Cemtrex Inc (NASDAQ: CETX)

Sector: Technology Industry: Software - Infrastructure CIK: 0001435064
Market Cap 392,506.29
P/B 0.05
P/E -0.01
P/S 0.01
ROIC (Qtr) 3.45
Div Yield % 0.00
Rev 1y % (Qtr) 2.16
Total Debt (Qtr) 9.83 Mn
Debt/Equity (Qtr) 1.13

About

Cemtrex Inc., recognized by its ticker symbol CETX, is a prominent player in the multi-industry sector, having grown through calculated acquisitions and internal development. The company's operations span across several sectors, including security, industrial services, and corporate. This essay aims to provide an overview of Cemtrex's business activities, its industry position, and its competitive advantages. Cemtrex's Security segment, operating under the Vicon Industries brand, specializes in comprehensive security solutions designed to tackle...

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Price action

Investment thesis

Bull case

  • Strong tangible asset base of 44.08M provides 4.48x coverage of total debt 9.83M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 159315 provides strong 11.19x coverage of stock compensation 14236, indicating sustainable incentive practices.
  • Tangible assets of 44.08M provide exceptional 12.52x coverage of deferred revenue 3.52M, showing strong service capability backing.
  • Strong free cash flow of (1.74M) provides 29.05x coverage of acquisition spending (60000), indicating disciplined M&A strategy.
  • Robust tangible asset base of 44.08M provides 8.50x coverage of working capital 5.18M, indicating strong operational backing.

Bear case

  • Operating cash flow of 159315 barely covers its investment activities of (2.96M), with a coverage ratio of -0.05, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (2.96M) provide weak support for R&D spending of 2.35M, which is -1.26x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 6.35M provide limited coverage of acquisition spending of (60000), which is -105.78x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 159315 provides insufficient coverage of deferred revenue obligations of 3.52M, which is 0.05x, raising concerns about future service delivery capabilities.
  • High receivables of 13.54M relative to inventory of 6.58M (2.06 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,563.59 Bn 33.97 12.13 60.56 Bn
2 ORCL Oracle Corp 561.87 Bn 36.43 9.21 124.39 Bn
3 PLTR Palantir Technologies Inc. 413.65 Bn 377.64 106.17 0.24 Bn
4 PANW Palo Alto Networks Inc 126.45 Bn 113.19 13.23 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 116.42 Bn -370.56 25.50 0.82 Bn
6 SNPS Synopsys Inc 86.06 Bn 64.60 12.20 14.29 Bn
7 NET Cloudflare, Inc. 62.78 Bn -609.27 31.18 3.50 Bn
8 FTNT Fortinet, Inc. 60.83 Bn 32.47 9.28 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.10 2.69
EV to Cash from Ops. EV/CFO 31.27 28.91
EV to Debt EV to Debt 0.51 19.83
EV to EBIT EV/EBIT -0.20 -9.95
EV to EBITDA EV/EBITDA 1.78 6.82
EV to Free Cash Flow [EV/FCF] EV/FCF -2.86 26.09
EV to Market Cap EV to Market Cap 12.69 0.36
EV to Revenue EV/Rev 0.07 -9.34
Price to Book Value [P/B] P/B 0.05 3.88
Price to Earnings [P/E] P/E -0.01 -10.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -0.30
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.71
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.68
Interest Coverage Int. cover (Qtr) -11.97 -14.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -54.23 -408.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 17.10 226.39
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -419.15 25.27
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 190.18 47.48
EBIT Growth (1y) % EBIT 1y % (Qtr) -420.13 20.13
EBT Growth (1y) % EBT 1y % (Qtr) -289.59 14.16
EPS Growth (1y) % EPS 1y % (Qtr) 20.59 67.50
FCF Growth (1y) % FCF 1y % (Qtr) 66.37 296.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 17.51 46.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.60 0.67
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.27 1.22
Current Ratio Curr Ratio (Qtr) 1.22 2.59
Debt to Equity Ratio Debt/Equity (Qtr) 1.13 -0.96
Interest Cover Ratio Int Coverage (Qtr) -11.97 -14.20
Times Interest Earned Times Interest Earned (Qtr) -11.97 -14.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -30.00 -548.16
EBIT Margin % EBIT Margin % (Qtr) -33.03 -199.84
EBT Margin % EBT Margin % (Qtr) -35.79 -607.20
Gross Margin % Gross Margin % (Qtr) 42.20 51.88
Net Profit Margin % Net Margin % (Qtr) -36.80 -610.00