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 has an excellent financial health rating, but there are some minor concerns on its profitability. 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.
ESE had a positive operating cash flow in the past year.
In the past 5 years ESE has always been profitable.
In the past 5 years ESE always reported a positive cash flow from operatings.
1.2 Ratios
ESE has a Return On Assets of 6.50%. This is in the better half of the industry: ESE outperforms 64.84% of its industry peers.
With a Return On Equity value of 9.24%, ESE perfoms like the industry average, outperforming 53.13% of the companies in the same industry.
ESE has a Return On Invested Capital of 8.71%. This is comparable to the rest of the industry: ESE outperforms 59.38% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ESE is below the industry average of 10.72%.
The 3 year average ROIC (7.18%) for ESE is below the current ROIC(8.71%), indicating increased profibility in the last year.
| 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
With a decent Profit Margin value of 11.01%, ESE is doing good in the industry, outperforming 75.00% of the companies in the same industry.
In the last couple of years the Profit Margin of ESE has declined.
Looking at the Operating Margin, with a value of 15.54%, ESE is in the better half of the industry, outperforming 74.22% of the companies in the same industry.
ESE's Operating Margin has been stable in the last couple of years.
With a decent Gross Margin value of 40.18%, ESE is doing good in the industry, outperforming 73.44% 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 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.
Compared to 1 year ago, ESE has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 7.40 indicates that ESE is not in any danger for bankruptcy at the moment.
ESE has a better Altman-Z score (7.40) than 89.06% 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.
Looking at the Debt to FCF ratio, with a value of 0.88, ESE belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
A Debt/Equity ratio of 0.07 indicates that ESE is not too dependend on debt financing.
The Debt to Equity ratio of ESE (0.07) is better than 78.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.88 | ||
| Altman-Z | 7.4 |
ROIC/WACC0.85
WACC10.23%
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.
Looking at the Current ratio, with a value of 2.05, ESE is in line with its industry, outperforming 50.78% of the companies in the same industry.
ESE has a Quick Ratio of 1.33. This is a normal value and indicates that ESE is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of ESE (1.33) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.05 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
ESE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 29.23%, which is quite impressive.
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 8.41%.
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)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
The Earnings Per Share is expected to grow by 29.77% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 15.18% on average over the next years. This is quite good.
EPS Next Y47.55%
EPS Next 2Y29.77%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year16.33%
Revenue Next 2Y15.18%
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
Based on the Price/Earnings ratio of 37.29, the valuation of ESE can be described as expensive.
Based on the Price/Earnings ratio, ESE is valued a bit more expensive than the industry average as 66.41% of the companies are valued more cheaply.
ESE's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 26.92.
Based on the Price/Forward Earnings ratio of 26.70, the valuation of ESE can be described as expensive.
ESE's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. ESE is more expensive than 64.84% of the companies in the same industry.
ESE's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 21.46.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.29 | ||
| Fwd PE | 26.7 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ESE is valued a bit more expensive than the industry average as 67.97% of the companies are valued more cheaply.
64.06% of the companies in the same industry are cheaper than ESE, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.54 | ||
| EV/EBITDA | 22.06 |
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.
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 29.77% in the coming years.
PEG (NY)0.78
PEG (5Y)6.26
EPS Next 2Y29.77%
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 1.94.
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 | 0.18% |
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.
ESE's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP6.99%
EPS Next 2Y29.77%
EPS Next 3YN/A
187.96
-1.3 (-0.69%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners98.67%
Inst Owner Change2.17%
Ins Owners0.31%
Ins Owner Change2.06%
Market Cap4.85B
Analysts80
Price Target191.25 (1.75%)
Short Float %1.11%
Short Ratio1.74
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)9.97%
PT rev (3m)12.44%
EPS NQ rev (1m)0%
EPS NQ rev (3m)7.59%
EPS NY rev (1m)0.71%
EPS NY rev (3m)6.39%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)9.79%
Revenue NY rev (1m)-0.66%
Revenue NY rev (3m)4.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.29 | ||
| Fwd PE | 26.7 | ||
| P/S | 4.53 | ||
| P/FCF | 40.54 | ||
| P/OCF | 29.13 | ||
| P/B | 3.8 | ||
| P/tB | 14.01 | ||
| EV/EBITDA | 22.06 |
EPS(TTM)5.04
EY2.68%
EPS(NY)7.04
Fwd EY3.75%
FCF(TTM)4.64
FCFY2.47%
OCF(TTM)6.45
OCFY3.43%
SpS41.51
BVpS49.47
TBVpS13.42
PEG (NY)0.78
PEG (5Y)6.26
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 | 7.4 |
F-Score7
WACC10.23%
ROIC/WACC0.85
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 Y47.55%
EPS Next 2Y29.77%
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 Year16.33%
Revenue Next 2Y15.18%
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%