ESCO TECHNOLOGIES INC (ESE)

US2963151046 - Common Stock

105.34  +1.06 (+1.02%)

After market: 105.34 0 (0%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to ESE. ESE was compared to 132 industry peers in the Machinery industry. ESE has an average financial health and profitability rating. ESE is quite expensive at the moment. It does show a decent growth rate.



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6

1. Profitability

1.1 Basic Checks

In the past year ESE was profitable.
ESE had a positive operating cash flow in the past year.
ESE had positive earnings in each of the past 5 years.
Each year in the past 5 years ESE had a positive operating cash flow.

1.2 Ratios

With a decent Return On Assets value of 5.25%, ESE is doing good in the industry, outperforming 62.02% of the companies in the same industry.
ESE has a Return On Equity (8.06%) which is in line with its industry peers.
ESE has a Return On Invested Capital (6.91%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for ESE is below the industry average of 10.72%.
The last Return On Invested Capital (6.91%) for ESE is above the 3 year average (6.21%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 5.25%
ROE 8.06%
ROIC 6.91%
ROA(3y)4.83%
ROA(5y)5.45%
ROE(3y)7.42%
ROE(5y)8.49%
ROIC(3y)6.21%
ROIC(5y)6.36%

1.3 Margins

ESE has a Profit Margin of 9.60%. This is in the better half of the industry: ESE outperforms 72.09% of its industry peers.
In the last couple of years the Profit Margin of ESE has declined.
With a decent Operating Margin value of 13.49%, ESE is doing good in the industry, outperforming 70.54% of the companies in the same industry.
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 39.30%, ESE is in the better half of the industry, outperforming 79.84% of the companies in the same industry.
In the last couple of years the Gross Margin of ESE has remained more or less at the same level.
Industry RankSector Rank
OM 13.49%
PM (TTM) 9.6%
GM 39.3%
OM growth 3Y2.66%
OM growth 5Y-0.34%
PM growth 3Y-10.74%
PM growth 5Y-6.4%
GM growth 3Y1.79%
GM growth 5Y0.36%

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6

2. Health

2.1 Basic Checks

ESE has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
ESE has less shares outstanding than it did 1 year ago.
The number of shares outstanding for ESE has been reduced compared to 5 years ago.
The debt/assets ratio for ESE has been reduced compared to a year ago.

2.2 Solvency

ESE has an Altman-Z score of 4.42. This indicates that ESE is financially healthy and has little risk of bankruptcy at the moment.
ESE's Altman-Z score of 4.42 is fine compared to the rest of the industry. ESE outperforms 73.64% of its industry peers.
The Debt to FCF ratio of ESE is 3.37, which is a good value as it means it would take ESE, 3.37 years of fcf income to pay off all of its debts.
ESE's Debt to FCF ratio of 3.37 is fine compared to the rest of the industry. ESE outperforms 65.89% of its industry peers.
ESE has a Debt/Equity ratio of 0.15. This is a healthy value indicating a solid balance between debt and equity.
ESE's Debt to Equity ratio of 0.15 is fine compared to the rest of the industry. ESE outperforms 75.19% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.15
Debt/FCF 3.37
Altman-Z 4.42
ROIC/WACC0.74
WACC9.29%

2.3 Liquidity

ESE has a Current Ratio of 1.98. This is a normal value and indicates that ESE is financially healthy and should not expect problems in meeting its short term obligations.
ESE's Current ratio of 1.98 is in line compared to the rest of the industry. ESE outperforms 44.96% of its industry peers.
A Quick Ratio of 1.31 indicates that ESE should not have too much problems paying its short term obligations.
ESE has a Quick ratio of 1.31. This is comparable to the rest of the industry: ESE outperforms 56.59% of its industry peers.
Industry RankSector Rank
Current Ratio 1.98
Quick Ratio 1.31

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5

3. Growth

3.1 Past

ESE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.04%, which is quite good.
Measured over the past 5 years, ESE shows a small growth in Earnings Per Share. The EPS has been growing by 6.04% on average per year.
The Revenue has grown by 9.34% in the past year. This is quite good.
ESE shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.93% yearly.
EPS 1Y (TTM)11.04%
EPS 3Y10.13%
EPS 5Y6.04%
EPS growth Q2Q3.33%
Revenue 1Y (TTM)9.34%
Revenue growth 3Y9.38%
Revenue growth 5Y6.93%
Revenue growth Q2Q6.24%

3.2 Future

The Earnings Per Share is expected to grow by 14.11% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.42% on average over the next years.
EPS Next Y14.51%
EPS Next 2Y14.11%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year8.2%
Revenue Next 2Y7.42%
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 stable: in the next years the growth will be about the same than in the last years.

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2

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 28.32, the valuation of ESE can be described as expensive.
ESE's Price/Earnings ratio is a bit more expensive when compared to the industry. ESE is more expensive than 60.47% of the companies in the same industry.
ESE's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.84.
The Price/Forward Earnings ratio is 21.87, which indicates a rather expensive current valuation of ESE.
ESE's Price/Forward Earnings is on the same level as the industry average.
ESE's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.35.
Industry RankSector Rank
PE 28.32
Fwd PE 21.87

4.2 Price Multiples

ESE's Enterprise Value to EBITDA is on the same level as the industry average.
ESE's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 47.97
EV/EBITDA 15.68

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ESE does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of ESE may justify a higher PE ratio.
A more expensive valuation may be justified as ESE's earnings are expected to grow with 14.11% in the coming years.
PEG (NY)1.95
PEG (5Y)4.69
EPS Next 2Y14.11%
EPS Next 3YN/A

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3

5. Dividend

5.1 Amount

ESE has a yearly dividend return of 0.31%, which is pretty low.
Compared to an average industry Dividend Yield of 1.72, ESE has a dividend in line with its industry peers.
With a Dividend Yield of 0.31, ESE pays less dividend than the S&P500 average, which is at 2.41.
Industry RankSector Rank
Dividend Yield 0.31%

5.2 History

ESE has been paying a dividend for at least 10 years, so it has a reliable track record.
ESE has decreased its dividend in the last 3 years.
Dividend Growth(5Y)0%
Div Incr Years0
Div Non Decr Years2

5.3 Sustainability

8.89% of the earnings are spent on dividend by ESE. This is a low number and sustainable payout ratio.
DP8.89%
EPS Next 2Y14.11%
EPS Next 3YN/A

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ESCO TECHNOLOGIES INC

NYSE:ESE (4/26/2024, 7:04:00 PM)

After market: 105.34 0 (0%)

105.34

+1.06 (+1.02%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap2.72B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 0.31%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 28.32
Fwd PE 21.87
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.95
PEG (5Y)4.69
Profitability
Industry RankSector Rank
ROA 5.25%
ROE 8.06%
ROCE
ROIC
ROICexc
ROICexgc
OM 13.49%
PM (TTM) 9.6%
GM 39.3%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.55
Health
Industry RankSector Rank
Debt/Equity 0.15
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.98
Quick Ratio 1.31
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)11.04%
EPS 3Y10.13%
EPS 5Y
EPS growth Q2Q
EPS Next Y14.51%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)9.34%
Revenue growth 3Y9.38%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y