Virco Mfg Corporation (VIRC) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA above its 5-year median

Virco Mfg's EV/EBITDA of 77.3 is above its 5-year median of 5.9.

P/B below the industry

Virco Mfg's price-to-book of 0.91 is below the Consumer discretionary median of 1.22.

Trading below fair value

The share price of $6.41 is below our fair value estimate of $9.30.

Margin of safety over 20%

The price is 31.1% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -4.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -46.1% a year over the last three fiscal years.

Earnings acceleration

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

Growing slower than the industry

Revenue grew -19.0% over the last twelve months; the Consumer discretionary median is 0.2%.

Company guidance

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

Gross margin slipping

Gross margin was 37.5% over the last twelve months, against 42.6% a year earlier.

Return on equity under 15%

Return on equity was -2.2% over the last twelve months and averaged 10.1% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was -3.4%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Virco Mfg's return on equity of -2.2% is below the Consumer discretionary median of -2.2%.

Earnings over 5 years

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

Net margin below its 5-year average

Net margin was -1.3% over the last twelve months, against a 5-year average of 3.3%.

Net margin below the industry

Virco Mfg's net margin of -1.3% is below the Consumer discretionary median of -1.1%.

Low debt

Debt is 3.4% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 19.3% five years ago to 3.4%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 325% of total debt.

Interest not well covered

Operating income covers interest expense -15.2 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 2.53 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.10; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Virco Mfg paid dividends worth 1.6% of the share price over the last twelve months.

Yield below Treasuries

The 1.6% 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; Virco Mfg yields 1.6%.

Dividend stability

Fewer than five years of dividend history.

Earnings cover

Needs dividends paid and net income.

Covered by free cash flow

Dividends take 17.9% of free cash flow.