McRae Industries (MCRAA) AI Stock Analysis

• Market Cap: $106.79M
• Dividend Yield: 2.86%
• Average Volume (3M): 11.00
• Price to Earnings (P/E): 26.0
• Beta (1Y): 0.09
• Revenue Growth: -0.78%
• EPS Growth: -37.05%
• Country: US
• Employees: 443
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Footwear & Accessories
• EPS (TTM): 0.42
• Shares Outstanding: 1,896,334
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 11
• PEG Ratio: -0.36
• Price to Book (P/B): 1.09
• Price to Sales (P/S): 0.96
• P/FCF Ratio: 34.67
• Enterprise Value/Market Cap: 0.66
• Enterprise Value/Revenue: 0.60
• Enterprise Value/Gross Profit: 2.15
• Enterprise Value/Ebitda: 8.76
• 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: 77 Outperform
• Price Target: $55.00 ▲(22.93% Upside)
• Action: Upgraded Date: 03/19/26
• Date: Action: Upgraded 03/19/26

The score is driven primarily by strong financial health (especially the very low-debt balance sheet) alongside improved TTM revenue and cash generation, tempered by historical volatility and margins below the 2024 peak. Technicals are supportive with price above major moving averages and positive MACD. Valuation is fair with a modest dividend yield.

Positive Factors

Very Low Leverage

Extremely low leverage provides durable financial flexibility: it cushions the company against demand shocks, supports continued investment in product durability and supply relationships, and preserves capacity to fund contracts or returns without reliance on external debt.

Stronger Cash Generation (TTM)

Improved trailing‑twelve‑month cash generation indicates the business can self-fund working capital and capex more reliably. Sustained FCF supports reinvestment in product quality, contract fulfillment and modest shareholder returns while reducing financing vulnerability over months.

Stable Niche Demand & Diversified Channels

Specialization in military, law enforcement and industrial footwear creates durable, mission‑critical demand and long sales cycles. Multiple channels and private‑label production reduce reliance on any single buyer, supporting steady orders and predictable revenue streams over the medium term.

Negative Factors

Margin Compression vs 2024 Peak

Material decline from prior peak margins suggests weaker pricing power or higher cost absorption. Persistently lower margins reduce reinvestment capacity and ROE, making the business more sensitive to cost inflation and intensifying competition over the next several quarters.

Revenue & Cash Flow Volatility

Historic swings in revenue and operating cash flow indicate earnings and working‑capital sensitivity to order cycles and seasonality. This volatility complicates planning, increases refinancing or inventory risks, and can strain margins during downturns over a multi‑month horizon.

Modest Scale

Relatively small operational scale can limit economies of scale, bargaining power with suppliers, and R&D or distribution investments. That structural constraint makes it harder to expand margins or absorb shocks compared with larger competitors over the coming quarters.

McRae Industries Business Overview & Revenue Model

Company Description

McRae Industries (MCRAA) is a diversified manufacturing company primarily engaged in the production of high-quality footwear and apparel, with a focus on the military, law enforcement, and industrial sectors. The company operates through two main segments: the wholesale distribution of its branded products and the production of private label goods. McRae Industries is known for its durable and functional designs, catering to the needs of professionals who require reliable and comfortable gear in demanding environments.

How the Company Makes Money

McRae Industries generates revenue through multiple streams, primarily from the sale of its footwear and apparel products. The company sells its goods through various channels, including direct sales to government entities, retail partnerships, and online platforms. Key revenue streams include wholesale orders from distributors and retailers, as well as contracts with military and law enforcement agencies for specialized footwear. Additionally, McRae Industries benefits from partnerships with other manufacturers and suppliers, which enhance its product offerings and market reach. The company's commitment to quality and its established brand reputation in niche markets contribute significantly to its earnings.

McRae Industries Financial Statement Overview

Summary

Strong balance sheet strength (very low leverage and sizable equity cushion) supports a higher score. TTM results show a sharp revenue rebound and improved free cash flow, but profitability is below the 2024 peak and results have been volatile across recent years.

Income Statement

TTM (Trailing-Twelve-Months) revenue rebounded strongly (+34.1%), and profitability remains positive with ~27.9% gross margin and ~6.0% net margin. However, margins and earnings power are well below the 2024 peak (net margin ~10.4% in 2024 and higher operating margins), and the prior annual period (2025) showed revenue contraction (-6.2%) and lower operating profitability—highlighting volatility in the recent trajectory.

Balance Sheet

The balance sheet is very conservatively financed, with low leverage across periods (TTM debt-to-equity ~0.013; total debt ~$1.3M vs. equity ~$102.7M). Equity has also grown meaningfully over time, providing a strong cushion. Return on equity is solid but not at prior highs (TTM ~6.95% vs. ~13.2% in 2024), suggesting profitability has normalized despite the strong capital position.

Cash Flow

Cash generation improved in TTM (Trailing-Twelve-Months), with operating cash flow ~$8.2M and free cash flow ~$7.1M, and free cash flow covering a large portion of net income (~0.87x). That said, cash flow has been choppy historically—most notably negative operating and free cash flow in 2022—and the step-down in 2025 cash generation versus earlier stronger years shows the business can swing meaningfully with working-capital and operating conditions.

Breakdown	TTM	Oct 2025	Oct 2024	Oct 2023	Oct 2022	Oct 2021
Income Statement
Total Revenue	117.76M	114.86M	122.40M	124.70M	124.83M	82.19M
Gross Profit	32.82M	33.04M	36.82M	33.89M	36.46M	22.00M
EBITDA	8.07M	11.02M	16.39M	11.77M	14.55M	4.89M
Net Income	7.08M	7.57M	12.79M	8.06M	10.20M	3.35M
Balance Sheet
Total Assets	109.93M	110.24M	106.54M	95.47M	91.04M	77.89M
Cash, Cash Equivalents and Short-Term Investments	44.11M	47.11M	38.07M	39.84M	25.86M	32.11M
Total Debt	1.31M	1.59M	2.14M	2.36M	0.00	0.00
Total Liabilities	7.21M	8.66M	9.48M	8.55M	9.79M	5.64M
Stockholders Equity	102.72M	101.58M	97.06M	86.92M	81.25M	72.25M
Cash Flow
Free Cash Flow	7.11M	3.19M	6.69M	15.93M	-4.97M	411.00K
Operating Cash Flow	8.19M	4.03M	7.55M	16.68M	-4.17M	766.00K
Investing Cash Flow	986.00K	9.91M	-2.51M	-11.27M	-2.81M	4.69M
Financing Cash Flow	-2.11M	-3.06M	-2.64M	-2.39M	-1.20M	-2.92M

McRae Industries Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 44.74
• 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 MCRAA, the sentiment is Neutral. The current price of 44.74 is below the 20-day moving average (MA) of 47.00, below the 50-day MA of 45.71, and below the 200-day MA of 45.47, indicating a neutral trend. The MACD of 0.55 indicates Positive momentum. The RSI at 46.74 is Neutral, neither overbought nor oversold. The STOCH value of 38.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MCRAA.

McRae Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCRAA	77 Outperform	$106.79M	25.96	7.13%	2.86%	-0.78%	-37.05%
WEYS	74 Outperform	$313.49M	12.56	9.35%	9.66%	-3.64%	-16.12%
RCKY	69 Neutral	$303.95M	9.84	8.67%	2.08%	4.13%	53.56%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
WWW	61 Neutral	$1.34B	15.53	26.62%	2.28%	3.61%	―
VRA	55 Neutral	$100.64M	-1.40	-35.03%	―	-29.74%	-405.24%
CAL	49 Neutral	$357.60M	―	3.39%	2.11%	-2.83%	-86.19%