ESCO TECHNOLOGIES INC (ESE) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ESE - US2963151046 - Common Stock
223.89 USD
+1.97 (+0.89%)
Overall ESE gets a fundamental rating of 6 out of 10. We evaluated ESE against 132 industry peers in the Machinery industry. ESE scores excellent on profitability, but there are some minor concerns on its financial health. ESE is valued quite expensively, but it does show have an excellent growth rating. These ratings would make ESE suitable for growth investing!
1. Profitability
1.1 Basic Checks
- In the past year ESE was profitable.
- ESE had a positive operating cash flow in the past year.
- Each year in the past 5 years ESE has been profitable.
- In the past 5 years ESE always reported a positive cash flow from operatings.
1.2 Ratios
- With an excellent Return On Assets value of 12.41%, ESE belongs to the best of the industry, outperforming 87.88% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 19.42%, ESE belongs to the top of the industry, outperforming 86.36% of the companies in the same industry.
- ESE has a Return On Invested Capital of 7.45%. This is comparable to the rest of the industry: ESE outperforms 55.30% of its industry peers.
- ESE had an Average Return On Invested Capital over the past 3 years of 7.29%. This is below the industry average of 10.24%.
- The last Return On Invested Capital (7.45%) for ESE is above the 3 year average (7.29%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.41% | ||
| ROE | 19.42% | ||
| ROIC | 7.45% |
ROA(3y)7.82%
ROA(5y)6.49%
ROE(3y)11.94%
ROE(5y)9.98%
ROIC(3y)7.29%
ROIC(5y)6.63%
1.3 Margins
- The Profit Margin of ESE (25.76%) is better than 99.24% of its industry peers.
- ESE's Profit Margin has improved in the last couple of years.
- The Operating Margin of ESE (15.80%) is better than 73.48% of its industry peers.
- In the last couple of years the Operating Margin of ESE has grown nicely.
- ESE has a Gross Margin of 41.24%. This is in the better half of the industry: ESE outperforms 78.03% of its industry peers.
- In the last couple of years the Gross Margin of ESE has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.8% | ||
| PM (TTM) | 25.76% | ||
| GM | 41.24% |
OM growth 3Y6.52%
OM growth 5Y4.68%
PM growth 3Y41.72%
PM growth 5Y14.96%
GM growth 3Y2.83%
GM growth 5Y2.47%
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 more 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 is higher compared to a year ago.
2.2 Solvency
- An Altman-Z score of 5.58 indicates that ESE is not in any danger for bankruptcy at the moment.
- The Altman-Z score of ESE (5.58) is better than 79.55% of its industry peers.
- The Debt to FCF ratio of ESE is 1.07, which is an excellent value as it means it would take ESE, only 1.07 years of fcf income to pay off all of its debts.
- ESE's Debt to FCF ratio of 1.07 is amongst the best of the industry. ESE outperforms 87.88% of its industry peers.
- ESE has a Debt/Equity ratio of 0.12. This is a healthy value indicating a solid balance between debt and equity.
- ESE has a Debt to Equity ratio of 0.12. This is in the better half of the industry: ESE outperforms 75.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 1.07 | ||
| Altman-Z | 5.58 |
ROIC/WACC0.77
WACC9.71%
2.3 Liquidity
- ESE has a Current 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.
- ESE's Current ratio of 1.35 is on the low side compared to the rest of the industry. ESE is outperformed by 78.79% of its industry peers.
- ESE has a Quick Ratio of 1.35. This is a bad value and indicates that ESE is not financially healthy enough and could expect problems in meeting its short term obligations.
- The Quick ratio of ESE (0.93) is worse than 68.18% of its industry peers.
- The current and quick ratio evaluation for ESE is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 0.93 |
3. Growth
3.1 Past
- ESE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 51.67%, which is quite impressive.
- The Earnings Per Share has been growing by 18.01% on average over the past years. This is quite good.
- ESE shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.13%.
- ESE shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.44% yearly.
EPS 1Y (TTM)51.67%
EPS 3Y25.47%
EPS 5Y18.01%
EPS Q2Q%58.9%
Revenue 1Y (TTM)13.13%
Revenue growth 3Y8.5%
Revenue growth 5Y8.44%
Sales Q2Q%18.04%
3.2 Future
- ESE is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.97% yearly.
- ESE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.11% yearly.
EPS Next Y22.82%
EPS Next 2Y10.97%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year13.4%
Revenue Next 2Y10.11%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
- The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- ESE is valuated quite expensively with a Price/Earnings ratio of 35.31.
- ESE's Price/Earnings ratio is a bit more expensive when compared to the industry. ESE is more expensive than 63.64% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.25. ESE is valued slightly more expensive when compared to this.
- The Price/Forward Earnings ratio is 28.75, which means the current valuation is very expensive for ESE.
- Based on the Price/Forward Earnings ratio, ESE is valued a bit more expensive than the industry average as 60.61% of the companies are valued more cheaply.
- ESE's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.31 | ||
| Fwd PE | 28.75 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ESE indicates a slightly more expensive valuation: ESE is more expensive than 65.91% of the companies listed in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of ESE is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.5 | ||
| EV/EBITDA | 22.58 |
4.3 Compensation for Growth
- ESE's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- ESE has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.55
PEG (5Y)1.96
EPS Next 2Y10.97%
EPS Next 3YN/A
5. Dividend
5.1 Amount
- With a yearly dividend of 0.14%, ESE is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 1.01, ESE has a dividend in line with its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, ESE's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.14% |
5.2 History
- The dividend of ESE has a limited annual growth rate of 0.07%.
- 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)0.07%
Div Incr Years0
Div Non Decr Years3
5.3 Sustainability
- ESE pays out 2.76% 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.
DP2.76%
EPS Next 2Y10.97%
EPS Next 3YN/A
ESCO TECHNOLOGIES INC / ESE FAQ
Can you provide the ChartMill fundamental rating for ESCO TECHNOLOGIES INC?
ChartMill assigns a fundamental rating of 6 / 10 to ESE.
What is the valuation status of ESCO TECHNOLOGIES INC (ESE) stock?
ChartMill assigns a valuation rating of 2 / 10 to ESCO TECHNOLOGIES INC (ESE). This can be considered as Overvalued.
What is the profitability of ESE stock?
ESCO TECHNOLOGIES INC (ESE) has a profitability rating of 8 / 10.
Can you provide the PE and PB ratios for ESE stock?
The Price/Earnings (PE) ratio for ESCO TECHNOLOGIES INC (ESE) is 35.31 and the Price/Book (PB) ratio is 3.76.
What is the financial health of ESCO TECHNOLOGIES INC (ESE) stock?
The financial health rating of ESCO TECHNOLOGIES INC (ESE) is 6 / 10.