📊 ESP Key Takeaways
Is ESP a Good Investment? Thesis Analysis
Espey Manufacturing demonstrates exceptional profitability with 23.4% net margin and strong operating efficiency (24.2% operating margin) supported by a fortress balance sheet with zero debt and $17.8M in cash. However, the extraordinary 1098.6% revenue growth appears unsustainable and requires verification of its durability; the concerning disconnect between strong net income growth and weak free cash flow conversion (1.4% FCF margin) suggests potential working capital management challenges or one-time revenue items.
Why Buy ESP? Key Strengths
- Exceptional profitability metrics: 23.4% net margin significantly outperforms electronics industry averages
- Strong balance sheet fundamentals: Zero long-term debt, $17.8M cash position, and 2.53x current ratio provide financial stability
- Operational efficiency: 24.2% operating margin and 35.0% gross margin demonstrate pricing power and cost control
- Solid liquidity position: 1.81x quick ratio ensures ability to meet short-term obligations
ESP Investment Risks to Consider
- Unsustainable revenue growth: 1098.6% YoY increase is anomalous and likely non-recurring; requires clarification on source
- Free cash flow deterioration: Only $296.4K FCF (1.4% margin) despite $5.0M net income signals potential working capital stress or quality-of-earnings concern
- Weak free cash flow conversion: Capital expenditures of $2.6M nearly offset operating cash flow of $2.9M, limiting reinvestment capacity
- Modest return on equity: 9.4% ROE lags capital availability and suggests underutilization of balance sheet strength
Key Metrics to Watch
- Revenue sustainability and growth drivers in next reporting period
- Operating cash flow conversion and working capital management trends
- Free cash flow generation and capital allocation strategy
ESP Financial Metrics
💡 AI Analyst Insight
The relatively thin 1.4% FCF margin may limit capital allocation flexibility. Strong liquidity with a 2.53x current ratio provides a solid financial cushion.
ESP Profitability Ratios
ESP vs Technology Sector
How ESPEY MFG & ELECTRONICS CORP compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is ESP Overvalued or Undervalued?
Based on fundamental analysis, ESPEY MFG & ELECTRONICS CORP has mixed fundamental signals relative to the Technology 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.
ESP Balance Sheet & Liquidity
ESP 5-Year Financial Trend & Growth Analysis
5-Year Trend Summary: ESPEY MFG & ELECTRONICS CORP's revenue has grown significantly by 208% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.44 reflects profitable operations.
ESP Growth Metrics (YoY)
ESP Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $3.5M | $1.0M | $0.40 |
| Q2 2025 | $2.4M | $1.8M | $0.71 |
| Q1 2025 | $374.2K | $1.1M | $0.44 |
| Q3 2024 | $907.8K | $867.3K | $0.35 |
| Q2 2024 | $727.3K | $1.1M | $0.47 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ESP Capital Allocation
ESP SEC 10-K & 10-Q Filing Analysis
Access official SEC EDGAR filings for ESPEY MFG & ELECTRONICS CORP (CIK: 0000033533)
📋 Recent SEC Filings
❓ Frequently Asked Questions about ESP
What is the AI rating for ESP?
ESPEY MFG & ELECTRONICS CORP (ESP) has an AI rating of BUY with 72% confidence, based on fundamental analysis of SEC EDGAR filings.
What are ESP's key strengths?
Claude: Exceptional profitability metrics: 23.4% net margin significantly outperforms electronics industry averages. Strong balance sheet fundamentals: Zero long-term debt, $17.8M cash position, and 2.53x current ratio provide financial stability.
What are the risks of investing in ESP?
Claude: Unsustainable revenue growth: 1098.6% YoY increase is anomalous and likely non-recurring; requires clarification on source. Free cash flow deterioration: Only $296.4K FCF (1.4% margin) despite $5.0M net income signals potential working capital stress or quality-of-earnings concern.
What is ESP's revenue and growth?
ESPEY MFG & ELECTRONICS CORP reported revenue of $21.2M.
Does ESP pay dividends?
ESPEY MFG & ELECTRONICS CORP pays dividends, with $3.4M distributed to shareholders in the trailing twelve months.
Where can I find ESP SEC filings?
Official SEC filings for ESPEY MFG & ELECTRONICS CORP (CIK: 0000033533) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ESP's EPS?
ESPEY MFG & ELECTRONICS CORP has a diluted EPS of $1.75.
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 ESP a good stock to buy right now?
Based on our AI fundamental analysis in March 2026, ESPEY MFG & ELECTRONICS CORP has a BUY rating with 72% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is ESP stock overvalued or undervalued?
Valuation metrics for ESP: ROE of 9.4% (sector avg: 22%), net margin of 23.4% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
Should I buy ESP stock in 2026?
Our dual AI analysis gives ESPEY MFG & ELECTRONICS CORP a combined BUY rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is ESP's free cash flow?
ESPEY MFG & ELECTRONICS CORP's operating cash flow is $2.9M, with capital expenditures of $2.6M. FCF margin is 1.4%.
How does ESP compare to other Technology stocks?
Vs Technology sector averages: Net margin 23.4% (avg: 18%), ROE 9.4% (avg: 22%), current ratio 2.53 (avg: 2.5).