Power Solutions International, Inc. (NASDAQ: PSIX)

Sector: Industrials Industry: Specialty Industrial Machinery CIK: 0001137091
Market Cap 2.16 Bn
P/B 13.28
P/E 17.80
P/S 3.19
ROIC (Qtr) 38.26
Div Yield % 0.00
Rev 1y % (Qtr) 61.97
Total Debt (Qtr) 153.67 Mn
Debt/Equity (Qtr) 0.95
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About

Investment thesis

Bull case

  • Healthy cash reserves of 52.73M provide 8.36x coverage of short-term debt 6.30M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 427.58M provides 2.78x coverage of total debt 153.67M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 61.38M provides strong 169.09x coverage of stock compensation 363000, indicating sustainable incentive practices.
  • Tangible assets of 427.58M provide exceptional 246.73x coverage of deferred revenue 1.73M, showing strong service capability backing.
  • Robust free cash flow of 51.82M exceeds capital expenditure of 9.56M by 5.42x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 61.38M barely covers its investment activities of (9.56M), with a coverage ratio of -6.42, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (9.56M) provide weak support for R&D spending of 18.90M, which is -0.51x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 61.38M provides minimal -3.47x coverage of tax expenses of (17.68M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Free cash flow of 51.82M represents just -1.25x of debt issuance (41.56M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Other current assets of 25.95M provide weak coverage of payables of 83.59M, which is 0.31x, suggesting potential working capital stress in near term.

Product and Service Breakdown of Revenue (2024)

Geographical 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 4.90 2.28
EV to Cash from Ops. EV/CFO 36.66 37.14
EV to Debt EV to Debt 14.64 34.39
EV to EBIT EV/EBIT 20.28 27.71
EV to EBITDA EV/EBITDA 18.53 25.34
EV to Free Cash Flow [EV/FCF] EV/FCF 43.42 133.36
EV to Market Cap EV to Market Cap 1.04 1.04
EV to Revenue EV/Rev 3.33 39.88
Price to Book Value [P/B] P/B 13.28 6.22
Price to Earnings [P/E] P/E 17.80 143.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 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) 14.93 12.34
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -122.35 -45.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 20.73 118.48
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 10.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 94.88 -283.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 54.25 -36.87
EBIT Growth (1y) % EBIT 1y % (Qtr) 61.29 -80.72
EBT Growth (1y) % EBT 1y % (Qtr) 84.52 -120.93
EPS Growth (1y) % EPS 1y % (Qtr) 122.36 -39.22
FCF Growth (1y) % FCF 1y % (Qtr) 53.16 85.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 49.12 0.87
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.47 0.62
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.10
Cash Ratio Cash Ratio (Qtr) 0.38 3.01
Current Ratio Curr Ratio (Qtr) 2.28 4.97
Debt to Equity Ratio Debt/Equity (Qtr) 0.95 0.38
Interest Cover Ratio Int Coverage (Qtr) 14.93 12.34
Times Interest Earned Times Interest Earned (Qtr) 14.93 12.34
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 18.00 -7,291.27
EBIT Margin % EBIT Margin % (Qtr) 16.43 -7,413.30
EBT Margin % EBT Margin % (Qtr) 15.33 -9,015.79
Gross Margin % Gross Margin % (Qtr) 27.60 -32.61
Net Profit Margin % Net Margin % (Qtr) 17.90 -7,962.06