%
SpS40.89
BVpS47.92
TBVpS11.95
PEG (NY)0.91
PEG (5Y)5.93
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.14% | ||
| ROE | 8.91% | ||
| ROCE | 10.56% | ||
| ROIC | 8.25% | ||
| ROICexc | 8.67% | ||
| ROICexgc | 25.47% | ||
| OM | 14.8% | ||
| PM (TTM) | 10.44% | ||
| GM | 39.63% | ||
| FCFM | 10.2% |
ROA(3y)5.34%
ROA(5y)5.46%
ROE(3y)8.09%
ROE(5y)8.17%
ROIC(3y)7.18%
ROIC(5y)6.57%
ROICexc(3y)7.55%
ROICexc(5y)6.9%
ROICexgc(3y)24.04%
ROICexgc(5y)22.95%
ROCE(3y)9.19%
ROCE(5y)8.41%
ROICexcg growth 3Y7.45%
ROICexcg growth 5Y0.32%
ROICexc growth 3Y16.12%
ROICexc growth 5Y2.2%
OM growth 3Y7.68%
OM growth 5Y-0.55%
PM growth 3Y3.78%
PM growth 5Y-2.32%
GM growth 3Y1.35%
GM growth 5Y-0.16%
F-Score9
Asset Turnover0.59
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.09 | ||
| Debt/FCF | 1.2 | ||
| Debt/EBITDA | 0.51 | ||
| Cap/Depr | 81.17% | ||
| Cap/Sales | 4.29% | ||
| Interest Coverage | 10.71 | ||
| Cash Conversion | 72.16% | ||
| Profit Quality | 97.75% | ||
| Current Ratio | 2.04 | ||
| Quick Ratio | 1.35 | ||
| Altman-Z | 6.51 |
F-Score9
WACC10.15%
ROIC/WACC0.81
Cap/Depr(3y)83.06%
Cap/Depr(5y)86.64%
Cap/Sales(3y)4.53%
Cap/Sales(5y)4.84%
Profit Quality(3y)77.69%
Profit Quality(5y)82.49%
High Growth Momentum
Growth
EPS 1Y (TTM)24.46%
EPS 3Y16.26%
EPS 5Y5.96%
EPS Q2Q%72.58%
EPS Next Y38.69%
EPS Next 2Y26.33%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)8.96%
Revenue growth 3Y12.8%
Revenue growth 5Y7.18%
Sales Q2Q%13.15%
Revenue Next Year10.63%
Revenue Next 2Y13.87%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y19.51%
EBIT growth 3Y21.46%
EBIT growth 5Y6.59%
EBIT Next Year62.36%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y22.54%
FCF growth 3Y-3.27%
FCF growth 5Y1.81%
OCF growth 1Y22.97%
OCF growth 3Y1.19%
OCF growth 5Y3.95%