Escalade Inc (ESCA) stock analysis

P/E below its 5-year median

Escalade's P/E of 12.2 is below its own 5-year median of 15.0.

P/E below the industry

Escalade's P/E of 12.2 is below the Dolls, Toys, Games and Sporting and Athletic median of 18.1.

EV/EBITDA below its 5-year median

Escalade's EV/EBITDA of 7.7 is below its 5-year median of 8.7.

P/B above the industry

Escalade's price-to-book of 1.56 is above the Dolls, Toys, Games and Sporting and Athletic median of 1.53.

Trading below fair value

The share price of $21.29 is below our fair value estimate of $27.08.

Margin of safety over 20%

The price is 21.4% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -8.5% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -8.9% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 91.0% over the last twelve months, against a 5-year average of -12.0% a year.

Growing slower than the industry

Revenue grew 0.0% over the last twelve months; the Dolls, Toys, Games and Sporting and Athletic median is 1.9%.

Company guidance

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

Gross margin improving

Gross margin was 28.5% over the last twelve months, against 26.2% a year earlier.

Return on equity under 15%

Return on equity was 13.5% over the last twelve months and averaged 10.2% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 13.2%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Escalade's return on equity of 13.5% is above the Dolls, Toys, Games and Sporting and Athletic median of 0.3%.

Earnings shrank over 5 years

Net income shrank 12.0% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 10.0% over the last twelve months, against a 5-year average of 5.6%.

Net margin above the industry

Escalade's net margin of 10.0% is above the Dolls, Toys, Games and Sporting and Athletic median of 0.5%.

Low debt

Debt is 7.0% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 21.6% five years ago to 7.0%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 341% of total debt.

Interest well covered

Operating income covers interest expense 44.9 times.

Short-term assets cover short-term debts

Current assets are 3.01 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 5.97; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Escalade paid dividends worth 2.9% of the share price over the last twelve months.

Yield below Treasuries

The 2.9% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Escalade yields 2.9%.

Dividend stability

Fewer than five years of dividend history.

Covered by earnings

Dividends take 34.3% of net income.

Covered by free cash flow

Dividends take 20.2% of free cash flow.