Espey Mfg & Electronics (ESP) AI Stock Analysis

• Market Cap: $174.45M
• Dividend Yield: 3%
• Average Volume (3M): 23.26K
• Price to Earnings (P/E): 11.6
• Beta (1Y): 1.06
• Revenue Growth: 4.90%
• EPS Growth: 31.13%
• Country: US
• Employees: 148
• Sector: Industrials
• Sector Strength: 72
• Industry: Electrical Equipment & Parts
• EPS (TTM): 0.99
• Shares Outstanding: 2,958,843
• 10 Day Avg. Volume: 24,466
• 30 Day Avg. Volume: 23,264
• PEG Ratio: 0.43
• Price to Book (P/B): 2.33
• Price to Sales (P/S): 2.69
• P/FCF Ratio: 7.12
• Enterprise Value/Market Cap: 0.87
• Enterprise Value/Revenue: 3.67
• Enterprise Value/Gross Profit: 10.67
• Enterprise Value/Ebitda: 13.95
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 3.13
• Revenue Forecast (FY): $47.95M

• Rating: 82 Outperform
• Price Target: $68.00 ▲(16.68% Upside)
• Action: Reiterated Date: 02/12/26
• Date: Action: Reiterated 02/12/26

The score is driven primarily by strong financial quality (expanding margins, improving ROE, and a zero-debt balance sheet). Technicals are supportive with a clear uptrend, though momentum is stretched. Valuation is reasonable with a supportive dividend yield, but not a major tailwind.

Positive Factors

Margin Improvement

Sustained margin expansion indicates durable pricing power and improved manufacturing/cost control. Higher gross and net margins enhance cash generation and buffer against revenue volatility, supporting reinvestment, dividends, and higher sustainable ROE over the next several quarters.

Conservative Balance Sheet

Zero leverage and rising equity give the company financial flexibility to fund working capital, bid on engineered contracts, and sustain dividends without refinancing risk. This conservatism materially reduces insolvency risk and supports durable operations through cyclical downturns.

Engineered-to-Order Niche

A focus on ruggedized, engineered-to-order power solutions creates high technical barriers to entry and customer stickiness, enabling premium pricing and repeat programs. Serving defense/industrial end markets supports steady long-term demand and durable contract relationships.

Negative Factors

Revenue Momentum Weakness

Declining trailing revenue and negative reported growth weaken scale economics and raise the burden to sustain recent margin levels. If order intake does not recover, fixed-cost absorption and margin durability may be challenged, pressuring earnings momentum over months.

Falling Free Cash Flow

A sharp FCF drop signals working-capital pressure or higher reinvestment needs. Reduced cash conversion constrains discretionary uses like dividends, capex, or acquisitions and raises vulnerability to lumpy contract timing despite a zero-debt balance sheet.

Contract Timing / Customer Concentration

Reliance on defense and industrial contract awards produces lumpy, timing-sensitive revenue. This concentration makes short-to-medium term top-line forecasting and backlog conversion risky, which can magnify swings in revenue and margins across reporting periods.

Espey Mfg & Electronics Business Overview & Revenue Model

Company Description

Espey Mfg. & Electronics Corp., a power electronics design and original equipment manufacturing company, designs, manufactures, and tests electronic equipment primarily for use in military and industrial applications in the United States and internationally. The company's principal products include power supplies, power converters, filters, power transformers, magnetic components, power distribution equipment, UPS systems, antennas, and high-power radar systems for use in AC and DC locomotives, shipboard power, shipboard radar, airborne power, ground-based radar, and ground mobile power applications. It also provides various services comprising design and development to specification, build to print, design services, design studies, environmental testing services, metal fabrication, painting services, and development of automatic testing equipment. In addition, the company produces individual components, such as inductors, printed circuit boards, wires, and tests items. It serves industrial manufacturers and defense companies, the government of the United States, foreign governments, and foreign electronic equipment companies through its direct sales organization and outside sales representatives. The company was incorporated in 1928 and is based in Saratoga Springs, New York.

How the Company Makes Money

Espey makes money primarily by manufacturing and selling specialized power and electronic equipment, with revenues recognized from customer orders for its products and associated production work. Its core revenue stream is product sales, largely from engineered-to-order and custom-built power conversion and power distribution solutions (e.g., transformers, power supplies, converters, chargers, inverters/rectifiers), where pricing reflects specifications, ruggedization, compliance/testing requirements, and production complexity. A significant portion of demand historically comes from defense-related and industrial customers, so earnings are influenced by the timing and size of awarded contracts/orders, backlog conversion, and production schedules. The company’s profitability is driven by gross margin on manufactured products (materials, labor, overhead absorption), operational efficiency, and its ability to secure repeat programs and follow-on orders for installed systems. Specific information on material partnerships, channel/aftermarket mix, or customer concentration beyond general defense/industrial orientation is null.

Espey Mfg & Electronics Financial Statement Overview

Summary

Strong profitability improvement with TTM net margin ~23.4% and expanding gross margin (~34.4% TTM). Very conservative balance sheet with zero debt and rising equity supports resilience. Main risks are a TTM revenue decline (-3.5%) and a sharp TTM free cash flow drop (-42.4%), suggesting near-term slowdown and/or higher cash needs.

Income Statement

Profitability has improved materially over the last several years, with annual net margin rising from a loss in 2021 to ~15% in 2024 and ~18.5% in 2025, and TTM (Trailing-Twelve-Months) net margin reaching ~23.4%. Gross margin also expanded meaningfully (from ~12% in 2021 to ~28.9% in 2025 and ~34.4% TTM), indicating stronger pricing and/or cost control. The main drawback is growth momentum: revenue was up in recent annual periods, but TTM (Trailing-Twelve-Months) revenue declined (-3.5%), suggesting a near-term slowdown despite the stronger margins.

Balance Sheet

The balance sheet is very conservatively positioned with zero total debt across all periods provided, which materially lowers financial risk. Equity has grown alongside the asset base (stockholders’ equity rising from ~$30.3M in 2021 to ~$50.8M in 2025 and ~$53.2M TTM), supporting balance-sheet resilience. Returns on equity have also strengthened (from negative in 2021 to ~14.1% in 2024, ~16.0% in 2025, and ~19.1% TTM), though the rapid asset growth versus earlier years raises the bar for sustaining these returns going forward.

Cash Flow

Cash generation is solid in absolute dollars, with TTM (Trailing-Twelve-Months) operating cash flow of ~$17.1M and free cash flow of ~$11.7M, and free cash flow generally tracking net income reasonably well (about ~68% TTM). However, cash flow quality is somewhat mixed: TTM (Trailing-Twelve-Months) operating cash flow is lower than the most recent annual period ($20.99M in 2025), and TTM free cash flow declined sharply (-42.4%), pointing to higher reinvestment needs and/or working-capital pressure versus the prior year.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	41.13M	43.95M	38.74M	35.59M	32.10M	27.73M
Gross Profit	14.15M	12.68M	10.65M	8.05M	5.47M	3.36M
EBITDA	10.83M	10.18M	6.99M	4.78M	2.02M	93.67K
Net Income	9.61M	8.14M	5.82M	3.68M	1.27M	-181.54K
Balance Sheet
Total Assets	85.17M	79.12M	56.54M	47.50M	39.90M	37.98M
Cash, Cash Equivalents and Short-Term Investments	43.17M	43.58M	23.23M	14.71M	11.81M	9.89M
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	31.96M	28.27M	15.27M	11.62M	7.80M	7.65M
Stockholders Equity	53.21M	50.85M	41.27M	35.88M	32.10M	30.33M
Cash Flow
Free Cash Flow	11.70M	16.63M	5.43M	3.39M	1.92M	551.44K
Operating Cash Flow	17.13M	20.99M	10.60M	3.90M	2.22M	595.00K
Investing Cash Flow	-5.27M	-6.94M	-7.84M	-8.77M	-918.34K	2.01M
Financing Cash Flow	-2.13M	458.27K	-1.15M	-489.27K	0.00	-1.20M

Espey Mfg & Electronics Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 58.28
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESP, the sentiment is Positive. The current price of 58.28 is above the 20-day moving average (MA) of 57.66, above the 50-day MA of 52.53, and above the 200-day MA of 44.30, indicating a bullish trend. The MACD of 1.82 indicates Positive momentum. The RSI at 56.59 is Neutral, neither overbought nor oversold. The STOCH value of 67.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ESP.

Espey Mfg & Electronics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ESP	82 Outperform	$174.45M	11.56	19.61%	3.00%	4.90%	31.13%
ULBI	64 Neutral	$92.40M	-23.26	1.26%	―	12.94%	-81.09%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
RFIL	60 Neutral	$129.53M	1,110.19	0.22%	―	24.25%	―
IPWR	53 Neutral	$38.99M	-3.91	-74.44%	―	-69.65%	11.41%
FLUX	46 Neutral	$30.73M	10.40	-211.67%	―	2.14%	5.01%
DFLI	44 Neutral	$31.40M	-0.75	―	―	18.24%	24.49%

Espey Mfg & Electronics Corporate Events

Espey Mfg & Electronics Appoints New Audit Chair

On December 8, 2025, Espey Mfg. & Electronics Corp. announced the appointment of Nancy Patzwahl as the new Chair of the Audit Committee, effective December 5, 2025, succeeding Paul Corr, who remains a board member and Audit Committee member. Additionally, the company declared a regular quarterly dividend of $0.25 per share, payable on December 26, 2025, to shareholders of record on December 19, 2025.