ESCO TECHNOLOGIES INC (ESE) Stock Fundamental Analysis
NYSE:ESE - New York Stock Exchange, Inc. - US2963151046 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to ESE. ESE was compared to 128 industry peers in the Machinery industry. ESE is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. ESE is valued quite expensively, but it does show have an excellent growth rating. These ratings could make ESE a good candidate for growth investing.
1. Profitability
1.1 Basic Checks
ESE had positive earnings in the past year.
In the past year ESE had a positive cash flow from operations.
ESE had positive earnings in each of the past 5 years.
In the past 5 years ESE always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of ESE (6.50%) is better than 67.97% of its industry peers.
The Return On Equity of ESE (9.24%) is comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 8.71%, ESE is in the better half of the industry, outperforming 61.72% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ESE is below the industry average of 10.30%.
The last Return On Invested Capital (8.71%) for ESE is above the 3 year average (7.18%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.5% | ||
| ROE | 9.24% | ||
| ROIC | 8.71% |
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
ESE's Profit Margin of 11.01% is fine compared to the rest of the industry. ESE outperforms 75.00% of its industry peers.
ESE's Profit Margin has declined in the last couple of years.
ESE has a Operating Margin of 15.54%. This is in the better half of the industry: ESE outperforms 74.22% of its industry peers.
In the last couple of years the Operating Margin of ESE has remained more or less at the same level.
ESE has a Gross Margin of 40.18%. This is in the better half of the industry: ESE outperforms 73.44% of its industry peers.
ESE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.54% | ||
| PM (TTM) | 11.01% | ||
| GM | 40.18% |
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
ESE has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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.
ESE has a worse debt/assets ratio than last year.
2.2 Solvency
ESE has an Altman-Z score of 7.20. This indicates that ESE is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ESE (7.20) is better than 88.28% of its industry peers.
ESE has a debt to FCF ratio of 0.88. This is a very positive value and a sign of high solvency as it would only need 0.88 years to pay back of all of its debts.
The Debt to FCF ratio of ESE (0.88) is better than 87.50% of its industry peers.
ESE has a Debt/Equity ratio of 0.07. This is a healthy value indicating a solid balance between debt and equity.
ESE has a better Debt to Equity ratio (0.07) than 79.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.88 | ||
| Altman-Z | 7.2 |
ROIC/WACC0.87
WACC10.01%
2.3 Liquidity
ESE has a Current Ratio of 2.05. This indicates that ESE is financially healthy and has no problem in meeting its short term obligations.
ESE has a Current ratio (2.05) which is comparable to the rest of the industry.
A Quick Ratio of 1.33 indicates that ESE should not have too much problems paying its short term obligations.
ESE has a Quick ratio (1.33) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.05 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 29.23% over the past year.
ESE shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.96% yearly.
Looking at the last year, ESE shows a quite strong growth in Revenue. The Revenue has grown by 8.41% in the last year.
The Revenue has been growing slightly by 7.18% on average over the past years.
EPS 1Y (TTM)29.23%
EPS 3Y16.26%
EPS 5Y5.96%
EPS Q2Q%43.62%
Revenue 1Y (TTM)8.41%
Revenue growth 3Y12.8%
Revenue growth 5Y7.18%
Sales Q2Q%6.58%
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 29.19% on average per year.
ESE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 16.47% yearly.
EPS Next Y46.51%
EPS Next 2Y29.19%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year17.1%
Revenue Next 2Y16.47%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
ESE is valuated quite expensively with a Price/Earnings ratio of 35.96.
ESE's Price/Earnings ratio is a bit more expensive when compared to the industry. ESE is more expensive than 65.63% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.25, ESE is valued a bit more expensive.
With a Price/Forward Earnings ratio of 25.98, ESE can be considered very expensive at the moment.
ESE's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. ESE is more expensive than 64.06% of the companies in the same industry.
ESE is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.15, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.96 | ||
| Fwd PE | 25.98 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ESE is valued a bit more expensive than 66.41% of the companies in the same industry.
ESE's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. ESE is more expensive than 63.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.09 | ||
| EV/EBITDA | 21.27 |
4.3 Compensation for Growth
ESE's 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 29.19% in the coming years.
PEG (NY)0.77
PEG (5Y)6.04
EPS Next 2Y29.19%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a yearly dividend of 0.18%, ESE is not a good candidate for dividend investing.
ESE's Dividend Yield is comparable with the industry average which is at 1.90.
Compared to an average S&P500 Dividend Yield of 2.40, ESE's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.18% |
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
6.99% of the earnings are spent on dividend by ESE. This is a low number and sustainable payout ratio.
The dividend of ESE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP6.99%
EPS Next 2Y29.19%
EPS Next 3YN/A
181.24
+0.07 (+0.04%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners99.47%
Inst Owner Change2.14%
Ins Owners0.31%
Ins Owner Change1.64%
Market Cap4.68B
Analysts80
Price Target173.91 (-4.04%)
Short Float %1.29%
Short Ratio1.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.18% |
Yearly Dividend0.32
Dividend Growth(5Y)0.01%
DP6.99%
Div Incr Years0
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)26.17%
Min EPS beat(2)6.72%
Max EPS beat(2)45.62%
EPS beat(4)3
Avg EPS beat(4)12.13%
Min EPS beat(4)-4.56%
Max EPS beat(4)45.62%
EPS beat(8)6
Avg EPS beat(8)7.45%
EPS beat(12)10
Avg EPS beat(12)7.38%
EPS beat(16)12
Avg EPS beat(16)4.94%
Revenue beat(2)1
Avg Revenue beat(2)2.23%
Min Revenue beat(2)-0.78%
Max Revenue beat(2)5.25%
Revenue beat(4)1
Avg Revenue beat(4)-0.01%
Min Revenue beat(4)-4.11%
Max Revenue beat(4)5.25%
Revenue beat(8)4
Avg Revenue beat(8)0.58%
Revenue beat(12)8
Avg Revenue beat(12)2.31%
Revenue beat(16)10
Avg Revenue beat(16)1.65%
PT rev (1m)0%
PT rev (3m)2.25%
EPS NQ rev (1m)7.59%
EPS NQ rev (3m)7.59%
EPS NY rev (1m)5.63%
EPS NY rev (3m)5.63%
Revenue NQ rev (1m)9.79%
Revenue NQ rev (3m)9.79%
Revenue NY rev (1m)5.85%
Revenue NY rev (3m)5.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.96 | ||
| Fwd PE | 25.98 | ||
| P/S | 4.37 | ||
| P/FCF | 39.09 | ||
| P/OCF | 28.09 | ||
| P/B | 3.66 | ||
| P/tB | 13.5 | ||
| EV/EBITDA | 21.27 |
EPS(TTM)5.04
EY2.78%
EPS(NY)6.98
Fwd EY3.85%
FCF(TTM)4.64
FCFY2.56%
OCF(TTM)6.45
OCFY3.56%
SpS41.51
BVpS49.47
TBVpS13.42
PEG (NY)0.77
PEG (5Y)6.04
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.5% | ||
| ROE | 9.24% | ||
| ROCE | 11.15% | ||
| ROIC | 8.71% | ||
| ROICexc | 9.06% | ||
| ROICexgc | 25.74% | ||
| OM | 15.54% | ||
| PM (TTM) | 11.01% | ||
| GM | 40.18% | ||
| FCFM | 11.17% |
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-Score7
Asset Turnover0.59
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.88 | ||
| Debt/EBITDA | 0.38 | ||
| Cap/Depr | 84.22% | ||
| Cap/Sales | 4.37% | ||
| Interest Coverage | 9.12 | ||
| Cash Conversion | 74.98% | ||
| Profit Quality | 101.46% | ||
| Current Ratio | 2.05 | ||
| Quick Ratio | 1.33 | ||
| Altman-Z | 7.2 |
F-Score7
WACC10.01%
ROIC/WACC0.87
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)29.23%
EPS 3Y16.26%
EPS 5Y5.96%
EPS Q2Q%43.62%
EPS Next Y46.51%
EPS Next 2Y29.19%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)8.41%
Revenue growth 3Y12.8%
Revenue growth 5Y7.18%
Sales Q2Q%6.58%
Revenue Next Year17.1%
Revenue Next 2Y16.47%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y21.06%
EBIT growth 3Y21.46%
EBIT growth 5Y6.59%
EBIT Next Year79.79%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y68.62%
FCF growth 3Y-3.27%
FCF growth 5Y1.81%
OCF growth 1Y55.97%
OCF growth 3Y1.19%
OCF growth 5Y3.95%