📊 EML Key Takeaways
Is EML a Good Investment? Thesis Analysis
Eastern Co demonstrates solid financial stability with strong balance sheet metrics (3.59x current ratio, 0.27x debt/equity) and adequate interest coverage, but profitability remains challenged with thin margins (2.9% net margin, 4.3% operating margin) and weak cash generation relative to scale. The company's fundamentals suggest a stable but low-growth business with limited operational leverage.
Why Buy EML? Key Strengths
- Strong liquidity position with 3.59x current ratio and manageable debt levels (0.27x debt/equity)
- Solid interest coverage ratio of 4.0x indicates adequate debt servicing capability
- Positive free cash flow of $4.9M demonstrates ability to generate cash despite low margins
EML Investment Risks to Consider
- Thin profit margins (2.9% net, 4.3% operating) leave minimal cushion for operational disruptions or cost inflation
- Low return on equity (5.7%) and ROA (3.3%) suggest inefficient capital deployment in a mature, low-margin industry
- Weak FCF margin (2.0%) and operating cash flow ($8.9M) relative to $249M revenue indicates limited reinvestment capacity for growth
Key Metrics to Watch
- Gross margin trend - any compression would further pressure limited profitability
- Operating cash flow relative to capex - the 4.9M free cash flow must cover any debt obligations and shareholder returns
- Revenue stability - cyclical exposure in hardware sector could pressure margins in economic downturns
EML Financial Metrics
💡 AI Analyst Insight
The relatively thin 2.0% FCF margin may limit capital allocation flexibility. Strong liquidity with a 3.59x current ratio provides a solid financial cushion.
EML Profitability Ratios
EML vs Default Sector
How EASTERN CO compares to Default sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is EML Overvalued or Undervalued?
Based on fundamental analysis, EASTERN CO has mixed fundamental signals relative to the Default sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
EML Balance Sheet & Liquidity
EML 5-Year Financial Trend & Growth Analysis
5-Year Trend Summary: EASTERN CO's revenue has shown modest growth of 8% over the 5-year period. The most recent EPS of $-1.37 indicates the company is currently unprofitable.
EML Growth Metrics (YoY)
EML Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $55.3M | $578.9K | $0.10 |
| Q2 2025 | $70.2M | $3.4M | $0.56 |
| Q1 2025 | $63.3M | $1.9M | $0.31 |
| Q3 2024 | $62.0M | $3.1M | $0.49 |
| Q2 2024 | $68.3M | $1.4M | $0.22 |
| Q1 2024 | $67.9M | $607.3K | N/A |
| Q3 2023 | $63.9M | $3.1M | $0.49 |
| Q2 2023 | $68.3M | $1.4M | $0.22 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
EML Capital Allocation
EML SEC 10-K & 10-Q Filing Analysis
Access official SEC EDGAR filings for EASTERN CO (CIK: 0000031107)
📋 Recent SEC Filings
❓ Frequently Asked Questions about EML
What is the AI rating for EML?
EASTERN CO (EML) has an AI rating of HOLD with 62% confidence, based on fundamental analysis of SEC EDGAR filings.
What are EML's key strengths?
Claude: Strong liquidity position with 3.59x current ratio and manageable debt levels (0.27x debt/equity). Solid interest coverage ratio of 4.0x indicates adequate debt servicing capability.
What are the risks of investing in EML?
Claude: Thin profit margins (2.9% net, 4.3% operating) leave minimal cushion for operational disruptions or cost inflation. Low return on equity (5.7%) and ROA (3.3%) suggest inefficient capital deployment in a mature, low-margin industry.
What is EML's revenue and growth?
EASTERN CO reported revenue of $249.0M.
Does EML pay dividends?
EASTERN CO pays dividends, with $2.7M distributed to shareholders in the trailing twelve months.
Where can I find EML SEC filings?
Official SEC filings for EASTERN CO (CIK: 0000031107) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is EML's EPS?
EASTERN CO has a diluted EPS of $1.17.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is EML a good stock to buy right now?
Based on our AI fundamental analysis in March 2026, EASTERN CO has a HOLD rating with 62% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is EML stock overvalued or undervalued?
Valuation metrics for EML: ROE of 5.7% (sector avg: 15%), net margin of 2.9% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
Should I buy EML stock in 2026?
Our dual AI analysis gives EASTERN CO a combined HOLD rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is EML's free cash flow?
EASTERN CO's operating cash flow is $8.9M, with capital expenditures of $4.0M. FCF margin is 2.0%.
How does EML compare to other Default stocks?
Vs Default sector averages: Net margin 2.9% (avg: 12%), ROE 5.7% (avg: 15%), current ratio 3.59 (avg: 1.8).