Mesa Laboratories Inc /Co/ (NASDAQ: MLAB)

Sector: Technology Industry: Scientific & Technical Instruments CIK: 0000724004
Market Cap 424.65 Mn
P/B 2.38
P/E -270.13
P/S 1.73
ROIC (Qtr) 5.27
Div Yield % 0.99
Rev 1y % (Qtr) 5.02
Total Debt (Qtr) 174.85 Mn
Debt/Equity (Qtr) 0.98

About

Mesa Laboratories, Inc., a Colorado-based corporation, operates under the ticker symbol MLAB in the life sciences tools and critical quality control solutions industry. The company is a global leader in the design and manufacture of products and services for regulated applications in the pharmaceutical, healthcare, and medical device industries. Mesa Laboratories operates in four segments: Sterilization and Disinfection Control, Clinical Genomics, Biopharmaceutical Development, and Calibration Solutions. The Sterilization and Disinfection Control...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 20.42M provide 4.36x coverage of short-term debt 4.69M, demonstrating strong liquidity position and minimal refinancing risk.
  • Tangible assets of 148.59M provide exceptional 10.42x coverage of deferred revenue 14.26M, showing strong service capability backing.
  • Robust free cash flow of 37.55M exceeds capital expenditure of 3.67M by 10.23x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 148.59M provides 3.02x coverage of working capital 49.14M, indicating strong operational backing.
  • Operating cash flow of 41.22M fully covers other non-current liabilities 19.17M by 2.15x, showing strong long-term stability.

Bear case

  • Operating cash flow of 41.22M barely covers its investment activities of (3.92M), with a coverage ratio of -10.51, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 41.22M provides thin coverage of dividend payments of (3.49M) with a -11.80 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (3.92M) provide weak support for R&D spending of 20.18M, which is -0.19x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 41.22M shows concerning coverage of stock compensation expenses of 14.07M, with a 2.93 ratio indicating potential earnings quality issues.
  • Operating earnings of 17.68M show weak coverage of depreciation charges of 24.80M, with a 0.71 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Scientific & Technical Instruments
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GRMN Garmin Ltd 38.77 Bn 24.68 5.58 0.16 Bn
2 KEYS Keysight Technologies, Inc. 34.91 Bn 41.07 6.49 2.78 Bn
3 COHR Coherent Corp. 28.91 Bn 244.51 4.78 3.51 Bn
4 TDY Teledyne Technologies Inc 23.87 Bn 29.19 3.98 2.53 Bn
5 TRMB Trimble Inc. 19.54 Bn 54.65 5.43 1.39 Bn
6 FTV Fortive Corp 18.68 Bn 31.02 3.31 3.31 Bn
7 MKSI Mks Inc 10.78 Bn 38.63 2.81 4.55 Bn
8 CGNX Cognex Corp 6.14 Bn 55.76 6.32 0.08 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.36 2.20
EV to Cash from Ops. EV/CFO 14.18 9.84
EV to Debt EV to Debt 3.34 22.70
EV to EBIT EV/EBIT 33.07 15.74
EV to EBITDA EV/EBITDA 14.67 11.58
EV to Free Cash Flow [EV/FCF] EV/FCF 15.57 24.79
EV to Market Cap EV to Market Cap 1.38 -2.78
EV to Revenue EV/Rev 2.38 6.45
Price to Book Value [P/B] P/B 2.38 7.12
Price to Earnings [P/E] P/E -270.13 13.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -0.45 -16.40
Dividend Payout Ratio % Div Payout % (Qtr) -213.30 -7.19
Dividend per Basic Share Div per Share (Qtr) 0.64 0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 9.40 6.83
Interest Coverage Int. cover (Qtr) 1.70 -13.61
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 15.45 -21.70
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -16.09 101.63
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 1.97
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 98.38 19.84
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 116.92 17.31
EBIT Growth (1y) % EBIT 1y % (Qtr) 106.90 20.90
EBT Growth (1y) % EBT 1y % (Qtr) 102.73 82.68
EPS Growth (1y) % EPS 1y % (Qtr) 99.34 65.55
FCF Growth (1y) % FCF 1y % (Qtr) 4.04 32.88
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.85 34.27
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.57 0.49
Cash Payout Ratio Cash Payout (Qtr) 0.08 0.05
Cash Ratio Cash Ratio (Qtr) 0.42 2.99
Current Ratio Curr Ratio (Qtr) 2.02 4.83
Debt to Equity Ratio Debt/Equity (Qtr) 0.98 0.67
Interest Cover Ratio Int Coverage (Qtr) 1.70 -13.61
Times Interest Earned Times Interest Earned (Qtr) 1.70 -13.61
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 17.30 -296.15
EBIT Margin % EBIT Margin % (Qtr) 7.21 -316.09
EBT Margin % EBT Margin % (Qtr) 2.96 -351.37
Gross Margin % Gross Margin % (Qtr) 62.20 40.05
Net Profit Margin % Net Margin % (Qtr) -0.60 -354.10