Espey Mfg & Electronics (ESP) AI Stock Analysis

• Market Cap: $155.18M
• Dividend Yield: 3.85%
• Average Volume (3M): 15.75K
• Price to Earnings (P/E): 16.8
• Beta (1Y): 1.02
• Revenue Growth: 4.90%
• EPS Growth: 31.13%
• Country: US
• Employees: 148
• Sector: Industrials
• Sector Strength: 72
• Industry: Electrical Equipment & Parts
• EPS (TTM): 0.76
• Shares Outstanding: 2,935,093
• 10 Day Avg. Volume: 14,147
• 30 Day Avg. Volume: 15,748
• 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: 0.86
• Enterprise Value/Revenue: 3.12
• Enterprise Value/Gross Profit: 10.15
• Enterprise Value/Ebitda: 13.62
• 1Y Price Target: $80.00
• Price Target Upside: 51.31% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 3.13
• Revenue Forecast (FY): $47.50M

• Rating: 87 Outperform
• Price Target: $65.00 ▲(22.94% Upside)

The score is driven primarily by strong financial quality (high margins, rising free cash flow, and a debt-free balance sheet). Technicals are supportive with the stock trading above major moving averages and positive MACD, though momentum indicators are nearing stretched levels. Valuation is also constructive with a moderate P/E and an above-average dividend yield.

Positive Factors

High Profitability

Sustained high net and EBIT margins create structural earnings resilience. For a custom, engineered-products manufacturer, strong margins support reinvestment in tooling and engineering, fund working capital during contract timing swings, and provide a buffer against input-cost volatility over months.

Debt-Free Balance Sheet

Zero total debt materially lowers solvency and refinancing risk and increases strategic optionality. This financial conservatism lets management withstand contract timing variability, fund capital expenditures or selective buybacks, and prioritize long-term investments without near-term leverage constraints.

Strong Cash Conversion

Improving free cash flow and high earnings-to-cash conversion support durable internal funding for capex, product development, and shareholder distributions. Reliable cash generation reduces reliance on external financing and allows the company to execute multi-month operational plans despite lumpier order timing.

Negative Factors

Recent Revenue Softness

A TTM revenue decline versus the prior year signals weakening top-line momentum. Given the engineered-order business model, sustained softer revenue can limit fixed-cost absorption, reduce operating leverage, and constrain reinvestment or hiring plans over the next several quarters.

Working-Capital Strain

OCF running below revenue suggests timing mismatches in receivables, inventory, or payables. This can make cash flows lumpy, constrain the ability to fund growth initiatives without drawing on reserves, and raise the chance of short-term financing needs during multi-month contract cycles.

Customer/Contract Concentration

Heavy exposure to defense and industrial contracts creates lumpiness and dependence on award timing and government budgets. This concentration increases revenue volatility, complicates multi-quarter forecasting and backlog conversion, and can delay durable growth unless contract cadence stabilizes.

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

High-quality fundamentals supported by strong profitability (TTM net margin ~20%, EBIT margin ~22%), a pristine debt-free balance sheet, and improving free cash flow (TTM FCF up ~22%, ~80% of net income). Primary risk is near-term top-line softness as TTM revenue declined versus the prior annual period.

Income Statement

Profitability and margins have strengthened materially since 2021, with TTM (Trailing-Twelve-Months) net margin around 20% and strong operating profitability (EBIT margin ~22%). Revenue expanded steadily from 2022–2025, though TTM (Trailing-Twelve-Months) shows a modest revenue decline versus the prior annual period, signaling some near-term top-line softness. Overall, earnings quality is strong, but growth momentum has recently cooled.

Balance Sheet

The balance sheet is exceptionally conservative with zero total debt across all periods, providing high financial flexibility and low solvency risk. Equity has grown meaningfully alongside assets, and returns on equity improved to ~16% (FY2025) and ~18% in TTM (Trailing-Twelve-Months), indicating better capital productivity. The main limitation is that, without leverage, future growth depends more heavily on operating performance and cash generation rather than balance-sheet optimization.

Cash Flow

Cash generation is strong and improving: operating cash flow and free cash flow rose sharply, with TTM (Trailing-Twelve-Months) free cash flow up ~22% and free cash flow running at ~80% of net income (solid earnings-to-cash conversion). A watch item is that operating cash flow is less than revenue in recent periods (coverage ~0.75), implying working-capital or timing impacts, but overall cash flow strength supports reinvestment and resilience.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	42.60M	43.95M	38.74M	35.59M	32.10M	27.73M
Gross Profit	13.10M	12.68M	10.65M	8.05M	5.47M	3.36M
EBITDA	9.76M	10.18M	6.99M	4.78M	2.02M	93.67K
Net Income	8.71M	8.14M	5.82M	3.68M	1.27M	-181.54K
Balance Sheet
Total Assets	84.85M	79.12M	56.54M	47.50M	39.90M	37.98M
Cash, Cash Equivalents and Short-Term Investments	46.91M	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	33.87M	28.27M	15.27M	11.62M	7.80M	7.65M
Stockholders Equity	50.98M	50.85M	41.27M	35.88M	32.10M	30.33M
Cash Flow
Free Cash Flow	20.33M	16.63M	5.43M	3.39M	1.92M	551.44K
Operating Cash Flow	25.32M	20.99M	10.60M	3.90M	2.22M	595.00K
Investing Cash Flow	-6.74M	-6.94M	-7.84M	-8.77M	-918.34K	2.01M
Financing Cash Flow	-1.17M	458.27K	-1.15M	-489.27K	0.00	-1.20M

Espey Mfg & Electronics Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 52.87
• 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 52.87 is above the 20-day moving average (MA) of 50.87, above the 50-day MA of 45.70, and above the 200-day MA of 41.54, indicating a bullish trend. The MACD of 2.49 indicates Positive momentum. The RSI at 62.80 is Neutral, neither overbought nor oversold. The STOCH value of 55.48 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	87 Outperform	$155.18M	16.79	18.65%	3.85%	4.90%	31.13%
ULBI	64 Neutral	$106.22M	63.07	1.26%	―	12.94%	-81.09%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
RFIL	60 Neutral	$104.57M	1,831.67	0.22%	―	24.25%	―
IPWR	53 Neutral	$42.94M	-4.19	-74.44%	―	-69.65%	11.41%
DFLI	44 Neutral	$38.65M	-0.08	―	―	18.24%	24.49%
FLUX	42 Neutral	$28.17M	-2.88	―	―	2.14%	5.01%

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.