Adomani, Inc. – Value Analysis (NASDAQ:ADOM) : September 6, 2017

Capitalcube gives Adomani, Inc. a score of 25.

Our analysis is based on comparing Adomani, Inc. with the following peers – SolarEdge Technologies, Inc., Rexnord Corporation, China High Speed Transmission Equipment Group Co., Ltd. Unsponsored ADR and Altra Industrial Motion Corp. (SEDG-US, RXN-US, CHSTY-US and AIMC-US).

Investment Outlook

Adomani, Inc. has a fundamental score of 25 and has a relative valuation of OVERVALUED.

Fundamental Score

Access our research and ratings on Adomani, Inc.

Company Overview

  • ADOM-US has traded publicly for less than a year.
  • It currently trades at a Price/Book ratio of (176.68).
  • ADOM-US‘s earnings and EBITDA are both negative which suggest that P/E or Price/EBITDA are not meaningful to make this analysis between operating advantage (ROE) and growth expectations (as suggested by P/E or P/EBITDA).
  • ADOM-US‘s relatively low net margins and poor asset turns suggest a problematic operating strategy.
  • Changes in annual revenues (relative to peers) are better than the change in its earnings (relative to peers), implying the company is focused more on revenues.
  • ADOM-US‘s return on assets currently and over the past five years has trailed the peer median and suggests the company might be operationally challenged relative to its peers.
  • The company’s median gross margin and relatively low pre-tax margin suggest high operating costs versus peers.
  • The company’s capital investment program and to-date returns suggest that the company is likely making big bets on the future.
  • ADOM-US‘s operating performance may not allow it to raise additional debt.

Access our research and ratings on Adomani, Inc.

Leverage & Liquidity

ADOM-US would seem to have a hard time raising additional debt.

  • With debt at a relatively low 0.39% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 21.97%), and relatively tight interest coverage level of -8.30x, ADOM-US would have a hard time raising much additional debt. Thus, the company is classified as having Limited Flexibility when it comes to raising more debt.
  • Of the 4 chosen peers for the company, only 3 of the stocks have an outstanding debt balance. Companies with no debt include SEDG-US.

ADOM-US has maintained its Constrained profile from the recent year-end.

  • ADOM-US‘s interest coverage is greater than (but within one standard deviation of) its five-year average interest coverage of -528.28x.
  • Compared to 2016, interest coverage has remained relatively stable for both the company (-8.30x) and the peer median (2.96x).

Access the detailed analysis for Adomani, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
SolarEdge Technologies, Inc. 0 4.64 48.96 999
Rexnord Corporation 46.07 3.02 2.77 12.14
China High Speed Transmission Equipment Group Co., Ltd. Unsponsored ADR 58.38 1.3 2.96 16.69
Altra Industrial Motion Corp. 21.97 2.75 7.65 27.09
ADOMANI, Inc. 0.39 1.85 -8.3 -45.24
Peer Median 21.97 2.75 2.96 16.69
Best In Class 0.39 4.64 48.96 999

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Company Profile

Adomani, Inc. designs, manufacture, and installs advanced zero-emission electric drivetrain systems for fleet vehicles. It offers electric drive shaft, controller, batteries, and battery management system. The company was founded by Robert E. Williams in 2012 and is headquartered in Newport Beach, CA.

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