Q.E.P. Co. (QEPC) AI Stock Analysis

• Market Cap: $154.66M
• Dividend Yield: 2.16%
• Average Volume (3M): 1.18K
• Price to Earnings (P/E): 8.8
• Beta (1Y): 0.35
• Revenue Growth: -5.70%
• EPS Growth: 119.03%
• Country: US
• Employees: 371
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 1.08
• Shares Outstanding: 3,726,781
• 10 Day Avg. Volume: 954
• 30 Day Avg. Volume: 1,182
• PEG Ratio: -0.02
• Price to Book (P/B): 1.94
• Price to Sales (P/S): 0.66
• P/FCF Ratio: 19.67
• Enterprise Value/Market Cap: 0.75
• Enterprise Value/Revenue: 0.50
• Enterprise Value/Gross Profit: 1.39
• Enterprise Value/Ebitda: 5.63
• 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: 71 Outperform
• Price Target: $43.00 ▲(17.81% Upside)

The score is driven primarily by stable underlying financial health (low leverage and strong ROE) and favorable valuation (low P/E with a dividend). Technicals add support with the stock trading above key moving averages and positive momentum indicators, partially offset by declining revenue growth and weaker cash conversion.

Positive Factors

Low leverage and solid equity base

Very low leverage and a high equity ratio provide durable financial flexibility. This reduces refinancing risk in cyclical housing markets, supports capital returns and opportunistic M&A, and gives management room to invest in product development during downturns without stressing liquidity.

Strong return on equity and healthy gross margin

High ROE combined with a robust gross margin signals efficient operations and effective use of capital. These structural advantages support sustained profitability, provide pricing or cost-leverage buffers versus competitors, and enable reinvestment in brands and distribution over the medium term.

Improving free cash flow generation

Material FCF growth strengthens internal funding capacity for dividends, share repurchases, or small acquisitions without adding leverage. Over 2–6 months this improves financial optionality and resilience, allowing the company to support strategic investments even if revenue growth remains uneven.

Negative Factors

Declining revenue trend

Negative TTM revenue growth highlights persistent top-line pressure likely tied to housing and consumer uncertainty. Structurally weaker sales limit scale economies and constrain long-term margin expansion, making growth-dependent initiatives and long-range planning more challenging.

Low operating cash conversion

A low OCF-to-net-income ratio indicates earnings are not reliably converted to cash, exposing the company to working-capital swings and seasonal stress. Over months this can limit reinvestment or force reliance on financing, reducing agility in managing inventory and supplier terms.

Relatively thin net profit margin

A single-digit net margin leaves limited buffer against rising input costs or price competition. Structurally thin profitability constrains the company's ability to fund growth, absorb market shocks, or increase shareholder returns without eroding margins further.

Q.E.P. Co. Business Overview & Revenue Model

Company Description

Q.E.P. Co., Inc., together with its subsidiaries, manufactures, markets, and distributes a range of hardwood flooring, flooring installation tools, adhesives, and flooring related products for the professional installer markets. It operates through three segments: North America, Europe, and Australia/New Zealand. The company's product portfolio includes tile saws, blades, and accessories; tile cutters and accessories; hand tools; tile spacers; scrapers; trowels and floats; mixers and paddles; drill bits, hole saws, and jigsaw blades; scarpers and blades clean-up, repair, and maintenance products; knee pads and safety tools; installation kits; underlayment products; cement boards and masonry tools; and Brutus products. The company markets its products under the QEP, LASH, Roberts, Harris Flooring Group, Capitol, HarrisWood, Kraus, Naturally Aged Flooring, Vitrex, Homelux, Brutus, PRCI, Plasplugs, Tomecanic, Premix-Marbletite (PMM), Apple Creek, and Elastimentt brands. It sells its products to home improvement retail centers, specialty distribution outlets, and flooring dealers. Q.E.P. Co., Inc. was founded in 1979 and is based in Boca Raton, Florida.

How the Company Makes Money

Q.E.P. Co. generates revenue primarily through the sale of its flooring products and tools to retailers, contractors, and distributors. The company has several key revenue streams, including direct sales to major home improvement chains, online sales, and wholesale distribution. By maintaining strong relationships with retailers and providing a wide range of high-quality products, QEPC capitalizes on the growing demand for flooring solutions. Additionally, Q.E.P. Co. benefits from strategic partnerships with various suppliers and brands, enhancing its product offerings and market reach. The company's ability to adapt to market trends and consumer preferences also plays a significant role in its revenue generation.

Q.E.P. Co. Financial Statement Overview

Summary

Profitability and balance-sheet strength have improved (net margin rebounded to ~6.7%, gross margin mid-30s, debt-to-equity ~0.25–0.29, ROE ~19%), and free cash flow is positive. The primary drag is a multi-period revenue decline, including a very sharp reported TTM drop, plus mixed cash conversion (operating cash flow below net income).

Income Statement

Profitability has improved meaningfully versus the loss year in 2024, with annual net margin rebounding to ~6.7% in 2025 and stronger operating profitability than 2022–2023. Gross margin has also expanded to the mid-30% range in 2024–TTM (Trailing-Twelve-Months). The main concern is growth: revenue has been shrinking for multiple periods, including a steep decline in TTM (Trailing-Twelve-Months) (reported revenue growth around -82.8%), which raises questions about demand stability and the durability of current margins if volumes remain under pressure.

Balance Sheet

Leverage has improved substantially over time, with debt-to-equity dropping from elevated levels in 2022–2023 to a more conservative level in 2025 and TTM (Trailing-Twelve-Months) (~0.25–0.29). Equity has grown from 2024 to TTM (Trailing-Twelve-Months), and returns on equity are strong in 2025 and TTM (Trailing-Twelve-Months) (~19%), reflecting improved profitability. The key risk is that this healthier balance sheet is occurring alongside declining revenue, which could pressure returns if the top line does not stabilize.

Cash Flow

Free cash flow is positive in 2025 and TTM (Trailing-Twelve-Months), and TTM (Trailing-Twelve-Months) free cash flow growth is strong (off the prior period base). However, cash generation quality is mixed: operating cash flow is relatively low versus earnings in 2025 and TTM (Trailing-Twelve-Months) (operating cash flow to net income below 1), suggesting working-capital headwinds or less efficient cash conversion. Cash flow has also been volatile historically (negative operating cash flow in 2022 and near-breakeven in 2023), which limits the score despite recent improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	234.98M	243.83M	251.99M	433.66M	445.53M	387.60M
Gross Profit	83.67M	86.57M	82.00M	114.04M	120.75M	108.69M
EBITDA	20.67M	21.20M	15.96M	13.07M	18.27M	15.58M
Net Income	15.13M	16.25M	-4.71M	-63.00K	9.65M	6.90M
Balance Sheet
Total Assets	137.88M	138.27M	125.85M	196.01M	206.36M	187.72M
Cash, Cash Equivalents and Short-Term Investments	36.14M	28.55M	22.37M	5.00M	3.20M	10.90M
Total Debt	22.43M	24.09M	23.74M	69.90M	53.15M	51.69M
Total Liabilities	49.62M	55.34M	53.22M	118.17M	126.95M	116.80M
Stockholders Equity	88.27M	82.93M	72.63M	77.84M	79.40M	70.93M
Cash Flow
Free Cash Flow	8.71M	8.19M	25.67M	-5.07M	-12.13M	24.04M
Operating Cash Flow	12.45M	12.74M	29.48M	-72.00K	-11.04M	24.85M
Investing Cash Flow	-2.74M	312.00K	29.43M	-3.37M	1.01M	2.21M
Financing Cash Flow	-7.65M	-6.86M	-41.42M	5.30M	2.59M	-21.44M

Q.E.P. Co. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 36.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QEPC, the sentiment is Positive. The current price of 36.5 is below the 20-day moving average (MA) of 37.86, below the 50-day MA of 37.00, and below the 200-day MA of 37.74, indicating a bullish trend. The MACD of 0.53 indicates Negative momentum. The RSI at 66.24 is Neutral, neither overbought nor oversold. The STOCH value of 99.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for QEPC.

Q.E.P. Co. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QEPC	71 Outperform	$154.66M	8.76	19.31%	2.16%	-5.70%	119.03%
KMT	66 Neutral	$2.62B	28.31	7.36%	2.74%	-2.63%	-4.46%
SWK	66 Neutral	$12.67B	28.53	4.92%	4.42%	-1.40%	―
EML	64 Neutral	$110.21M	21.06	4.98%	2.24%	-8.54%	-68.18%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
HLMN	61 Neutral	$1.90B	51.01	3.11%	―	4.47%	345.07%
CVR	59 Neutral	$12.44M	-3.52	-16.20%	0.84%	-12.32%	0.17%