Envela Corp (NYSE: ELA)

Sector: Consumer Cyclical Industry: Luxury Goods CIK: 0000701719
Market Cap 337.21 Mn
P/B 5.52
P/E 33.05
P/S 1.61
ROIC (Qtr) 12.11
Div Yield % 0.00
Rev 1y % (Qtr) 22.37
Total Debt (Qtr) 22.96 Mn
Debt/Equity (Qtr) 0.38
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About

Investment thesis

Bull case

  • Strong operating cash flow of 9.87M provides robust 0.43x coverage of total debt 22.96M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 24.42M provide 5.10x coverage of short-term debt 4.79M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 83.73M provides 3.65x coverage of total debt 22.96M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 9.87M provides exceptional 22.97x coverage of interest expenses 429555, showing strong debt service capability.
  • Robust free cash flow of 8.33M exceeds capital expenditure of 1.54M by 5.40x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 9.87M barely covers its investment activities of (1.59M), with a coverage ratio of -6.22, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Free cash flow of 8.33M represents just -6.14x of debt issuance (1.36M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High depreciation of 4.21M relative to operating cash flow of 9.87M, which is 0.43x suggests significant maintenance capital requirements affecting free cash flow.
  • Operating cash flow of 9.87M is outpaced by equity issuance of (253687) (-38.90 ratio), indicating concerning reliance on equity markets for funding operations.
  • Tax assets of 0 provide limited offset against tax liabilities of 237729, which is 0x, indicating potential future cash flow pressure from tax obligations.

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Luxury Goods
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TPR Tapestry, Inc. 29.76 Bn 56.98 3.96 3.94 Bn
2 SIG Signet Jewelers Ltd 4.18 Bn 28.80 0.61 1.15 Bn
3 CPRI Capri Holdings Ltd 2.40 Bn -4.76 0.65 1.31 Bn
4 REAL TheRealReal, Inc. 1.22 Bn -17.03 1.84 0.47 Bn
5 LUXE LuxExperience B.V. 0.92 Bn 1.60 0.38 0.22 Bn
6 MOV Movado Group Inc 0.88 Bn 1,242.00 1.44 0.08 Bn
7 ELA Envela Corp 0.34 Bn 33.05 1.61 0.02 Bn
8 LANV Lanvin Group Holdings Ltd 0.18 Bn -0.84 0.52 -

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.65 1.99
EV to Cash from Ops. EV/CFO 33.66 -20.65
EV to Debt EV to Debt 14.46 5.26
EV to EBIT EV/EBIT 24.55 -18.61
EV to EBITDA EV/EBITDA 19.92 3.85
EV to Free Cash Flow [EV/FCF] EV/FCF 39.89 -11.08
EV to Market Cap EV to Market Cap 0.98 2.01
EV to Revenue EV/Rev 1.59 1.66
Price to Book Value [P/B] P/B 5.52 8.26
Price to Earnings [P/E] P/E 33.05 103.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.46
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -92.20
Dividend per Basic Share Div per Share (Qtr) 0.00 0.37
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 13.15
Interest Coverage Int. cover (Qtr) 31.50 65.47
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 55.17 19.93
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 37.59 324.42
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -2.57
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 54.65 113.88
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 47.27 358.60
EBIT Growth (1y) % EBIT 1y % (Qtr) 53.10 105.68
EBT Growth (1y) % EBT 1y % (Qtr) 56.21 83.10
EPS Growth (1y) % EPS 1y % (Qtr) 66.67 121.00
FCF Growth (1y) % FCF 1y % (Qtr) 54.64 -35.68
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 13.14 16.54
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 2.30 1.29
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.10
Cash Ratio Cash Ratio (Qtr) 2.13 0.83
Current Ratio Curr Ratio (Qtr) 5.19 2.29
Debt to Equity Ratio Debt/Equity (Qtr) 0.38 1.37
Interest Cover Ratio Int Coverage (Qtr) 31.50 65.47
Times Interest Earned Times Interest Earned (Qtr) 31.50 65.47
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 8.50 2.90
EBIT Margin % EBIT Margin % (Qtr) 6.48 -0.51
EBT Margin % EBT Margin % (Qtr) 6.27 -2.94
Gross Margin % Gross Margin % (Qtr) 23.30 48.43
Net Profit Margin % Net Margin % (Qtr) 4.90 -4.98