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 is valued quite expensive, but it does show an excellent growth. 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.
ESE had a positive operating cash flow in the past year.
In the past 5 years ESE has always been profitable.
Each year in the past 5 years ESE had a positive operating cash flow.
1.2 Ratios
The Return On Assets of ESE (6.14%) is better than 62.50% of its industry peers.
With a Return On Equity value of 8.91%, ESE perfoms like the industry average, outperforming 53.91% of the companies in the same industry.
The Return On Invested Capital of ESE (8.25%) 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 10.75%.
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
ESE has a better Profit Margin (10.44%) than 71.09% of its industry peers.
ESE's Profit Margin has declined in the last couple of years.
ESE has a Operating Margin of 14.80%. This is in the better half of the industry: ESE outperforms 70.31% of its industry peers.
ESE's Operating Margin has been stable in the last couple of years.
ESE's Gross Margin of 39.63% is fine compared to the rest of the industry. ESE outperforms 72.66% of its industry peers.
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 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 6.02 indicates that ESE is not in any danger for bankruptcy at the moment.
The Altman-Z score of ESE (6.02) is better than 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.
ESE's Debt to FCF ratio of 1.20 is amongst the best of the industry. ESE outperforms 82.81% of its industry peers.
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 78.13% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.09 | ||
| Debt/FCF | 1.2 | ||
| Altman-Z | 6.02 |
ROIC/WACC0.82
WACC10.09%
2.3 Liquidity
A Current Ratio of 2.04 indicates that ESE has no problem at all paying its short term obligations.
With a Current ratio value of 2.04, ESE perfoms like the industry average, outperforming 50.78% of the companies in the same industry.
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.
With a Quick ratio value of 1.35, ESE perfoms like the industry average, 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
ESE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 24.46%, 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.
The Revenue has grown by 8.96% in the past year. This is quite good.
The Revenue has been growing slightly by 7.18% on average over the past years.
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
ESE is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 26.33% yearly.
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 31.67, which means the current valuation is very expensive for ESE.
70.31% 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 27.63. ESE is around the same levels.
Based on the Price/Forward Earnings ratio of 21.98, the valuation of ESE can be described as rather expensive.
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 similar valuation than the S&P500 average which is at 20.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.67 | ||
| Fwd PE | 21.98 |
4.2 Price Multiples
64.84% of the companies in the same industry are cheaper than ESE, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ESE indicates a slightly more expensive valuation: ESE is more expensive than 60.94% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.13 | ||
| EV/EBITDA | 18.13 |
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)0.82
PEG (5Y)5.32
EPS Next 2Y26.33%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a yearly dividend of 0.21%, ESE is not a good candidate for dividend investing.
ESE's Dividend Yield is comparable with the industry average which is at 2.12.
With a Dividend Yield of 0.21, ESE pays less dividend than the S&P500 average, which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.21% |
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
7.48% 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.
DP7.48%
EPS Next 2Y26.33%
EPS Next 3YN/A
146.61
-4.55 (-3.01%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners99.47%
Inst Owner Change0.36%
Ins Owners0.31%
Ins Owner Change2.88%
Market Cap3.78B
Analysts80
Price Target173.91 (18.62%)
Short Float %0.66%
Short Ratio1.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.21% |
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)-0.69%
Revenue NY rev (3m)-2.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.67 | ||
| Fwd PE | 21.98 | ||
| P/S | 3.59 | ||
| P/FCF | 35.13 | ||
| P/OCF | 24.74 | ||
| P/B | 3.06 | ||
| P/tB | 12.27 | ||
| EV/EBITDA | 18.13 |
EPS(TTM)4.63
EY3.16%
EPS(NY)6.67
Fwd EY4.55%
FCF(TTM)4.17
FCFY2.85%
OCF(TTM)5.93
OCFY4.04%
SpS40.89
BVpS47.92
TBVpS11.95
PEG (NY)0.82
PEG (5Y)5.32
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 | 6.02 |
F-Score9
WACC10.09%
ROIC/WACC0.82
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%