Avalon Holdings Corp (AWX) stock analysis

P/E below its 5-year median

Avalon's P/E of 5.5 is below its own 5-year median of 13.2.

P/E below the industry

Avalon's P/E of 5.5 is below the Electric, Gas, and Sanitary Services median of 20.2.

EV/EBITDA below its 5-year median

Avalon's EV/EBITDA of 4.1 is below its 5-year median of 7.8.

P/B below the industry

Avalon's price-to-book of 0.27 is below the Electric, Gas, and Sanitary Services median of 3.97.

Trading below fair value

The share price of $2.80 is below our fair value estimate of $12.69.

Margin of safety over 20%

The price is 77.9% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 1.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings growth accelerating

Net income grew 999% over the last twelve months, against a 5-year average of 87.1% a year.

Growing faster than the industry

Revenue grew 5.8% over the last twelve months; the Electric, Gas, and Sanitary Services median is 5.5%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin improving

Gross margin was 21.6% over the last twelve months, against 19.7% a year earlier.

Return on equity under 15%

Return on equity was 5.0% over the last twelve months and averaged 0.7% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 5.8%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Avalon's return on equity of 5.0% is above the Electric, Gas, and Sanitary Services median of -16.5%.

Earnings grew over 5 years

Net income grew 87.1% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 2.3% over the last twelve months, against a 5-year average of 0.4%.

Net margin above the industry

Avalon's net margin of 2.3% is above the Electric, Gas, and Sanitary Services median of -6.7%.

High debt

Debt is 69.3% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 63.4% five years ago to 69.3%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 15.8% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 1.9 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.18 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 0.98; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Avalon has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.