Electro-Sensors, Inc.: Strong price momentum but will it sustain?

Electro-Sensors, Inc. relative valuation is UNDERVALUED and it has a fundamental analysis score of 47.

Our analysis is based on comparing Electro-Sensors, Inc. with the following peers – Schmitt Industries, Inc., Cognex Corporation, FLIR Systems, Inc., Danaher Corporation, Emerson Electric Co., Hurco Companies, Inc., Vishay Precision Group, Inc. and AMETEK, Inc. (SMIT-US, CGNX-US, FLIR-US, DHR-US, EMR-US, HURC-US, VPG-US and AME-US).

Electro-Sensors, Inc. has shown good performance overall, both over the last one year (at 24.90%) as well as over the last month (at 12.08%). Share price performance over the last month, though has been lower than that over the last year. But Electro-Sensors, Inc.’s stock has done better than its overall peer group whose performance was 7.48% over the last month.

Company Snapshot

  • Compared to peers, relative underperformance over the last year is in contrast with the more recent outperformance.
  • It trades at a lower Price/Book multiple (1.16) than its peer median (2.59).
  • The market expects faster earnings growth from ELSE-US than from its peers and also a turnaround in its current ROE.
  • ELSE-US has relatively low profit margins and median asset efficiency.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • Over the last five years, ELSE-US’s return on assets has declined from about median to less than the median among its peers suggesting that the company’s historical competitiveness in operations is slipping away.
  • Company appears to give away relatively high gross margins to relatively high operating costs suggesting a differentiated product portfolio with low pre-tax margins relative to peers.
  • Compared with the peers chosen, ELSE-US has had faster revenue growth in prior years and a current P/E ratio that suggests faster growth in the future suggesting superior growth expectations.
  • The company seems to be over-investing in a business with median returns.
  • ELSE-US currently does not have any debt.
  • Our analysis rates Electro-Sensors, Inc. as UNDERVALUED relative to its peers.

Share Price Performance

Compared to peers, relative underperformance over the last year is in contrast with the more recent outperformance.

ELSE-US’s share price performance of 24.90% over the last 12 months is below its peer median but its 30-day trend in share price performance of 12.08% is better than the peer median. This recent rising stock price may herald a change in relative share price performance.

Share Price Performance

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Leading, Fading, Lagging, Rising

Relative Valuation

Relative Valuation
Fundamental Score

Electro-Sensors, Inc.’s price of USD 4.32 is lower than CapitalCube’s implied price of USD 4.97. CapitalCube believes that at these levels, Electro-Sensors, Inc. is undervalued and has upside potential. Over the last 52 week period, the stock has fluctuated between USD 2.96 and USD 5.24.

Valuation & Peer Metrics

A complete list of valuation metrics is available on the company page.

Company Profile

Electro-Sensors, Inc. engages in manufacturing and selling industrial production monitoring and process control systems. The company was founded by James P. Slattery in 1965 and is headquartered in Minnetonka, MN.

Disclaimer

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