Eastern Company AI Stock Analysis
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Eastern Company (EML) AI Stock Analysis
Eastern Company
(NASDAQ:EML)
The overall score of 72 reflects a company with strong positive momentum and a healthy financial foundation, offset by operational cash flow concerns. The most significant positive factor is the robust earnings call, highlighted by surging sales, a record backlog, and dramatically improved profitability, which provides excellent near-term visibility. The balance sheet is a core strength, offering financial flexibility. However, the score is constrained by weak free cash flow conversion and compressed gross margins, which represent key risks to monitor. Technical trends are bullish, and the valuation is reasonable, supporting the positive outlook.
Eastern Company (EML) vs. SPDR S&P 500 ETF (SPY)
- Market Cap
- $185.57M
- Dividend Yield
- 1.43%
- Average Volume (3M)
- 11.61K
- Price to Earnings (P/E)
- 16.9
- Beta (1Y)
- 0.81
- Revenue Growth
- -0.58%
- EPS Growth
- 111.07%
- Country
- US
- Employees
- 1,239
- Sector
- Industrials
- Sector Strength
- 63
- Industry
- Manufacturing - Tools & Accessories
Eastern Company Business Overview & Revenue Model
Company Description
The Eastern Company designs, manufactures, and sells engineered solutions to industrial markets in the United States and North America. The company offers turnkey returnable packaging solutions, which are used in the assembly processes of vehicles, a...
How the Company Makes Money
Eastern Company makes money mainly by manufacturing and selling tobacco products—especially cigarettes—into the Egyptian market. Its core revenue stream is product sales (typically to wholesalers/distributors and retailers, ultimately reaching end co...
Eastern Company Earnings Call Summary
The call was strongly positive overall. Eastern reported substantial year-over-year growth in sales, margins, operating profit, net income, adjusted EBITDA and backlog, supported by recovering core-business volumes, pricing actions, operational improvements and the contribution from its aerospace and defense acquisitions. The principal challenges were lower margins at Sungear and Crown Precision, ongoing repricing work, higher input costs, working-capital cash usage and the possibility of seasonal and OEM production moderation.
Q3-2026 Updates
Positive Updates
Negative Updates
Company Guidance
Management said backlog supports the balance of 2026 and the first half of 2027, with backlog at $126.1 million, an increase of 70% year-over-year, and expects most of it to convert over the next 2 to 3 quarters; the company expects to return to more typical seasonality, with customers typically reducing production during the fourth quarter holiday season and the first quarter generally being the slowest, although from a much higher base. Management expects to recover rising material, freight and logistics costs over the coming quarters, is monitoring the possibility that truck production moderates next year, intends to make much more progress on pricing Sungear and Crown Precision over the next, say, 3 to 6 months, and said additional capacity for existing production can take up to a year, but usually less than that, 6, 7 months, with such work contributing to 2027.
Eastern Company Financial Statement Overview
Summary
Financial performance is mixed. The balance sheet is a key strength with low leverage (debt-to-equity 0.16) and improving equity. The income statement shows a solid revenue recovery and return to profitability, but gross margins are compressing to 21.5%. The primary concern is weak cash flow quality, with free cash flow declining 47% and a low operating cash flow to net income ratio of 0.28, indicating poor earnings conversion.
Income Statement
62PositiveBalance Sheet
78PositiveCash Flow
45Neutral| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 254.01M | 248.97M | 272.75M | 258.86M | 279.27M | 246.52M |
| Gross Profit | 54.70M | 56.39M | 67.27M | 61.77M | 58.62M | 56.77M |
| EBITDA | 20.81M | 13.86M | 25.68M | 23.26M | 23.91M | 28.06M |
| Net Income | 10.91M | 5.12M | -8.53M | 8.59M | 12.30M | 9.35M |
Balance Sheet | ||||||
| Total Assets | 247.09M | 216.68M | 235.31M | 252.04M | 261.52M | 266.33M |
| Cash, Cash Equivalents and Short-Term Investments | 8.15M | 7.41M | 16.06M | 9.29M | 10.19M | 6.17M |
| Total Debt | 60.66M | 53.86M | 60.24M | 62.08M | 76.40M | 82.62M |
| Total Liabilities | 114.41M | 92.03M | 114.62M | 119.56M | 134.91M | 151.73M |
| Stockholders Equity | 132.68M | 124.65M | 120.69M | 132.48M | 126.61M | 114.60M |
Cash Flow | ||||||
| Free Cash Flow | 8.03M | 4.90M | 10.84M | 20.05M | 7.10M | -5.74M |
| Operating Cash Flow | 12.73M | 8.87M | 20.55M | 26.48M | 10.46M | -2.02M |
| Investing Cash Flow | -12.92M | -508.92K | -8.47M | -5.43M | 5.09M | 12.62M |
| Financing Cash Flow | -1.39M | -16.30M | -4.82M | -22.90M | -11.78M | -20.27M |
Eastern Company Technical Analysis
Price Trends
Market Momentum
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EML, the sentiment is Positive. The current price of 30.81 is above the 20-day moving average (MA) of 26.82, above the 50-day MA of 25.75, and above the 200-day MA of 23.01, indicating a bullish trend. The MACD of 1.30 indicates Negative momentum. The RSI at 67.81 is Neutral, neither overbought nor oversold. The STOCH value of 74.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EML.
Eastern Company Risk Analysis
Eastern Company disclosed 1 risk factors in its most recent earnings report. Eastern Company reported the most risks in the "Legal & Regulatory" category.
Latest Risks Added
0 New RisksEastern Company Peers Comparison
Overall Rating
SWK72.4Outperform- EML72Outperform
SNA70Outperform
KMT66Neutral
TKR65Neutral
HLMN60Neutral
Financial Indicators
| Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| SWK | 72Outperform | $17.19B | 20.27 | 9.39% | 2.95% | 0.38% | 93.48% |
| EML | 72Outperform | $189.25M | 16.89 | 8.52% | 1.43% | -0.58% | 111.07% |
| SNA | 70Outperform | $19.33B | 18.89 | 16.84% | 2.65% | 2.93% | 0.65% |
| KMT | 66Neutral | $1.89B | 3.15 | 38.97% | 3.30% | 32.48% | 529.12% |
| TKR | 65Neutral | $7.59B | 27.05 | 8.86% | 1.29% | 5.95% | -4.17% |
| Sector * | 63Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
| HLMN | 60Neutral | $1.56B | 61.36 | 1.98% | ― | 6.40% | -34.55% |
* Industrials Sector Average
Performance Comparison
| Show on chart | Ticker | Company Name | Price | Change | % Change |
|---|---|---|---|---|---|
| EML | Eastern Company | 30.81 | 11.94 | 63.26% | |
| KMT | Kennametal Inc | 24.26 | -1.01 | -3.99% | |
| SNA | Snap-on Inc | 367.89 | 47.87 | 14.96% | |
| SWK | Stanley Black & Decker | 113.02 | 51.97 | 85.13% | |
| TKR | Timken | 110.41 | 36.99 | 50.38% | |
| HLMN | Hillman Solutions Corp. | 7.90 | -0.35 | -4.24% |
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.
Date of analysis: Nov 11, 2026