Is Escalade Incorporated (USA Stocks:ESCA) moving to revert?
 | By Raphi Shpitalnik | Macroaxis Story |
Escalade Incorporated has an average rating of 'Strong Buy' from one analyst. This consensus may be based on technical analysis, which typically uses price momentum, patterns, and trends from historical prices. The goal is to identify signals based on market sentiment and investors' perception of Escalade's future value. Let's delve into a few aspects of Escalade's technical analysis.
Main Ideas
Despite a slight dip in the day's open price at $13.51 and a minor price change of -$0.08, Escalade Incorporated (ESCA) presents a potentially smart investment opportunity with a potential upside of 3.94. The company's solid operating income of $17.7M and net income from continuing operations at $9.7M also contribute to its promising financial stability.Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.
Reviewed by Gabriel Shpitalnik
Escalade Incorporated (NASDAQ: ESCA), a player in the Leisure Products industry, presents an intriguing investment opportunity. The company's net income from continuing operations stands at $9.7M, despite a net interest income loss of $5.6M. The firm's payout ratio is 0.9, indicating a strong commitment to returning profits to shareholders. The PE ratio of 19.46 and PEG ratio of 1.25 suggest a fair valuation. The stock's 50-day moving average is 16.50, while the 200-day moving average is 16.18, indicating a positive trend. Analysts have a strong buy consensus on the stock, with the lowest estimated target price at $15.47 and the highest at $18.87. The short ratio is 6.91, with 132.8K shares short, suggesting investors are bullish on the stock. The accumulation distribution of 0.0387 and a daily balance of power of -0.15 indicate a healthy market interest. Despite a period momentum indicator of -0.08, the stock's real value is estimated at $16.07, higher than the current market value of $13.43. Therefore, Escalade Incorporated appears to be a smart investment opportunity. Given the current uncertainty in the leisure products sector, it's worth examining Escalade Incorporated in relation to market trends. As previously suggested, Escalade Incorporated is experiencing a downturn as investors adopt a more bearish stance due to heightened sector volatility. The company's stock price movements largely mirror overall market trends. Strong fundamental indicators may suggest a short-term price drift for investors. Escalade Incorporated is set to announce its earnings today, with the next financial report due on May 14, 2024.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Escalade Incorporated. Your research has to be compared to or analyzed against Escalade Incorporated's peers to derive any actionable benefits. When done correctly, Escalade Incorporated's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Escalade Incorporated.
Using predictive technical analysis, we can analyze different prices and returns patterns and diagnose historical swings to determine the real value of Escalade Incorporated. In general, sophisticated investors focus on analyzing Escalade Incorporated stock price patterns and their correlations with different microeconomic environment and drivers. They apply predictive analytics to build Escalade Incorporated's daily price indicators and compare them against related drivers such as momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional technical analysis and fundamental analysis, we attempt to find the most accurate representation of Escalade Incorporated's intrinsic value. In addition to deriving basic predictive indicators for Escalade Incorporated, many experienced traders also check how macroeconomic factors affect Escalade Incorporated price patterns. Please read more on our technical analysis page or use our predictive modules below to complement your research.
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Escalade Incorporated's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
How important is Escalade Incorporated's Liquidity
Escalade Incorporated financial leverage refers to using borrowed capital as a funding source to finance Escalade Incorporated ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Escalade Incorporated financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Escalade Incorporated's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Escalade Incorporated's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Escalade Incorporated's total debt and its cash.
Escalade Incorporated Gross Profit
Escalade Incorporated Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Escalade Incorporated previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Escalade Incorporated Gross Profit growth over the last 10 years. Please check Escalade Incorporated's gross profit and other fundamental indicators for more details.
Is Escalade Incorporated valued fairly by the market?
The entity has a beta of 2.0929. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Escalade Incorporated will likely underperform. The beta indicator helps investors understand whether Escalade Incorporated moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Escalade deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns. The big decline in price over the last few months for Escalade Incorporated could raise concerns from investors as the firm is trading at a share price of 13.43 on very low momentum in volume. The company management teams failed to add value to investors and position the firm supply of money to exploit market volatility in February. However, diversifying your holdings with Escalade Incorporated or similar stocks can still protect your portfolios during high-volatility market scenarios.The stock standard deviation of daily returns for 90 days investing horizon is currently 2.68. The current volatility is consistent with the ongoing market swings in February 2024 as well as with Escalade Incorporated unsystematic, company-specific events. As Warren Buffet wisely noted, "Price is what you pay, value is what you get." Escalade Incorporated (NASDAQ: ESCA), a player in the Leisure industry, appears to offer value at its current price. With a PE Ratio of 19.46 and a Price to Earnings to Growth (PEG) ratio of 1.25, the company's stock is reasonably priced relative to its earnings growth. Moreover, the company's robust Current Ratio of 4.21X and a healthy Net Asset of $298.72M underscore its financial stability. However, investors should be cautious of the company's negative Risk Adjusted Performance of -0.09 and a high Probability of Bankruptcy at 21.03%. Despite these risks, the Wall Street Target Price of $20 suggests a potential upside of 3.94%, making Escalade Incorporated a stock to consider for those seeking value and growth. .
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