Energy Services of America CORP (NASDAQ: ESOA)

Sector: Industrials Industry: Engineering & Construction CIK: 0001357971
Market Cap 243.23 Mn
P/B 4.01
P/E 109.00
P/S 0.57
ROIC (Qtr) 4.09
Div Yield % 0.85
Rev 1y % (Qtr) 13.38
Total Debt (Qtr) 63.96 Mn
Debt/Equity (Qtr) 1.06
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About

Energy Services of America Corporation (ESOA), a prominent player in the contractor and service industry, primarily operates in the mid-Atlantic and central regions of the United States. The company's services span across various industries, including natural gas, petroleum, water distribution, automotive, chemical, and power. ESOA's operations are divided into three main segments: Electrical, Mechanical, and General Contract Services; Gas and Petroleum Transmission Projects; and Gas and Water Distribution Services. The Electrical, Mechanical,...

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Investment thesis

Bull case

  • Strong tangible asset base of 186.63M provides 2.92x coverage of total debt 63.96M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 14.05M provides strong 133.64x coverage of stock compensation 105119, indicating sustainable incentive practices.
  • Tangible assets of 186.63M provide exceptional 6.02x coverage of deferred revenue 31.02M, showing strong service capability backing.
  • Robust free cash flow of 9.38M exceeds capital expenditure of 4.67M by 2.01x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 186.63M provides 4.60x coverage of working capital 40.53M, indicating strong operational backing.

Bear case

  • Operating cash flow of 14.05M barely covers its investment activities of (8.14M), with a coverage ratio of -1.73, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 14.05M provides thin coverage of dividend payments of (2.01M) with a -7 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 16.68M provide limited coverage of acquisition spending of (3.47M), which is -4.81x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 14.05M provides insufficient coverage of deferred revenue obligations of 31.02M, which is 0.45x, raising concerns about future service delivery capabilities.
  • Operating earnings of 7.11M show weak coverage of depreciation charges of 14.09M, with a 0.50 ratio indicating high capital intensity and potential reinvestment needs.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Engineering & Construction
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 PWR Quanta Services, Inc. 106.68 Bn 648.31 32.06 6.02 Bn
2 FER Ferrovial SE 55.08 Bn 200.50 6.30 -
3 FIX Comfort Systems Usa Inc 49.32 Bn 2,267.37 36.14 0.39 Bn
4 EME EMCOR Group, Inc. 37.37 Bn 40.34 2.63 0.42 Bn
5 MTZ Mastec Inc 20.82 Bn 62.89 1.51 2.77 Bn
6 APG APi Group Corp 18.43 Bn 118.16 2.41 3.05 Bn
7 J Jacobs Solutions Inc. 16.19 Bn 37.39 1.31 2.96 Bn
8 BLD TopBuild Corp 15.63 Bn 27.53 2.98 3.09 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.52 1.87
EV to Cash from Ops. EV/CFO 21.73 36.37
EV to Debt EV to Debt 4.77 14.13
EV to EBIT EV/EBIT 42.93 119.20
EV to EBITDA EV/EBITDA 14.15 40.20
EV to Free Cash Flow [EV/FCF] EV/FCF 32.55 95.14
EV to Market Cap EV to Market Cap 1.25 1.18
EV to Revenue EV/Rev 0.72 3.32
Price to Book Value [P/B] P/B 4.01 10.12
Price to Earnings [P/E] P/E 109.00 87.94
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.11 2.58
Dividend Payout Ratio % Div Payout % (Qtr) 92.30 28.61
Dividend per Basic Share Div per Share (Qtr) 0.12 0.25
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 21.39 8.70
Interest Coverage Int. cover (Qtr) 1.91 78.45
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 48.55 -168.16
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -18.03 652.12
Dividend Growth (1y) % Div 1y % (Qtr) 300.00 8.38
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -81.65 -61.29
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -21.11 15.12
EBIT Growth (1y) % EBIT 1y % (Qtr) -78.97 60.08
EBT Growth (1y) % EBT 1y % (Qtr) -89.30 12.78
EPS Growth (1y) % EPS 1y % (Qtr) -91.03 30.76
FCF Growth (1y) % FCF 1y % (Qtr) -39.94 -16.37
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -13.92 31.09
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 2.11 1.15
Cash Payout Ratio Cash Payout (Qtr) 0.11 0.05
Cash Ratio Cash Ratio (Qtr) 0.18 0.39
Current Ratio Curr Ratio (Qtr) 1.44 1.55
Debt to Equity Ratio Debt/Equity (Qtr) 1.06 0.90
Interest Cover Ratio Int Coverage (Qtr) 1.91 78.45
Times Interest Earned Times Interest Earned (Qtr) 1.91 78.45
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 5.00 0.42
EBIT Margin % EBIT Margin % (Qtr) 1.67 -3.70
EBT Margin % EBT Margin % (Qtr) 0.80 -6.01
Gross Margin % Gross Margin % (Qtr) 10.00 20.28
Net Profit Margin % Net Margin % (Qtr) 0.50 -7.25