Eastern Company (EML) AI Stock Analysis

• Market Cap: $145.68M
• Dividend Yield: 1.86%
• Average Volume (3M): 11.00K
• Price to Earnings (P/E): 10.1
• Beta (1Y): 1.05
• Revenue Growth: 2.06%
• EPS Growth: 47.43%
• Country: US
• Employees: 1,246
• Sector: Industrials
• Sector Strength: 86
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 0.32
• Shares Outstanding: 6,146,785
• 10 Day Avg. Volume: 17,494
• 30 Day Avg. Volume: 11,000
• PEG Ratio: -0.36
• Price to Book (P/B): 1.77
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 10.67
• Enterprise Value/Market Cap: 1.28
• Enterprise Value/Revenue: 0.17
• Enterprise Value/Gross Profit: 2.82
• Enterprise Value/Ebitda: 1.84
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 56 Neutral
• Price Target: $24.50 ▲(3.38%Upside)

Eastern Company's stock score reflects a mix of undervaluation and operational challenges. The most significant factor is the financial performance, which shows declining net income and inconsistent revenue growth. Technical analysis and valuation provide some positive aspects, but recent corporate events and earnings call insights highlight ongoing challenges and risks.

Eastern Company Business Overview & Revenue Model

Company Description

The Eastern Company designs, manufactures, and sells engineered solutions to industrial markets in the United States and internationally. It offers turnkey returnable packaging solutions that are used in the assembly process of vehicles, aircraft, and durable goods, as well as in the production process of plastic packaging products, packaged consumer goods, and pharmaceuticals; designs and manufactures blow mold tools and injection blow mold tooling products, and 2-step stretch blow molds and related components; and supplies blow molds and change parts to the food, beverage, healthcare, and chemical industry. It also offers rotary latches, compression latches, draw latches, hinges, camlocks, key switches, padlocks, and handles, as well as development and program management services for custom electromechanical and mechanical systems; designs and manufactures proprietary vision technology for original equipment manufacturers (OEMs) and aftermarket applications; and provides aftermarket components to the heavy-duty truck market. The Eastern Company was founded in 1858 and is based in Naugatuck, Connecticut.

How the Company Makes Money

Eastern Company makes money through a multi-faceted revenue model primarily driven by the sale of its manufactured products. The company's key revenue streams include direct sales to businesses and consumers, long-term supply contracts with major industrial clients, and strategic partnerships with key players in different sectors. Additionally, Eastern Company leverages its extensive distribution network to sell its products in various regions, thus expanding its market reach. The company also invests in research and development to innovate and improve its product offerings, which helps maintain a competitive edge in the market. Revenue is also supported by after-sales services and maintenance contracts that provide ongoing income.

Eastern Company Financial Statement Overview

Summary

Eastern Company faces challenges with declining net income and inconsistent revenue growth, impacting profitability. While leverage remains moderate, declining equity ratios pose a risk. Strong cash flow generation provides some resilience, but strategic improvements are needed to enhance financial health.

Income Statement

The company's income statement shows a significant drop in net income, leading to a negative net profit margin in the TTM period. Despite a positive gross profit margin, revenue growth has been inconsistent, with a recent decline. EBITDA and EBIT margins are positive but have not shown strong growth, indicating pressure on operational efficiency.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio, suggesting manageable leverage. However, the equity ratio has been declining, indicating a potential risk of over-leverage. Return on equity is negative in the TTM period, reflecting challenges in generating returns for shareholders.

Cash Flow

The cash flow statement reveals a substantial operating cash flow, but free cash flow growth has been inconsistent. The operating cash flow to net income ratio indicates strong cash generation relative to earnings, but the free cash flow to net income ratio is concerning due to negative net income in the TTM period.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Mar 2022	Mar 2021
Income Statement
Total Revenue	274.42M	272.75M	258.86M	279.27M	246.52M	197.61M
Gross Profit	65.95M	67.27M	61.77M	58.62M	56.77M	48.09M
EBITDA	23.36M	25.68M	23.26M	23.91M	28.06M	22.09M
Net Income	-8.53M	-8.53M	8.59M	12.30M	9.35M	5.41M
Balance Sheet
Total Assets	232.33M	235.31M	252.04M	261.52M	266.33M	275.53M
Cash, Cash Equivalents and Short-Term Investments	10.24M	16.06M	9.29M	10.19M	6.17M	16.13M
Total Debt	63.18M	56.64M	62.08M	76.40M	82.62M	101.50M
Total Liabilities	111.33M	2.14T	119.56M	134.91M	151.73M	171.22M
Stockholders Equity	121.00M	10.00T>	132.48M	126.61M	114.60M	104.31M
Cash Flow
Free Cash Flow	713.69B	10.84M	20.05M	7.10M	-5.74M	17.59M
Operating Cash Flow	8.35T	20.55M	26.48M	10.46M	-2.02M	20.69M
Investing Cash Flow	-7.28M	-8.47M	-5.43M	5.09M	12.62M	-9.11M
Financing Cash Flow	-6.04M	-4.82M	-22.90M	-11.78M	-20.27M	-13.18M

Eastern Company Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 23.70
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EML, the sentiment is Neutral. The current price of 23.7 is above the 20-day moving average (MA) of 23.21, above the 50-day MA of 22.57, and below the 200-day MA of 26.59, indicating a neutral trend. The MACD of 0.12 indicates Negative momentum. The RSI at 56.17 is Neutral, neither overbought nor oversold. The STOCH value of 80.55 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for EML.

Eastern Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RCMT	71 Outperform	$192.00M	14.96	42.38%	―	8.53%	-16.64%
ACU	70 Outperform	$165.39M	17.81	9.68%	1.47%	2.56%	-47.22%
HQI	68 Neutral	$145.18M	42.57	5.67%	2.31%	-7.66%	-34.08%
Sector *	59 Neutral	AU$1.63B	9.60	11.29%	3.70%	6.59%	5.93%
EML	56 Neutral	$145.68M	10.13	9.10%	1.86%	2.06%	47.43%
PESI	54 Neutral	$204.18M	―	-41.10%	―	-28.62%	-543.45%
TBI	50 Neutral	$198.60M	―	-36.98%	―	-16.76%	-1127.93%

Eastern Company Corporate Events

Eastern Company Announces Workforce Reduction to Cut Costs

On May 28, 2025, Eastern Company initiated a workforce reduction to cut operating costs and better align its workforce with business needs. This move is expected to decrease annual operating costs by approximately $4.0 million, with associated charges of around $1.0 million primarily recorded in the second quarter of 2025. The company acknowledges potential risks and uncertainties, including higher-than-anticipated costs and adverse impacts on development activities.

Eastern Company Announces New Board Committee Assignments

On May 1, 2025, The Eastern Company announced new assignments for its board committees. These changes involve key leadership roles across various committees, potentially impacting the company’s governance and strategic direction.