NYSE:ESE

Stock Analysis Report

Executive Summary

ESCO Technologies Inc. produces and supplies engineered products and systems for utility, industrial, aerospace, and commercial users worldwide.


Snowflake Analysis

Excellent balance sheet and slightly overvalued.


Similar Companies

Share Price & News

How has ESCO Technologies's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ESE's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

3.3%

ESE

9.2%

US Machinery

7.2%

US Market


1 Year Return

11.9%

ESE

-22.1%

US Machinery

-10.4%

US Market

Return vs Industry: ESE exceeded the US Machinery industry which returned -22.1% over the past year.

Return vs Market: ESE exceeded the US Market which returned -10.4% over the past year.


Shareholder returns

ESEIndustryMarket
7 Day3.3%9.2%7.2%
30 Day-15.8%-19.4%-12.6%
90 Day-17.2%-29.0%-19.4%
1 Year12.2%11.9%-19.8%-22.1%-8.5%-10.4%
3 Year34.7%32.9%0.6%-6.7%15.8%8.3%
5 Year105.8%100.0%22.3%6.8%35.8%21.0%

Price Volatility Vs. Market

How volatile is ESCO Technologies's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is ESCO Technologies undervalued compared to its fair value and its price relative to the market?

38.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ESE ($76.55) is trading below our estimate of fair value ($124.88)

Significantly Below Fair Value: ESE is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ESE is poor value based on its PE Ratio (26.7x) compared to the Machinery industry average (15.6x).

PE vs Market: ESE is poor value based on its PE Ratio (26.7x) compared to the US market (13.1x).


Price to Earnings Growth Ratio

PEG Ratio: ESE is poor value based on its PEG Ratio (18.6x)


Price to Book Ratio

PB vs Industry: ESE is overvalued based on its PB Ratio (2.2x) compared to the US Machinery industry average (1.6x).


Next Steps

Future Growth

How is ESCO Technologies forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

1.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ESE's forecast earnings growth (1.4% per year) is below the savings rate (1.7%).

Earnings vs Market: ESE's earnings (1.4% per year) are forecast to grow slower than the US market (12.2% per year).

High Growth Earnings: ESE's earnings are forecast to grow, but not significantly.

Revenue vs Market: ESE's revenue (0.8% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: ESE's revenue (0.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if ESE's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has ESCO Technologies performed over the past 5 years?

17.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ESE has high quality earnings.

Growing Profit Margin: ESE's current net profit margins (9.1%) are lower than last year (9.8%).


Past Earnings Growth Analysis

Earnings Trend: ESE's earnings have grown by 17.8% per year over the past 5 years.

Accelerating Growth: ESE's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ESE had negative earnings growth (-0.5%) over the past year, making it difficult to compare to the Machinery industry average (-2%).


Return on Equity

High ROE: ESE's Return on Equity (8.1%) is considered low.


Next Steps

Financial Health

How is ESCO Technologies's financial position?


Financial Position Analysis

Short Term Liabilities: ESE's short term assets ($498.3M) exceed its short term liabilities ($252.0M).

Long Term Liabilities: ESE's short term assets ($498.3M) exceed its long term liabilities ($264.0M).


Debt to Equity History and Analysis

Debt Level: ESE's debt to equity ratio (16.5%) is considered satisfactory.

Reducing Debt: ESE's debt to equity ratio has increased from 10.3% to 16.5% over the past 5 years.

Debt Coverage: ESE's debt is well covered by operating cash flow (66.1%).

Interest Coverage: ESE's interest payments on its debt are well covered by EBIT (12.5x coverage).


Balance Sheet

Inventory Level: ESE has a high level of physical assets or inventory.

Debt Coverage by Assets: ESE's debt is covered by short term assets (assets are 3.3x debt).


Next Steps

Dividend

What is ESCO Technologies's current dividend yield, its reliability and sustainability?

0.42%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ESE's dividend (0.42%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.95%).

High Dividend: ESE's dividend (0.42%) is low compared to the top 25% of dividend payers in the US market (5.4%).


Stability and Growth of Payments

Stable Dividend: ESE is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: ESE is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: ESE is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ESE's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

9.5yrs

Average management tenure


CEO

Vic Richey (62yo)

16.83s

Tenure

US$4,071,933

Compensation

Mr. Victor L. Richey, Jr., also known as Vic, has been the Chief Executive Officer and President at ESCO Technologies Inc. since April 2003 and October 2006 respectively. Mr. Richey serves as the President ...


CEO Compensation Analysis

Compensation vs Market: Vic's total compensation ($USD4.07M) is about average for companies of similar size in the US market ($USD4.58M).

Compensation vs Earnings: Vic's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Victor Richey
Chairman16.83yrsUS$4.07m1.01% $20.0m
Gary Muenster
Executive VP9yrsUS$2.23m0.71% $14.1m
Alyson Barclay
Senior VP20.42yrsUS$1.24m0.35% $6.9m
Kate Lowrey
Director of Investor Relationsno datano datano data
Bruce Butler
President of ETS-Lindgren Inc.2.25yrsno datano data
Antonio Gonzalez
President of VACCO Industriesno datano datano data
Bryan Sayler
Utility Solutions Group President & President of Doble Engineering Company2.25yrsno datano data
Sam Chapetta
Filtration Group President2.25yrsno datano data
Michael Dyson
President of Globe Composite Solutionsno datano datano data

9.5yrs

Average Tenure

59.5yo

Average Age

Experienced Management: ESE's management team is seasoned and experienced (9.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Victor Richey
Chairman16.83yrsUS$4.07m1.01% $20.0m
Gary Muenster
Executive VP9yrsUS$2.23m0.71% $14.1m
Robert Phillippy
Independent Director5.83yrsUS$229.98k0.011% $216.7k
Vinod Khilnani
Independent Director5.58yrsUS$234.98k0.078% $1.6m
James Stolze
Lead Director3.25yrsUS$271.65k0.085% $1.7m
Larry Solley
Independent Director21.17yrsUS$242.41k0.097% $1.9m
Leon Olivier
Independent Director5.83yrsUS$229.98k0.0035% $68.8k
Patrick Dewar
Independent Director2.25yrsUS$229.98kno data
Gloria Valdez
Additional Independent Director0.25yrno datano data

5.8yrs

Average Tenure

62yo

Average Age

Experienced Board: ESE's board of directors are considered experienced (5.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: ESE insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

ESCO Technologies Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ESCO Technologies Inc.
  • Ticker: ESE
  • Exchange: NYSE
  • Founded: 1990
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: US$1.989b
  • Shares outstanding: 25.99m
  • Website: https://www.escotechnologies.com

Number of Employees


Location

  • ESCO Technologies Inc.
  • 9900A Clayton Road
  • St. Louis
  • Missouri
  • 63124
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ESENYSE (New York Stock Exchange)YesCommon StockUSUSDOct 1990
ET7DB (Deutsche Boerse AG)YesCommon StockDEEUROct 1990
ET7BRSE (Berne Stock Exchange)YesCommon StockCHCHFOct 1990

Biography

ESCO Technologies Inc. produces and supplies engineered products and systems for utility, industrial, aerospace, and commercial users worldwide. The company operates in four segments: Filtration/Fluid Flow (Filtration), RF Shielding and Test (Test), Utility Solutions Group (USG), and Technical Packaging. The Filtration segment supplies filter elements, manifolds, assemblies, modules, indicators, custom and standard valves, filters, regulators, actuators, and other related components; elastomeric-based signature reduction solutions; and mission-critical bushings, pins, sleeves, and precision-tolerance machined components, as well as processing services. The Test segment designs and manufactures RF test and secure communication facilities, acoustic test enclosures, RF and magnetically shielded rooms, RF measurement systems, and broadcast and recording studios; and RF absorptive materials and filters, active compensation systems, antennas, antenna masts, turntables, electric and magnetic probes, RF test cells, proprietary measurement software, and other test accessories to perform various tests, as well as calibration for antennas and field probes, chamber certification, field surveys, customer training, and various product tests. The USG segment designs, manufactures, and delivers diagnostic testing solutions for electrical equipment comprising the electric power grid and enterprise management systems. The Technical Packaging segment offers thermoformed products and packaging materials for medical, pharmaceutical, retail, food, and electronic applications. The company distributes its products through a network of distributors, sales representatives, direct sales teams, and in-house sales personnel. ESCO Technologies Inc. was founded in 1990 and is headquartered in St. Louis, Missouri. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 01:00
End of Day Share Price2020/03/30 00:00
Earnings2019/12/31
Annual Earnings2019/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.