Avalon Holdings Corp (NYSE: AWX)

Sector: Industrials Industry: Waste Management CIK: 0001061069
Market Cap 9.58 Mn
P/B 0.25
P/E 53.20
P/S 0.12
ROIC (Qtr) 2.44
Div Yield % 0.00
Rev 1y % (Qtr) 6.23
Total Debt (Qtr) 34.65 Mn
Debt/Equity (Qtr) 0.90

About

Avalon Holdings Corp, or AWX, operates in the waste management and golf course management industries. The company, established in 1998 as a subsidiary of American Waste Services, Inc., has its headquarters in Warren, Ohio. Avalon's main business activities revolve around waste management services and golf course operations. The waste management services encompass waste disposal brokerage and management, captive landfill management, and salt water injection well operations. These services are primarily offered to industrial, commercial, municipal,...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 13.25M provide 9.97x coverage of short-term debt 1.33M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 90.69M provides 2.62x coverage of total debt 34.65M, indicating robust asset backing and low credit risk.
  • Tangible assets of 90.69M provide exceptional 19.77x coverage of deferred revenue 4.59M, showing strong service capability backing.
  • Robust tangible asset base of 90.69M provides 329.77x coverage of working capital 275000, indicating strong operational backing.
  • Tangible assets of 90.69M provide robust 10.12x coverage of other current liabilities 8.96M, indicating strong asset backing.

Bear case

  • Operating cash flow of 2.93M barely covers its investment activities of (1.83M), with a coverage ratio of -1.60, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 2.93M provides insufficient coverage of deferred revenue obligations of 4.59M, which is 0.64x, raising concerns about future service delivery capabilities.
  • High receivables of 13.31M relative to inventory of 1.69M (7.90 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating earnings of 2.28M show weak coverage of depreciation charges of 3.82M, with a 0.60 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 1.09M represents just -1.17x of debt issuance (932000), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Waste Management
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 WM Waste Management Inc 99.66 Bn 99.17 7.44 23.36 Bn
2 RSG Republic Services, Inc. 73.30 Bn 99.83 7.97 13.27 Bn
3 WCN Waste Connections, Inc. 42.09 Bn 67.66 4.50 8.96 Bn
4 GFL GFL Environmental Inc. 16.72 Bn 6.39 3.34 5.71 Bn
5 CLH Clean Harbors Inc 13.63 Bn 35.09 2.29 3.02 Bn
6 CWST Casella Waste Systems Inc 6.36 Bn 417.00 3.54 1.23 Bn
7 NVRI ENVIRI Corp 1.48 Bn -8.91 0.66 1.67 Bn
8 MEG Montrose Environmental Group, Inc. 0.86 Bn -30.94 1.04 0.37 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.35 1.86
EV to Cash from Ops. EV/CFO 10.80 1.99
EV to Debt EV to Debt 0.91 141.65
EV to EBIT EV/EBIT 13.83 10.83
EV to EBITDA EV/EBITDA 5.62 -3.88
EV to Free Cash Flow [EV/FCF] EV/FCF 28.86 9.06
EV to Market Cap EV to Market Cap 3.30 0.66
EV to Revenue EV/Rev 0.40 8.81
Price to Book Value [P/B] P/B 0.25 4.15
Price to Earnings [P/E] P/E 53.20 33.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 4.52
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 7.28
Dividend per Basic Share Div per Share (Qtr) 0.00 0.36
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 6.04
Interest Coverage Int. cover (Qtr) 1.12 -114.06
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 23.20 -42.93
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 1.25 59.31
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.43
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -41.80 1,182.04
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -17.21 332.85
EBIT Growth (1y) % EBIT 1y % (Qtr) -28.02 973.21
EBT Growth (1y) % EBT 1y % (Qtr) -77.37 159.54
EPS Growth (1y) % EPS 1y % (Qtr) -79.17 85.89
FCF Growth (1y) % FCF 1y % (Qtr) -37.25 -19.83
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -8.19 10.50
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.88 0.60
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.67 0.60
Current Ratio Curr Ratio (Qtr) 1.01 1.57
Debt to Equity Ratio Debt/Equity (Qtr) 0.90 0.73
Interest Cover Ratio Int Coverage (Qtr) 1.12 -114.06
Times Interest Earned Times Interest Earned (Qtr) 1.12 -114.06
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 7.70 -42.95
EBIT Margin % EBIT Margin % (Qtr) 2.87 -56.49
EBT Margin % EBT Margin % (Qtr) 0.30 -61.58
Gross Margin % Gross Margin % (Qtr) 19.70 17.43
Net Profit Margin % Net Margin % (Qtr) 0.20 -71.04