ESS Tech, Inc. (NYSE: GWH)

Sector: Industrials Industry: Electrical Equipment & Parts CIK: 0001819438
Market Cap 17.52 Mn
P/B -9.92
P/E -0.28
P/S 2.91
ROIC (Qtr) -942.86
Div Yield % 0.00
Rev 1y % (Qtr) -40.39
Total Debt (Qtr) 10.96 Mn
Debt/Equity (Qtr) -6.20
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About

Investment thesis

Bull case

  • Strong tangible asset base of 31.69M provides 2.89x coverage of total debt 10.96M, indicating robust asset backing and low credit risk.
  • Operating cash flow of (56.91M) fully covers other non-current liabilities (810000) by 70.25x, showing strong long-term stability.
  • Retained earnings of (821.84M) represent substantial 465.10x of equity (1.77M), indicating strong internal capital generation.
  • R&D investment of 7.63M represents healthy 1.15x of deferred revenue 6.63M, indicating strong future innovation pipeline.
  • Robust R&D investment of 7.63M at 0.32x of SG&A 24.21M demonstrates strong commitment to innovation and future growth.

Bear case

  • Operating cash flow of (56.91M) barely covers its investment activities of 38.21M, with a coverage ratio of -1.49, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of (56.91M) provides insufficient coverage of deferred revenue obligations of 6.63M, which is -8.59x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (56.91M) shows concerning coverage of stock compensation expenses of 6.98M, with a -8.15 ratio indicating potential earnings quality issues.
  • Free cash flow of (61.45M) provides weak coverage of capital expenditures of 4.54M, with a -13.52 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (62.48M) show weak coverage of depreciation charges of 7.46M, with a -8.38 ratio indicating high capital intensity and potential reinvestment needs.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Electrical Equipment & Parts
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 VRT Vertiv Holdings Co 93.00 Bn 69.78 9.09 3.16 Bn
2 BE Bloom Energy Corp 34.73 Bn -392.76 17.16 2.99 Bn
3 HUBB Hubbell Inc 27.97 Bn 31.52 4.78 2.33 Bn
4 NVT nVent Electric plc 19.43 Bn 76.81 8.40 1.56 Bn
5 AYI Acuity Inc. (De) 12.85 Bn 109.95 6.86 0.91 Bn
6 AEIS Advanced Energy Industries Inc 11.80 Bn 79.52 6.56 0.68 Bn
7 NVX NOVONIX Ltd 11.53 Bn -174.00 1,943.36 -
8 ENS EnerSys 6.79 Bn 21.71 1.82 1.18 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.46 3.49
EV to Cash from Ops. EV/CFO -0.29 9.10
EV to Debt EV to Debt 1.52 113.17
EV to EBIT EV/EBIT -0.27 -17.64
EV to EBITDA EV/EBITDA -0.30 3.56
EV to Free Cash Flow [EV/FCF] EV/FCF -0.27 39.13
EV to Market Cap EV to Market Cap 0.95 2.59
EV to Revenue EV/Rev 2.77 77.74
Price to Book Value [P/B] P/B -9.92 4.98
Price to Earnings [P/E] P/E -0.28 23.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -2.92
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 3.27
Dividend per Basic Share Div per Share (Qtr) 0.00 0.37
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.79
Interest Coverage Int. cover (Qtr) -137.02 -16.86
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 15.90 -135.37
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -68.35 92.17
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.22
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 21.59 -45.52
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 28.24 -56.26
EBIT Growth (1y) % EBIT 1y % (Qtr) 21.59 -64.20
EBT Growth (1y) % EBT 1y % (Qtr) 20.21 8.52
EPS Growth (1y) % EPS 1y % (Qtr) 23.65 13.91
FCF Growth (1y) % FCF 1y % (Qtr) 16.16 -66.58
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 21.48 15.53
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.17 0.63
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.10
Cash Ratio Cash Ratio (Qtr) 0.18 3.50
Current Ratio Curr Ratio (Qtr) 0.49 5.07
Debt to Equity Ratio Debt/Equity (Qtr) -6.20 0.41
Interest Cover Ratio Int Coverage (Qtr) -137.02 -16.86
Times Interest Earned Times Interest Earned (Qtr) -137.02 -16.86
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -913.90 -1,947.23
EBIT Margin % EBIT Margin % (Qtr) -1,037.70 -2,051.19
EBT Margin % EBT Margin % (Qtr) -1,045.27 -2,170.94
Gross Margin % Gross Margin % (Qtr) -517.50 2.02
Net Profit Margin % Net Margin % (Qtr) -1,045.30 -2,202.04