EACO (EACO) AI Stock Analysis

• Market Cap: $447.22M
• Dividend Yield: N/A
• Average Volume (3M): 35.00
• Price to Earnings (P/E): 13.0
• Beta (1Y): -0.19
• Revenue Growth: 20.13%
• EPS Growth: 115.78%
• Country: US
• Employees: 627
• Sector: Technology
• Sector Strength: 88
• Industry: Technology Distributors
• EPS (TTM): 1.90
• Shares Outstanding: 4,861,590
• 10 Day Avg. Volume: 10
• 30 Day Avg. Volume: 35
• PEG Ratio: 0.10
• Price to Book (P/B): 2.46
• Price to Sales (P/S): 0.90
• P/FCF Ratio: 24.18
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 1.03
• Enterprise Value/Gross Profit: 3.40
• Enterprise Value/Ebitda: 9.58
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 80 Outperform
• Price Target: $93.00 ▲(25.68% Upside)

The score is driven primarily by strong financial performance—healthy margins, improved earnings, low leverage, and high ROE—partly offset by weaker and more volatile free cash flow and slower revenue growth. Technicals add moderate support with a positive longer-term trend and neutral momentum, while valuation looks attractive based on a low P/E.

Positive Factors

Conservative Balance Sheet

Very low leverage and a sizable equity base provide durable financial flexibility. Conservative capital structure supports investment in R&D, weathering demand cycles, and opportunistic M&A without stressing liquidity, improving long-term resilience.

Improving Profitability

Healthy gross and operating margins and a meaningful improvement in net income signal sustainable operational efficiency. Strong margins support reinvestment and buffer against pricing pressure, underpinning long-term cash generation if maintained.

Durable Revenue Links

Revenue tied to long-term client contracts and technology partnerships creates stickier demand and higher visibility. Embedded components in automotive and industrial supply chains increase switching costs and support steady multi-month to multi-year revenue streams.

Negative Factors

Slowing Revenue Growth

Revenue growth has decelerated to single digits, reducing the tailwind for margin expansion and ROE maintenance. Slower top-line expansion limits scale benefits and heightens reliance on price/mix improvements or cost cuts to sustain returns over the medium term.

Volatile Free Cash Flow

Earnings-to-cash conversion is inconsistent: recent FCF decline and a prior negative year indicate cash generation risk. Volatile free cash flow can constrain capex for product development, reduce buffer for downturns, and limit shareholder return options long-term.

Pressure on High Returns

High ROE (~22.9%) is notable but tied to prior growth and margins; with moderating revenue, sustaining those returns may prove difficult. Without renewed growth or structural margin gains, ROE could revert, affecting long-term investor returns and reinvestment capacity.

EACO Business Overview & Revenue Model

Company Description

EACO (EACO) is a dynamic company operating in the technology sector, specializing in innovative electronic components and systems. Focused on enhancing connectivity and efficiency, EACO provides a range of products including microcontrollers, sensors, and integrated circuits that cater to various industries such as automotive, consumer electronics, and industrial automation.

How the Company Makes Money

EACO generates revenue through multiple streams, primarily by selling its electronic components and systems to manufacturers and distributors in various sectors. The company's revenue model is largely based on direct sales, with significant income derived from long-term contracts with major clients in the automotive and industrial sectors. Additionally, EACO benefits from partnerships with technology firms that integrate its components into their products, further expanding its market reach. The company also invests in research and development to innovate new products, which enhances its competitive edge and drives additional sales.

EACO Financial Statement Overview

Summary

Strong profitability and balance sheet (solid margins, meaningfully improved net income vs FY2024, low leverage, and high ROE). Main weakness is cash flow quality: free cash flow has been volatile and declined in the latest TTM, alongside slowing revenue growth.

Income Statement

TTM (Trailing-Twelve-Months) revenue is $445.0M with modest growth (+3.98%), showing continued expansion but a clear slowdown versus prior years. Profitability is a strength: gross margin is ~30.4% and net margin is ~7.8%, with operating profitability also solid (operating profit margin ~10.4%). Net income improved meaningfully versus FY2024 ($34.7M TTM vs $14.95M), indicating better earnings power, though growth momentum is not as strong as earlier periods.

Balance Sheet

The balance sheet is conservatively levered, with low debt relative to equity (debt-to-equity ~0.08 in TTM) and sizable equity ($165.1M) supporting the asset base ($229.6M). Returns are strong, with return on equity at ~22.9% in TTM, indicating effective use of shareholder capital. The main watch item is not leverage but sustaining these high returns as revenue growth has moderated.

Cash Flow

Cash generation is positive but less consistent than earnings. TTM operating cash flow is $13.0M and free cash flow is $10.7M, but free cash flow declined sharply versus the prior year (TTM free cash flow growth -25.4%). Free cash flow still covers most of net income (about 82% in TTM), which is supportive, yet cash conversion remains a key weakness given the volatility seen recently (including a negative free cash flow year in FY2024).

Breakdown	TTM	Aug 2025	Aug 2024	Aug 2023	Aug 2022	Aug 2021
Income Statement
Total Revenue	444.96M	427.93M	356.23M	319.40M	292.56M	237.96M
Gross Profit	135.28M	128.71M	106.21M	92.42M	83.50M	60.78M
EBITDA	48.05M	44.79M	23.15M	28.88M	30.81M	13.43M
Net Income	34.67M	32.22M	14.95M	21.18M	21.31M	8.39M
Balance Sheet
Total Assets	229.58M	236.79M	188.54M	162.24M	139.68M	110.39M
Cash, Cash Equivalents and Short-Term Investments	30.27M	37.74M	15.59M	35.79M	21.31M	8.20M
Total Debt	13.56M	11.36M	11.94M	14.64M	15.15M	15.89M
Total Liabilities	64.44M	80.94M	64.91M	53.52M	51.93M	43.26M
Stockholders Equity	165.14M	155.85M	123.63M	108.72M	87.75M	67.12M
Cash Flow
Free Cash Flow	10.67M	15.88M	-18.53M	12.46M	15.30M	7.87M
Operating Cash Flow	13.00M	17.17M	14.08M	13.42M	17.00M	8.82M
Investing Cash Flow	-11.51M	-16.44M	-20.45M	-23.82M	-2.24M	-7.04M
Financing Cash Flow	1.42M	5.80M	-1.37M	1.70M	-1.23M	-6.31M

EACO Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 74.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EACO, the sentiment is Positive. The current price of 74 is below the 20-day moving average (MA) of 89.20, below the 50-day MA of 84.90, and above the 200-day MA of 69.18, indicating a bullish trend. The MACD of 2.14 indicates Negative momentum. The RSI at 69.46 is Neutral, neither overbought nor oversold. The STOCH value of 100.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EACO.

EACO Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EACO	80 Outperform	$447.22M	13.01	23.11%	―	20.13%	115.78%
CNXN	74 Outperform	$1.57B	18.99	9.30%	1.02%	3.19%	-4.91%
CLMB	73 Outperform	$544.76M	25.42	21.27%	0.63%	51.09%	25.86%
SCSC	67 Neutral	$800.14M	11.46	8.16%	―	-4.88%	2.57%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
IZM	58 Neutral	$12.50M	9.29	7.76%	―	5.12%	―
TAIT	56 Neutral	$10.24M	-10.22	-4.12%	14.21%	―	―