Elco (ELCO) AI Stock Analysis

• Market Cap: ₪4.44B
• Dividend Yield: 4.04%
• Average Volume (3M): 20.60K
• Price to Earnings (P/E): 71.6
• Beta (1Y): 1.82
• Revenue Growth: 11.99%
• EPS Growth: N/A
• Country: IL
• Employees: 23,850
• Sector: Services
• Sector Strength: N/A
• Industry: Conglomerates
• EPS (TTM): 148.50
• Shares Outstanding: 26,929,747
• 10 Day Avg. Volume: 24,920
• 30 Day Avg. Volume: 20,596
• PEG Ratio: 0.58
• Price to Book (P/B): 1.91
• Price to Sales (P/S): 0.20
• P/FCF Ratio: 182.84
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 52 Neutral
• Price Target: 16,463.00 ▼(-9.19% Downside)

The score is held back primarily by elevated financial risk (very high leverage and thin profitability) and a demanding valuation (P/E ~78.7). These are partly offset by constructive technical strength, with the stock trading above key moving averages and positive momentum indicators.

Positive Factors

Diversified End Markets

Elco's product mix serves automotive, telecommunications and industrial automation—a broad set of end markets that drives structural demand for connectors and control systems. This diversification reduces reliance on any single cyclical sector and supports steadier revenue over time.

Channel & Contract Structure

A multi-channel distribution model plus long-term contracts with major OEMs and distributors provides recurring revenue visibility and lowers customer concentration risk. Durable ties to large industrial clients improve predictability of order flow and support long-term planning.

Operating Cash Flow

Stable operating cash flow (~0.93B in recent periods) indicates core operations generate cash even as free cash flow fluctuates. Reliable OCF supports working capital, maintenance capex and operational resilience, enabling the business to navigate cyclicality and invest selectively.

Negative Factors

High Leverage

Total debt large relative to equity (TTM debt-to-equity ~5.9) materially constrains financial flexibility. With modest equity and thin profitability, high leverage raises refinancing and interest-rate risk and limits ability to absorb shocks or fund strategic initiatives without raising more capital.

Very Thin Profitability

Margins near 0.3% and ROE around 2.8% mean the business currently earns very little on sales and equity. Such minimal profit buffers make earnings fragile to input-cost increases or volume dips, restricting reinvestment capacity and prolonging the time needed to repair the balance sheet.

Negative & Volatile Free Cash Flow

Negative FCF in the trailing period (~-0.10B) after near-breakeven the prior year, combined with historically volatile cash generation, weakens the company's ability to pay down debt, fund growth or sustain distributions without external financing, increasing long-term financing risk.

Elco Business Overview & Revenue Model

Company Description

Elco Ltd. operates in the construction, infrastructure, consumer electronics, telecommunications, entertainment, and real estate sectors in Israel. The company is involved in the development, construction, operation, management, and maintenance of various projects; import, marketing, and sale of air conditioning and electronic home appliances; operation and management of multi-family properties; and content and distribution, leisure, and cinema businesses. It also markets, supplies, and distributes LPG, natural gas, and CNG to private households, as well as industrial, commercial, and transportation sectors. Elco Ltd. was incorporated in 1949 and is based in Tel Aviv-Yafo, Israel. Elco Ltd. is a subsidiary of G. Salkind Ltd.

How the Company Makes Money

Elco makes money primarily through the sale of its electronic components and systems to various industries. The company generates revenue by manufacturing and distributing products such as semiconductors, circuit boards, and other electronic components. Key revenue streams include direct sales to manufacturers in the automotive and telecommunications industries, as well as partnerships with consumer electronics companies. Elco may also engage in licensing agreements and collaborations with other technology firms to expand its product offerings and market reach, contributing to its overall earnings.

Elco Financial Statement Overview

Summary

Profitability has improved to a small TTM net profit and operating cash flow is solid, but net margins are very thin (~0.3%). Balance-sheet risk is the main drag with very high leverage (TTM debt-to-equity ~5.9) and low ROE (~2.8%), and free cash flow turned negative in TTM.

Income Statement

TTM (Trailing-Twelve-Months) revenue is up strongly versus the prior year (about +2.2%), and profitability has improved from losses in 2023–2024 to a small positive net profit in TTM. However, margins remain thin (TTM net margin ~0.3%), well below the healthier profitability seen in 2020–2022, indicating the earnings recovery is still fragile and sensitive to costs/volume.

Balance Sheet

Leverage is high and rising: total debt is large relative to equity (TTM debt-to-equity ~5.9), leaving limited balance-sheet flexibility. Equity is modest versus the asset base, and returns on equity are low in TTM (~2.8%) after negative ROE in 2023–2024, suggesting the company is not currently earning enough to comfortably support its leverage profile.

Cash Flow

Operating cash flow is solid and stable in the last two periods (TTM and 2024 ~0.93B), but free cash flow turned negative in TTM (about -0.10B) after being roughly breakeven in 2024, implying heavier investment or working-capital drag. Cash generation has also been volatile historically (including negative operating cash flow in 2021), which reduces confidence in consistency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.17B	20.61B	18.70B	18.70B	14.82B	10.97B
Gross Profit	3.27B	3.11B	2.73B	3.57B	2.70B	1.58B
EBITDA	1.83B	1.35B	1.01B	2.35B	1.98B	976.07M
Net Income	61.85M	-118.00M	-289.00M	429.54M	544.62M	284.05M
Balance Sheet
Total Assets	27.17B	26.05B	23.98B	22.85B	19.04B	11.67B
Cash, Cash Equivalents and Short-Term Investments	1.68B	1.80B	1.15B	1.33B	1.13B	1.40B
Total Debt	12.98B	12.38B	10.45B	9.34B	7.93B	3.57B
Total Liabilities	21.90B	20.93B	18.99B	17.40B	14.67B	8.65B
Stockholders Equity	2.19B	2.11B	2.25B	2.58B	2.06B	1.60B
Cash Flow
Free Cash Flow	-100.75M	22.00M	-561.91M	-234.67M	-610.50M	574.08M
Operating Cash Flow	933.67M	938.00M	437.48M	330.75M	-144.70M	916.10M
Investing Cash Flow	-1.01B	-1.32B	-1.24B	-945.40M	-1.24B	143.97M
Financing Cash Flow	74.47M	1.00B	624.80M	893.99M	1.12B	-578.17M

Elco Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 18130.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IL:ELCO, the sentiment is Negative. The current price of 18130 is above the 20-day moving average (MA) of 17444.00, above the 50-day MA of 17287.80, and above the 200-day MA of 17357.14, indicating a bearish trend. The MACD of -396.58 indicates Positive momentum. The RSI at 31.92 is Neutral, neither overbought nor oversold. The STOCH value of 27.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IL:ELCO.

Elco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TRPZ	70 Outperform	₪8.79B	133.09	―	0.46%	44.88%	21.45%
YHNF	66 Neutral	₪5.51B	29.33	―	2.33%	7.38%	-7.10%
BSEN	65 Neutral	₪6.98B	47.29	―	―	14.00%	20.33%
ISCN	59 Neutral	₪6.10B	120.73	―	0.45%	48.74%	-82.72%
ISHI	58 Neutral	₪4.39B	112.23	―	0.57%	10.92%	-24.52%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%
ELCO	52 Neutral	₪4.44B	71.58	―	4.04%	11.99%	―