The Eastern Company
The Eastern Company Fundamental Analysis
The Eastern Company (EML) shows weak financial fundamentals with a PE ratio of 33.53, profit margin of 1.57%, and ROE of 3.06%. The company generates $0.2B in annual revenue with weak year-over-year growth of -8.72%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 23.7/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze EML's fundamental strength across five key dimensions:
Efficiency Score
WeakEML struggles to generate sufficient returns from assets.
Valuation Score
ModerateEML shows balanced valuation metrics.
Growth Score
WeakEML faces weak or negative growth trends.
Financial Health Score
ExcellentEML maintains a strong and stable balance sheet.
Profitability Score
WeakEML struggles to sustain strong margins.
Key Financial Metrics
Is EML Expensive or Cheap?
P/E Ratio
EML trades at 33.53 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, EML's PEG of 0.26 indicates potential undervaluation.
Price to Book
The market values The Eastern Company at 1.03 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.72 times EBITDA. This is generally considered low.
How Well Does EML Make Money?
Net Profit Margin
For every $100 in sales, The Eastern Company keeps $1.57 as profit after all expenses.
Operating Margin
Core operations generate 3.01 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $3.06 in profit for every $100 of shareholder equity.
ROA
The Eastern Company generates $1.76 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Eastern Company generates limited operating cash flow of $13.70M, signaling weaker underlying cash strength.
Free Cash Flow
The Eastern Company produces free cash flow of $9.74M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $1.62 in free cash annually.
FCF Yield
EML converts 7.74% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
33.53
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.26
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.03
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.52
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.43
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.52
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.03
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.04
vs 25 benchmark
How EML Stacks Against Its Sector Peers
| Metric | EML Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 33.53 | 26.09 | Worse (Expensive) |
| ROE | 3.06% | 1258.00% | Weak |
| Net Margin | 1.57% | -33493.00% (disorted) | Weak |
| Debt/Equity | 0.43 | 0.73 | Strong (Low Leverage) |
| Current Ratio | 3.52 | 10.37 | Strong Liquidity |
| ROA | 1.76% | -1482877.00% (disorted) | Weak |
EML outperforms its industry in 2 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Eastern Company's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
29.36%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
-2.82%
Industry Style: Cyclical, Value, Infrastructure
DecliningFCF CAGR
-56.00%
Industry Style: Cyclical, Value, Infrastructure
Declining