Ethan Allen (ETD) AI Stock Analysis

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Ethan Allen

(NYSE:ETD)

73Outperform

Ethan Allen's stock reflects a balanced outlook with strengths in profitability, low valuation metrics, and positive earnings call insights. Key challenges include revenue decline and cash flow pressures. The stock's moderate technical indicators and robust dividend yield add to its investment appeal, while proactive management strategies enhance future growth prospects despite current risks.

Ethan Allen (ETD) vs. S&P 500 (SPY)

Market Cap

$722.72M

Dividend Yield5.47%

Average Volume (3M)325.96K

Price to Earnings (P/E)12.0

Beta (1Y)0.62

Revenue Growth-11.10%

EPS Growth-23.77%

CountryUS

Employees3,318

SectorConsumer Cyclical

Sector Strength64

IndustryFurnishings, Fixtures & Appliances

Share Statistics

EPS (TTM)2.39

Shares Outstanding25,429,960

10 Day Avg. Volume258,139

30 Day Avg. Volume325,964

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.10

Price to Cash Flow (P/CF)11.60

P/FCF Ratio15.20

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$32.00

Price Target Upside12.60% Upside

Rating ConsensusHold

Number of Analyst Covering2

Ethan Allen Business Overview & Revenue Model

Company DescriptionEthan Allen Interiors Inc. operates as an interior design company, and manufacturer and retailer of home furnishings in the United States, Mexico, Honduras, and Canada. The company operates in two segments, Wholesale and Retail. Its products include case goods items, such as beds, dressers, armoires, tables, chairs, buffets, entertainment units, home office furniture, and wooden accents; upholstery items comprising sleepers, recliners and other motion furniture, chairs, ottomans, custom pillows, sofas, loveseats, cut fabrics, and leather; and home accent items consisting of window treatments and drapery hardware, wall decors, florals, lighting, clocks, mattresses, bedspreads, throws, pillows, decorative accents, area rugs, wall coverings, and home and garden furnishings. The company markets and sells its products under the Ethan Allen brand through home furnishing retail networks and independent retailers, as well as through ethanallen.com website. As of June 30, 2021, it operated a network of approximately 302 design centers. Ethan Allen Interiors Inc. was founded in 1932 and is headquartered in Danbury, Connecticut.

How the Company Makes MoneyEthan Allen makes money primarily through the sale of home furnishings and accessories via its retail design centers and online platform. The company's revenue model is driven by direct-to-consumer sales, which include custom design services to help customers personalize their home interiors. Ethan Allen also generates revenue through its manufacturing operations, as it owns and operates several manufacturing facilities, enabling control over production costs and quality. Key revenue streams include furniture sales, interior design services, and home decor products. The company benefits from its strong brand recognition, robust distribution network, and strategic partnerships with suppliers and designers, which contribute to its earnings.

Ethan Allen Financial Statement Overview

Summary

Ethan Allen presents a mixed financial picture. While profitability and balance sheet health are commendable, revenue decline and cash flow pressures pose challenges. The company exhibits strong operational efficiency with stable margins and low leverage, but needs to address revenue growth and enhance cash flow generation to maintain financial robustness.

Income Statement

Positive

Ethan Allen's income statement shows stable profitability with a gross profit margin of 60.75% and a net profit margin of 9.76% for TTM (Trailing-Twelve-Months). However, there's a notable revenue decline from $817.76M in 2022 to $626.65M in 2024 TTM, impacting the growth trajectory. The EBIT and EBITDA margins remain solid at 11.45% and 13.78% respectively, indicating efficient operational management.

Balance Sheet

Positive

The balance sheet is strong with a debt-to-equity ratio of 0.26, reflecting low leverage and a healthy equity position. The return on equity is 12.78% for TTM, showcasing decent profitability for shareholders. The equity ratio stands robust at 65.35%, indicating a solid financial structure with a high proportion of assets funded by equity.

Cash Flow

Positive

Cash flow analysis reveals a decline in free cash flow from $86.78M in 2023 to $57.03M in TTM 2024, reflecting reduced cash generation capability. The operating cash flow to net income ratio is favorable at 1.06, indicating effective cash conversion from profits. However, the free cash flow to net income ratio of 0.93 suggests some pressure on free cash flow generation relative to net income.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
626.65M	646.22M	791.38M	817.76M	685.17M	589.84M
	Gross Profit
380.79M	393.06M	480.37M	484.71M	393.11M	323.13M
	EBIT
71.75M	77.99M	137.20M	138.25M	77.28M	-8.25M
	EBITDA
92.37M	93.87M	149.09M	154.31M	93.67M	28.48M
	Net Income Common Stockholders
61.19M	63.82M	105.81M	103.28M	60.01M	8.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
73.95M	161.03M	172.71M	121.12M	104.60M	72.28M
	Total Assets
644.39M	744.92M	745.45M	719.89M	683.25M	622.79M
	Total Debt
203.24M	129.28M	130.35M	115.21M	125.31M	179.48M
	Net Debt
131.31M	59.57M	68.22M	5.29M	20.71M	107.20M
	Total Liabilities
355.84M	262.00M	274.45M	312.57M	331.83M	294.73M
	Stockholders Equity
288.55M	482.98M	471.03M	407.35M	351.44M	328.06M
Cash Flow		Free Cash Flow
64.87M	70.59M	86.78M	55.97M	117.88M	36.99M
	Operating Cash Flow
76.60M	80.19M	100.66M	69.36M	129.91M	52.70M
	Investing Cash Flow
-21.90M	-19.99M	-101.52M	-13.97M	-7.12M	-4.62M
	Financing Cash Flow
-51.70M	-52.33M	-47.59M	-49.00M	-90.99M	3.70M

Ethan Allen Technical Analysis

Technical Analysis Sentiment

Positive

Last Price28.42

Price Trends

50DMA

27.61

Positive

100DMA

28.25

Positive

200DMA

28.73

Negative

Market Momentum

MACD

-0.05

Negative

RSI

59.75

Neutral

STOCH

84.00

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ETD, the sentiment is Positive. The current price of 28.42 is above the 20-day moving average (MA) of 26.92, above the 50-day MA of 27.61, and below the 200-day MA of 28.73, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 59.75 is Neutral, neither overbought nor oversold. The STOCH value of 84.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ETD.

Ethan Allen Risk Analysis

Ethan Allen disclosed 27 risk factors in its most recent earnings report. Ethan Allen reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Ethan Allen Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ETD	73 Outperform	$722.72M	11.95	12.86%	5.47%	-11.10%	-23.77%
LZB	72 Outperform	$1.61B	13.21	12.40%	2.18%	1.81%	8.09%
TILE	69 Neutral	$1.10B	12.67	18.90%	0.21%	4.29%	95.04%
AMWD	65 Neutral	$863.67M	9.01	11.09%	―	-6.02%	-10.65%
Sector *	60 Neutral	$6.85B	11.57	3.09%	4.18%	2.37%	-21.38%
MLKN	52 Neutral	$1.11B	38.64	2.28%	4.57%	-2.68%	-56.16%
SNBR	44 Neutral	$158.85M	―	9.10%	―	-10.87%	-33.24%

* Consumer Cyclical Sector Average

Performance Comparison

ETD

Ethan Allen

28.42

1.48

5.49%

AMWD

American Woodmark

58.22

-34.70

-37.34%

MLKN

MillerKnoll, Inc.

16.44

-8.54

-34.19%

TILE

Interface

18.75

3.17

20.35%

LZB

La-Z-Boy Incorporated

38.95

6.50

20.03%

SNBR

Sleep Number

7.01

-7.17

-50.56%

Ethan Allen Earnings Call Summary

Earnings Call Date: Jan 29, 2025 | % Change Since: 0.82% | Next Earnings Date: May 5, 2025

Earnings Call Sentiment Neutral

The earnings call showed a strong performance with growth in orders and a solid financial standing, despite challenges like revenue decline, wildfires, and potential tariff concerns. The company's proactive approach in marketing and maintaining a strong balance sheet positions it well for future growth.

Highlights

Strong Financial Performance Despite Challenges

Ethan Allen reported consolidated net sales of $157.3 million, operating income of $18.2 million, and an operating margin of 11.5%. The company also achieved a gross margin of 60.3% and diluted EPS of $0.59, with strong operating cash flow and an increase in cash to $184.2 million.

Significant Growth in Retail and Wholesale Orders

Retail segment orders grew by 15.8%, while Wholesale segment orders increased by 14.3%, driven by promotional activity, strong financing programs, and heightened interest in home furnishings.

Improved Written Order and Backlog Positions

The quarter concluded with a strong December, aided by special promotions, with the Wholesale backlog at $57.7 million, up 5% from a year ago.

Strong Balance Sheet and No Debt

Ethan Allen ended the quarter with $184.2 million in cash and investments, no outstanding debt, and generated $11.6 million of cash from operating activities.

Increased Marketing Initiatives

Marketing spend increased by 15%, from 2% to 2.5% of sales, to attract new customers and leverage new forms of marketing.

Lowlights

Revenue Decline Compared to Previous Year

Consolidated net sales decreased from $167.3 million a year ago to $157.3 million, attributed to lower backlogs, fewer contract sales, and a lower delivered unit volume.

Impact of Wildfires and Weather

The wildfires in Southern California and challenging weather conditions in January affected operations and slowed sales.

Decrease in Adjusted Operating Margin

Adjusted operating margin decreased to 11.5% from 12.8% a year ago due to various factors despite improvements from pre-pandemic levels.

Potential Tariff Concerns

Exposure to potential tariffs on imports from Mexico, which represents approximately 25% of total manufacturing, poses a risk.

Company Guidance

During the Ethan Allen Fiscal 2025 Second Quarter Analyst Conference Call, the company reported consolidated net sales of $157.3 million, a gross margin of 60.3%, and an operating income of $18.2 million, resulting in an operating margin of 11.5%. The diluted EPS was $0.59, and they ended the quarter with $184.2 million in operating cash flow, an increase of $16.4 million from the previous year. Retail segment orders grew by 15.8%, while Wholesale segment orders increased by 14.3%. The Wholesale backlog totaled $57.7 million, a 5% increase year-over-year. The company's headcount was reduced by 6.9% compared to the previous year. Capital expenditures amounted to $3.8 million, and the Board approved a regular cash dividend of $0.39 per share, payable on February 26, 2025.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.