NasdaqGS:TESS

Stock Analysis Report

Executive Summary

TESSCO Technologies Incorporated architects and delivers products and value chain solutions to support wireless systems in the United States.

Rewards

Earnings are forecast to grow 129.45% per year

Pays a reliable dividend of 7.1%

Risk Analysis

Dividend of 7.1% is not well covered by earnings

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Profit margins (0.1%) are lower than last year (0.8%)

+ 1 more risk


Snowflake Analysis

Average dividend payer with mediocre balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

0.4%

TESS

-3.2%

US Communications

0.03%

US Market


1 Year Return

-4.3%

TESS

-5.1%

US Communications

18.6%

US Market

Return vs Industry: TESS matched the US Communications industry which returned -5.1% over the past year.

Return vs Market: TESS underperformed the US Market which returned 18.6% over the past year.


Shareholder returns

TESSIndustryMarket
7 Day0.4%-3.2%0.03%
30 Day-8.2%-7.4%1.7%
90 Day-27.0%-8.4%5.7%
1 Year1.2%-4.3%-2.9%-5.1%21.1%18.6%
3 Year2.9%-12.4%37.5%28.7%45.6%36.2%
5 Year-47.3%-59.3%63.5%45.2%71.1%52.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

131.56x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TESS ($11.26) is trading above our estimate of fair value ($6.71)

Significantly Below Fair Value: TESS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: TESS is poor value based on its PE Ratio (131.6x) compared to the Communications industry average (20.9x).

PE vs Market: TESS is poor value based on its PE Ratio (131.6x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: TESS is poor value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: TESS is good value based on its PB Ratio (0.9x) compared to the US Communications industry average (1.8x).


Next Steps

Future Growth

How is TESSCO Technologies forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

129.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TESS's forecast earnings growth (129.4% per year) is above the savings rate (1.7%).

Earnings vs Market: TESS's earnings (129.4% per year) are forecast to grow faster than the US market (14.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TESS's revenue (2.3% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: TESS's revenue (2.3% 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 TESS's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has TESSCO Technologies performed over the past 5 years?

-27.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TESS has a large one-off loss of $488.0K impacting its September 29 2019 financial results.

Growing Profit Margin: TESS's current net profit margins (0.1%) are lower than last year (0.8%).


Past Earnings Growth Analysis

Earnings Trend: TESS's earnings have declined by -27.1% per year over the past 5 years.

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

Earnings vs Industry: TESS had negative earnings growth (-85.8%) over the past year, making it difficult to compare to the Communications industry average (17.3%).


Return on Equity

High ROE: TESS's Return on Equity (0.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is TESSCO Technologies's financial position?


Financial Position Analysis

Short Term Liabilities: TESS's short term assets ($185.0M) exceed its short term liabilities ($117.9M).

Long Term Liabilities: TESS's short term assets ($185.0M) exceed its long term liabilities ($12.2M).


Debt to Equity History and Analysis

Debt Level: TESS's debt to equity ratio (34%) is considered satisfactory.

Reducing Debt: TESS's debt to equity ratio has increased from 2% to 34% over the past 5 years.

Debt Coverage: TESS's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: TESS's interest payments on its debt are not well covered by EBIT (2.3x coverage).


Balance Sheet

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

Debt Coverage by Assets: TESS's debt is covered by short term assets (assets are 5.2x debt).


Next Steps

Dividend

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

7.10%

Current Dividend Yield


Dividend Yield vs Market

company7.1%marketbottom25%1.4%markettop25%3.7%industryaverage3.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: TESS's dividend (7.1%) is higher than the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: TESS's dividend (7.1%) is in the top 25% of dividend payers in the US market (3.7%)


Stability and Growth of Payments

Stable Dividend: TESS's dividends per share have been stable in the past 10 years.

Growing Dividend: TESS's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (934.7%), TESS's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of TESSCO Technologies's salary, the management and board of directors tenure and is there insider trading?

6.2yrs

Average management tenure


CEO

Sandip Mukerjee (56yo)

0.3yrs

Tenure

0

Mr. Sandip Mukerjee serves as President, Chief Executive Officer and Director of TESSCO Technologies Incorporated since August 20, 2019. Mr. Mukerjee served as President of Global Professional and Consulti ...


Management Age and Tenure

6.2yrs

Average Tenure

54yo

Average Age

Experienced Management: TESS's management team is seasoned and experienced (6.2 years average tenure).


Board Age and Tenure

19.5yrs

Average Tenure

69.5yo

Average Age

Experienced Board: TESS's board of directors are seasoned and experienced ( 19.5 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$94,01512 Sep 19
Charles Kriete
EntityIndividual
Shares6,027
Max PriceUS$15.85

Ownership Breakdown

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


Management Team

  • Bob Barnhill (75yo)

    Founder & Executive Chairman

    • Tenure: 26.1yrs
    • Compensation: US$258.70k
  • Douglas Rein (59yo)

    Senior Vice President of Performance Systems & Operations

    • Tenure: 20.4yrs
    • Compensation: US$545.75k
  • Aric Spitulnik (48yo)

    CFO, Senior VP & Corporate Secretary

    • Tenure: 6.2yrs
    • Compensation: US$477.96k
  • Ted Perez (45yo)

    Controller

    • Tenure: 6.2yrs
  • Cynthia King

    VP & Treasurer

    • Tenure: 0yrs
  • Liz Robinson (52yo)

    Senior Vice President of Retail Sales & Product Marketing

    • Tenure: 2.8yrs
    • Compensation: US$508.04k
  • Mary Smith

    VP of Sales & GM of Ventev

    • Tenure: 0yrs
  • Joe Cawley

    CIO & CTO

    • Tenure: 0yrs
  • Sandip Mukerjee (56yo)

    President

    • Tenure: 0.3yrs

Board Members

  • Paul Gaffney (52yo)

    Independent Director

    • Tenure: 1.5yrs
    • Compensation: US$69.81k
  • Bob Barnhill (75yo)

    Founder & Executive Chairman

    • Tenure: 26.1yrs
    • Compensation: US$258.70k
  • John Beletic (67yo)

    Lead Director

    • Tenure: 11.3yrs
    • Compensation: US$103.73k
  • Benn Konsynski (68yo)

    Independent Director

    • Tenure: 26.1yrs
    • Compensation: US$87.73k
  • Mort Zifferer (71yo)

    Independent Director

    • Tenure: 26.1yrs
    • Compensation: US$94.73k
  • Dennis Shaughnessy (72yo)

    Independent Director

    • Tenure: 30.9yrs
    • Compensation: US$92.73k
  • Jay Baitler (72yo)

    Independent Director

    • Tenure: 12.9yrs
    • Compensation: US$97.73k
  • Sandip Mukerjee (56yo)

    President

    • Tenure: 0.3yrs

Company Information

TESSCO Technologies Incorporated's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: TESSCO Technologies Incorporated
  • Ticker: TESS
  • Exchange: NasdaqGS
  • Founded: 1982
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: US$96.760m
  • Shares outstanding: 8.55m
  • Website: https://www.tessco.com

Number of Employees


Location

  • TESSCO Technologies Incorporated
  • 11126 McCormick Road
  • Hunt Valley
  • Maryland
  • 21031
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TESSNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDSep 1994

Biography

TESSCO Technologies Incorporated architects and delivers products and value chain solutions to support wireless systems in the United States. The company offers base station infrastructure products, includ ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/07 23:44
End of Day Share Price2019/12/06 00:00
Earnings2019/09/29
Annual Earnings2019/03/31


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.