MIDDLEBY Corp (NASDAQ: MIDD)

Sector: Industrials Industry: Specialty Industrial Machinery CIK: 0000769520
Market Cap 7.64 Bn
P/B 2.60
P/E -37.77
P/S 1.97
ROIC (Qtr) -1.42
Div Yield % 0.00
Rev 1y % (Qtr) 4.17
Total Debt (Qtr) 2.07 Bn
Debt/Equity (Qtr) 0.70
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About

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Investment thesis

Bull case

  • Healthy cash reserves of 175.13M provide 4.16x coverage of short-term debt 42.11M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 679.21M provides strong 46.46x coverage of stock compensation 14.62M, indicating sustainable incentive practices.
  • Robust free cash flow of 593.66M exceeds capital expenditure of 85.55M by 6.94x, indicating strong organic growth funding capability.
  • Operating cash flow of 679.21M provides solid 0.71x coverage of current liabilities 951.56M, showing strong operational health.
  • Operating cash flow of 679.21M fully covers other non-current liabilities 440.29M by 1.54x, showing strong long-term stability.

Bear case

  • Operating cash flow of 679.21M barely covers its investment activities of (225.09M), with a coverage ratio of -3.02, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 175.13M against inventory of 919.55M, the 0.19 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Cash reserves of 175.13M provide limited coverage of acquisition spending of (138.43M), which is -1.27x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of (88.13M) show weak coverage of depreciation charges of 129.50M, with a -0.68 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 593.66M represents just -1.74x of debt issuance (341.25M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Specialty Industrial Machinery
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GEV GE Vernova Inc. 224.93 Bn 194.57 6.14 0.00 Bn
2 ETN Eaton Corp plc 153.13 Bn 38.99 5.75 11.22 Bn
3 PH Parker-Hannifin Corp 135.87 Bn 165.29 12.09 9.87 Bn
4 EMR Emerson Electric Co 111.68 Bn 47.10 4.65 13.41 Bn
5 ITW Illinois Tool Works Inc 86.68 Bn 28.27 5.40 8.97 Bn
6 CMI Cummins Inc 82.13 Bn 28.89 2.44 7.55 Bn
7 AME Ametek Inc/ 53.79 Bn 36.34 7.27 2.28 Bn
8 ROK Rockwell Automation, Inc 43.80 Bn 44.24 5.11 3.68 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.50 2.28
EV to Cash from Ops. EV/CFO 14.00 37.14
EV to Debt EV to Debt 4.60 34.39
EV to EBIT EV/EBIT -107.90 27.71
EV to EBITDA EV/EBITDA 231.06 25.34
EV to Free Cash Flow [EV/FCF] EV/FCF 16.02 133.36
EV to Market Cap EV to Market Cap 1.24 1.04
EV to Revenue EV/Rev 2.45 39.88
Price to Book Value [P/B] P/B 2.60 6.22
Price to Earnings [P/E] P/E -37.77 143.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 2.57
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 15.73
Dividend per Basic Share Div per Share (Qtr) 0.00 0.91
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 82.53
Interest Coverage Int. cover (Qtr) -1.06 12.34
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -65.47 -45.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -71.10 118.48
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 10.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -122.15 -283.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -94.36 -36.87
EBIT Growth (1y) % EBIT 1y % (Qtr) -114.41 -80.72
EBT Growth (1y) % EBT 1y % (Qtr) -133.54 -120.93
EPS Growth (1y) % EPS 1y % (Qtr) -159.32 -39.22
FCF Growth (1y) % FCF 1y % (Qtr) -8.82 85.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -0.05 0.87
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.61 0.62
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.10
Cash Ratio Cash Ratio (Qtr) 0.18 3.01
Current Ratio Curr Ratio (Qtr) 2.07 4.97
Debt to Equity Ratio Debt/Equity (Qtr) 0.70 0.38
Interest Cover Ratio Int Coverage (Qtr) -1.06 12.34
Times Interest Earned Times Interest Earned (Qtr) -1.06 12.34
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 1.10 -7,291.27
EBIT Margin % EBIT Margin % (Qtr) -2.27 -7,413.30
EBT Margin % EBT Margin % (Qtr) -4.42 -9,015.79
Gross Margin % Gross Margin % (Qtr) 37.80 -32.61
Net Profit Margin % Net Margin % (Qtr) -5.20 -7,962.06