Envela (ELA) AI Stock Analysis

• Market Cap: $163.24M
• Dividend Yield: N/A
• Average Volume (3M): 20.53K
• Price to Earnings (P/E): 24.4
• Beta (1Y): 0.68
• Revenue Growth: 5.07%
• EPS Growth: -3.19%
• Country: US
• Employees: 309
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Luxury Goods
• EPS (TTM): 0.26
• Shares Outstanding: 25,993,074
• 10 Day Avg. Volume: 18,564
• 30 Day Avg. Volume: 20,532
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.82
• Price to Cash Flow (P/CF): 10.10
• P/FCF Ratio: 24.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $7.00
• Price Target Upside: 11.46% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Envela's overall stock score reflects its strong financial performance and operational efficiency, with growth in revenue and cash flow being significant positives. The technical analysis suggests stability, though with some potential for short-term volatility. While the valuation is on the higher side, it is in line with growth expectations, though lack of dividends might deter income investors. Overall, Envela shows a positive trajectory, but investors should monitor debt levels and market momentum.

Positive Factors

Business Expansion

An increased installed base of retail stores, ending the year at 12, should help build more predictability into the model and, with it, a higher valuation over time.

Financial Performance

Envela Corp reported strong financial results with a 27.2% increase in revenue, surpassing estimates.

Growth Prospects

Analyst has increased the price target for Envela Corp from $6 to $7, indicating confidence in the company's growth prospects.

Negative Factors

Product Sales

Gross margins decreased due to a greater proportion of lower-margin product sales, impacting overall profitability.

Profitability

Gross margins were negatively impacted by a higher mix of lower-margin scrap-grade precious metal sales and increased store opening expenses.

Envela Business Overview & Revenue Model

Company Description

Envela Corporation (ELA) operates as a holding company with a primary focus on the re-commerce and retail sectors. It owns subsidiaries that engage in the buying, recycling, and selling of precious metals, electronics, and other commercial goods. The company's core operations are facilitated through its subsidiaries, which include Dallas Gold & Silver Exchange and Echo Environmental, among others. These subsidiaries provide specialized services ranging from the sale of jewelry and rare coins to the recycling and refurbishing of electronic waste.

How the Company Makes Money

Envela Corporation generates revenue through its subsidiaries by purchasing undervalued or unwanted items such as jewelry, coins, and electronic goods, which are then either resold or recycled. The company's precious metals segment profits from the difference between buying prices and selling prices of gold, silver, and other valuable items. In the electronics recycling division, Envela earns money by recovering and selling precious metals from electronic waste as well as refurbishing and selling used electronics. Additionally, the company benefits from partnerships with businesses that supply a steady stream of goods to be recycled or resold, and it capitalizes on fluctuations in commodity prices to optimize profits.

Envela Financial Statement Overview

Summary

Envela's financial performance is stable, with a strong balance sheet and solid cash flow. Despite a slight revenue decline, the company maintains decent profitability and prudent financial leverage.

Income Statement

Envela's income statement shows a stable gross profit margin of 24.8% in the TTM period. However, revenue has declined slightly by 1.7% compared to the previous year. The net profit margin stands at 3.8%, indicating moderate profitability. The company maintains a healthy EBIT margin of 4.7% and an EBITDA margin of 5.8%, reflecting efficient operating performance despite revenue challenges.

Balance Sheet

The balance sheet reveals a strong equity position with an equity ratio of 66.0%. The debt-to-equity ratio is comfortably low at 0.36, indicating prudent financial leverage. Return on equity is a moderate 12.6%, showcasing decent profitability for shareholders.

Cash Flow

Cash flow analysis highlights a solid operating cash flow to net income ratio of 1.4, demonstrating strong cash generation capabilities. Free cash flow has grown by 35.6%, which is positive, though the free cash flow to net income ratio of 0.76 suggests room for improvement in translating profits into free cash.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
171.81M	171.67M	182.69M	140.97M	113.92M	82.02M
	Gross Profit
38.98M	41.66M	44.83M	31.22M	23.07M	16.26M
	EBIT
12.44M	8.76M	13.94M	9.50M	6.79M	3.24M
	EBITDA
14.08M	10.85M	15.40M	10.42M	7.52M	3.76M
	Net Income Common Stockholders
12.38M	7.15M	15.69M	10.05M	6.38M	2.78M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.45M	17.85M	17.17M	10.14M	9.22M	4.51M
	Total Assets
13.02M	73.47M	71.28M	59.27M	40.58M	27.00M
	Total Debt
0.00	19.30M	22.03M	26.18M	20.22M	13.26M
	Net Debt
-1.45M	1.45M	4.86M	16.04M	11.00M	8.75M
	Total Liabilities
4.60M	25.17M	27.96M	31.64M	23.00M	15.81M
	Stockholders Equity
8.41M	48.31M	43.32M	27.63M	17.58M	11.19M
Cash Flow		Free Cash Flow
6.05M	3.60M	9.75M	-333.65K	1.03M	-705.82K
	Operating Cash Flow
8.90M	5.84M	10.02M	2.81M	6.90M	-542.83K
	Investing Cash Flow
-4.17M	-1.76M	-229.34K	-4.88M	-7.96M	-6.04M
	Financing Cash Flow
1.07M	-3.40M	-2.76M	2.99M	5.77M	9.64M

Envela Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.28
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ELA, the sentiment is Positive. The current price of 6.28 is above the 20-day moving average (MA) of 6.02, above the 50-day MA of 6.24, and above the 200-day MA of 5.91, indicating a bullish trend. The MACD of -0.01 indicates Negative momentum. The RSI at 58.88 is Neutral, neither overbought nor oversold. The STOCH value of 82.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ELA.

Envela Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNR	74 Outperform	$3.94B	7.67	19.67%	0.81%	-13.20%	-51.56%
ELA	72 Outperform	$163.24M	24.35	13.39%	―	5.07%	-3.19%
CLH	70 Outperform	$10.79B	27.00	16.69%	―	8.89%	6.76%
GFL	65 Neutral	$26.36B	―	-10.23%	0.12%	4.61%	-2848.30%
Sector *	59 Neutral	$11.48B	10.33	-0.84%	4.02%	1.25%	-16.06%
RRC	56 Neutral	$8.02B	30.58	6.88%	0.99%	-7.57%	-69.25%
PESI	41 Neutral	$133.05M	―	-38.46%	―	-34.12%	-3803.38%