Optical Cable Corp (OCC) stock analysis

P/E above its 5-year median

Optical Cable's P/E of 39.5 is above its own 5-year median of 7.0.

P/E above the industry

Optical Cable's P/E of 39.5 is above the Rolling, Drawing, and Extruding of Nonferrous median of 22.3.

EV/EBITDA below its 5-year median

Optical Cable's EV/EBITDA of 23.7 is below its 5-year median of 48.3.

P/B above the industry

Optical Cable's price-to-book of 6.87 is above the Rolling, Drawing, and Extruding of Nonferrous median of 3.17.

Trading above fair value

The share price of $11.45 is above our fair value estimate of $4.15.

Margin of safety under 20%

The price is 176% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 1.9% 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 acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 13.9% over the last twelve months; the Rolling, Drawing, and Extruding of Nonferrous median is 18.3%.

Company guidance

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

Gross margin improving

Gross margin was 34.3% over the last twelve months, against 31.4% a year earlier.

Return on equity under 15%

Return on equity was 15.6% over the last twelve months and averaged 3.3% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 21.6%, above the 10% that usually covers the cost of capital.

Return on equity below the industry

Optical Cable's return on equity of 15.6% is below the Rolling, Drawing, and Extruding of Nonferrous median of 15.6%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin above its 5-year average

Net margin was 3.1% over the last twelve months, against a 5-year average of 1.0%.

Net margin below the industry

Optical Cable's net margin of 3.1% is below the Rolling, Drawing, and Extruding of Nonferrous median of 5.2%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt coverage

Needs operating cash flow.

Interest not well covered

Operating income covers interest expense 3.8 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 2.17 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 5.53; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Optical Cable 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.