Fuel Tech, Inc. (NASDAQ: FTEK)

Sector: Industrials Industry: Pollution & Treatment Controls CIK: 0000846913
Market Cap 45.79 Mn
P/B 1.12
P/E -15.22
P/S 1.85
ROIC (Qtr) -10.31
Div Yield % 0.00
Rev 1y % (Qtr) -4.60
Total Debt (Qtr) 601,000.00
Debt/Equity (Qtr) 0.01
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About

Fuel Tech, Inc., often recognized by its stock symbol FTEK, operates in the technology sector with a primary focus on air pollution control, process optimization, water treatment, and advanced engineering services. The company's headquarters are located in Warrenville, Illinois. Fuel Tech's operations span across various sectors, including the electric utility, industrial, and municipal solid waste sectors. Their offerings are primarily centered around improving the efficiency, reliability, and environmental status of combustion units, which are...

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Investment thesis

Bull case

  • Strong operating cash flow of 2.94M provides robust 4.88x coverage of total debt 601000, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 13.68M provide 157.21x coverage of short-term debt 87000, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 45.49M provides 75.69x coverage of total debt 601000, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 2.64M exceeds capital expenditure of 293000 by 9.02x, indicating strong organic growth funding capability.
  • Long-term investments of 7.97M provide solid 15.50x coverage of long-term debt 514000, indicating strategic financial planning.

Bear case

  • Operating cash flow of 2.94M barely covers its investment activities of (1.29M), with a coverage ratio of -2.28, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (1.29M) provide weak support for R&D spending of 1.92M, which is -0.67x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • High receivables of 4.83M relative to inventory of 402000 (12.01 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating earnings of (2.94M) show weak coverage of depreciation charges of 687000, with a -4.28 ratio indicating high capital intensity and potential reinvestment needs.
  • Long-term investments of 7.97M represent a high 1.48x of fixed assets 5.38M, indicating potential overexposure to financial assets versus operational capabilities.

Segments Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Pollution & Treatment Controls
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 VLTO Veralto Corp 22.76 Bn 26.05 4.31 2.67 Bn
2 ZWS Zurn Elkay Water Solutions Corp 8.65 Bn 43.69 5.10 0.54 Bn
3 FSS Federal Signal Corp /De/ 7.21 Bn 168.93 10.04 0.24 Bn
4 CECO Ceco Environmental Corp 2.77 Bn 53.33 3.85 0.24 Bn
5 PCT PureCycle Technologies, Inc. 1.46 Bn -6.40 258.45 0.43 Bn
6 ERII Energy Recovery, Inc. 0.91 Bn 46.74 6.75 0.00 Bn
7 ADUR Aduro Clean Technologies Inc. 0.33 Bn -23.93 1,516.99 0.00 Bn
8 ARQ Arq, Inc. 0.13 Bn -34.10 1.13 0.03 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.75 3.33
EV to Cash from Ops. EV/CFO 12.20 -65.71
EV to Debt EV to Debt 59.60 136.79
EV to EBIT EV/EBIT -12.19 3.75
EV to EBITDA EV/EBITDA -9.72 8.77
EV to Free Cash Flow [EV/FCF] EV/FCF 13.56 2.21
EV to Market Cap EV to Market Cap 0.78 1.03
EV to Revenue EV/Rev 1.45 89.55
Price to Book Value [P/B] P/B 1.12 6.68
Price to Earnings [P/E] P/E -15.22 15.25
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.12
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 3.26
Dividend per Basic Share Div per Share (Qtr) 0.00 0.07
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.56
Interest Coverage Int. cover (Qtr) 0.00 -107.95
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 45.03 -82.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 11.43 79.04
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.42
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -408.12 -265.30
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -20.90 -75.61
EBIT Growth (1y) % EBIT 1y % (Qtr) -480.63 -272.40
EBT Growth (1y) % EBT 1y % (Qtr) -473.83 -325.95
EPS Growth (1y) % EPS 1y % (Qtr) -350.00 2,177.75
FCF Growth (1y) % FCF 1y % (Qtr) 231.25 -76.02
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -2.12 7.23
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.52 0.42
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 2.31 2.16
Current Ratio Curr Ratio (Qtr) 5.41 3.56
Debt to Equity Ratio Debt/Equity (Qtr) 0.01 0.60
Interest Cover Ratio Int Coverage (Qtr) 0.00 -107.95
Times Interest Earned Times Interest Earned (Qtr) 0.00 -107.95
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -9.10 -775.28
EBIT Margin % EBIT Margin % (Qtr) -11.89 -2,721.83
EBT Margin % EBT Margin % (Qtr) -11.89 -2,762.77
Gross Margin % Gross Margin % (Qtr) 46.10 -44.42
Net Profit Margin % Net Margin % (Qtr) -12.20 -2,763.74