Ethan Allen (ETD) AI Stock Analysis

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Ethan Allen

(NYSE:ETD)

Rating:70Outperform

Price Target:

$30.00

▲( 15.47% Upside)

Ethan Allen's overall stock score reflects a balanced view of its financial performance, valuation, and technical analysis. Strengths include a solid balance sheet, attractive dividend yield, and effective operational management. However, challenges such as declining revenue, cash flow pressures, and sales declines temper the outlook. The company’s strategic focus on technology and low tariff exposure, as discussed in the earnings call, provides a positive future outlook despite current economic uncertainties.

Ethan Allen (ETD) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$662.96M

Dividend Yield5.98%

Average Volume (3M)380.39K

Price to Earnings (P/E)11.6

Beta (1Y)0.70

Revenue Growth-6.32%

EPS Growth-18.35%

CountryUS

Employees3,294

SectorConsumer Cyclical

Sector Strength76

IndustryFurnishings, Fixtures & Appliances

Share Statistics

EPS (TTM)0.38

Shares Outstanding25,429,960

10 Day Avg. Volume390,424

30 Day Avg. Volume380,390

Financial Highlights & Ratios

PEG Ratio-2.07

Price to Book (P/B)1.35

Price to Sales (P/S)0.00

P/FCF Ratio14.77

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$30.00

Price Target Upside15.47% Upside

Rating ConsensusHold

Number of Analyst Covering1

Ethan Allen Business Overview & Revenue Model

Company DescriptionEthan Allen Interiors Inc. operates as an interior design company, and manufacturer and retailer of home furnishings in the United States, Mexico, Honduras, and Canada. The company operates in two segments, Wholesale and Retail. Its products include case goods items, such as beds, dressers, armoires, tables, chairs, buffets, entertainment units, home office furniture, and wooden accents; upholstery items comprising sleepers, recliners and other motion furniture, chairs, ottomans, custom pillows, sofas, loveseats, cut fabrics, and leather; and home accent items consisting of window treatments and drapery hardware, wall decors, florals, lighting, clocks, mattresses, bedspreads, throws, pillows, decorative accents, area rugs, wall coverings, and home and garden furnishings. The company markets and sells its products under the Ethan Allen brand through home furnishing retail networks and independent retailers, as well as through ethanallen.com website. As of June 30, 2021, it operated a network of approximately 302 design centers. Ethan Allen Interiors Inc. was founded in 1932 and is headquartered in Danbury, Connecticut.

How the Company Makes MoneyEthan Allen makes money primarily through the sale of home furnishings and related products. The company operates a vertically integrated business model, which means it designs, manufactures, and sells its products through its own retail network and e-commerce platform. Key revenue streams include direct sales from its design centers and online sales. The company also generates revenue through its interior design services, which help customers create personalized living spaces. Additionally, Ethan Allen maintains strategic partnerships with various suppliers to ensure a steady supply of high-quality materials for its manufacturing operations, contributing to its profitability.

Ethan Allen Financial Statement Overview

Summary

Ethan Allen's financial performance is mixed. The company shows stable profitability with solid margins and low leverage, but the revenue decline and pressure on cash flow generation are concerning. Overall, the financials reflect strong operational management but highlight areas needing improvement.

Income Statement

Positive

Ethan Allen's income statement shows stable profitability with a gross profit margin of 60.75% and a net profit margin of 9.76% for TTM (Trailing-Twelve-Months). However, there's a notable revenue decline from $817.76M in 2022 to $626.65M in 2024 TTM, impacting the growth trajectory. The EBIT and EBITDA margins remain solid at 11.45% and 13.78% respectively, indicating efficient operational management.

Balance Sheet

Positive

The balance sheet is strong with a debt-to-equity ratio of 0.26, reflecting low leverage and a healthy equity position. The return on equity is 12.78% for TTM, showcasing decent profitability for shareholders. The equity ratio stands robust at 65.35%, indicating a solid financial structure with a high proportion of assets funded by equity.

Cash Flow

Positive

Cash flow analysis reveals a decline in free cash flow from $86.78M in 2023 to $57.03M in TTM 2024, reflecting reduced cash generation capability. The operating cash flow to net income ratio is favorable at 1.06, indicating effective cash conversion from profits. However, the free cash flow to net income ratio of 0.93 suggests some pressure on free cash flow generation relative to net income.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
622.92M	646.22M	791.38M	817.76M	685.17M	589.84M
	Gross Profit
378.44M	393.06M	480.37M	484.71M	393.11M	323.13M
	EBIT
68.58M	77.99M	137.20M	138.25M	77.28M	-8.25M
	EBITDA
84.77M	93.87M	149.09M	154.31M	93.67M	28.48M
	Net Income Common Stockholders
57.84M	63.82M	105.81M	103.28M	60.01M	8.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
65.73M	161.03M	172.71M	121.12M	104.60M	72.28M
	Total Assets
738.74M	744.92M	745.45M	719.89M	683.25M	622.79M
	Total Debt
122.86M	129.28M	130.35M	115.21M	125.31M	179.48M
	Net Debt
57.13M	59.57M	68.22M	5.29M	20.71M	107.20M
	Total Liabilities
259.59M	262.00M	274.45M	312.57M	331.83M	294.73M
	Stockholders Equity
479.24M	482.98M	471.03M	407.35M	351.44M	328.06M
Cash Flow		Free Cash Flow
43.50M	70.59M	86.78M	55.97M	117.88M	36.99M
	Operating Cash Flow
52.94M	80.19M	100.66M	69.36M	129.91M	52.70M
	Investing Cash Flow
-16.19M	-19.99M	-101.52M	-13.97M	-7.12M	-4.62M
	Financing Cash Flow
-42.56M	-52.33M	-47.59M	-49.00M	-90.99M	3.70M

Ethan Allen Technical Analysis

Technical Analysis Sentiment

Negative

Last Price25.98

Price Trends

50DMA

26.86

Negative

100DMA

27.46

Negative

200DMA

28.23

Negative

Market Momentum

MACD

-0.17

Positive

RSI

44.61

Neutral

STOCH

12.17

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ETD, the sentiment is Negative. The current price of 25.98 is below the 20-day moving average (MA) of 27.05, below the 50-day MA of 26.86, and below the 200-day MA of 28.23, indicating a bearish trend. The MACD of -0.17 indicates Positive momentum. The RSI at 44.61 is Neutral, neither overbought nor oversold. The STOCH value of 12.17 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ETD.

Ethan Allen Risk Analysis

Ethan Allen disclosed 27 risk factors in its most recent earnings report. Ethan Allen reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Ethan Allen Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TILE	76 Outperform	$1.15B	13.53	18.15%	0.20%	5.41%	44.50%
LZB	72 Outperform	$1.73B	14.39	12.40%	2.00%	1.81%	8.09%
AMWD	70 Outperform	$841.72M	8.78	11.09%	―	-6.02%	-10.65%
ETD	70 Outperform	$662.96M	11.56	12.09%	5.98%	-6.32%	-18.35%
Sector *	62 Neutral	$6.84B	11.22	2.83%	3.93%	2.65%	-21.93%
MLKN	52 Neutral	$1.10B	38.36	2.28%	4.53%	-2.68%	-56.16%
SNBR	45 Neutral	$208.70M	―	9.10%	―	-12.36%	37.69%

* Consumer Cyclical Sector Average

Performance Comparison

ETD

Ethan Allen

26.07

-0.47

-1.77%

AMWD

American Woodmark

56.74

-30.58

-35.02%

MLKN

MillerKnoll

16.29

-9.60

-37.08%

TILE

Interface

19.62

4.20

27.24%

LZB

La-Z-Boy Incorporated

41.98

6.68

18.92%

SNBR

Sleep Number

9.21

-4.54

-33.02%

Ethan Allen Earnings Call Summary

Earnings Call Date:May 05, 2025

(Q3-2025)

% Change Since: -9.51%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Neutral

Ethan Allen demonstrated strong financial management and operational efficiency amidst a challenging economic environment. While the company faces sales declines and external uncertainties, its robust financial position, limited tariff exposure, and strategic use of technology are significant positives. However, the decrease in operating margin and uncertainties in demand trends present ongoing challenges.

Q3-2025 Updates

Positive Updates

Strong Financial Position

Ethan Allen reported a strong gross margin of 61.2% and generated $10.2 million in cash from operating activities. The company maintains a robust balance sheet with $183 million in cash and no outstanding debt.

Efficient Operations

The company achieved operational efficiencies by reducing headcount by 4.5% year-over-year and 36% since 2019, leveraging technology to streamline workflows and improve margins.

Limited Tariff Exposure

Ethan Allen's exposure to tariffs is limited, with less than 5% of total costs impacted by China tariffs. The company benefits from its North American manufacturing operations, which account for 75% of its furniture production.

Continued Dividend Payments

The company declared and paid a regular quarterly cash dividend of $0.39 per share, with a current yield of 5.4%, one of the highest in the industry.

Negative Updates

Sales Decline

Consolidated net sales were $142.7 million, reflecting lower delivered unit volume. Retail segment written orders were down 13.2%, and wholesale orders decreased by 11.2%.

Decreased Operating Margin

Adjusted operating margin decreased to 8% from 10% a year ago, though it remains 180 basis points higher than pre-pandemic levels in March 2019.

Challenging Economic Environment

The company cited challenges such as tariffs, economic uncertainty, elevated interest rates, and a tough housing market impacting demand.

State Department Contract Uncertainty

Recent changes in the State Department have led to cautious purchasing behavior, potentially affecting future orders under the company's contract with the department.

Company Guidance

During the Ethan Allen Fiscal 2025 Third Quarter Analyst Conference Call, the company provided guidance characterized by strong financial metrics despite operating in a challenging economic environment. The company reported consolidated net sales of $142.7 million, with a gross margin of 61.2%, and an adjusted operating margin of 8%. Retail segment written orders decreased by 13.2%, while wholesale orders were down by 11.2%. The company maintained a robust balance sheet with no outstanding debt and ended the quarter with total cash and investments of $183 million. Positive operating cash flow amounted to $10.2 million, with capital expenditures of $2 million. Ethan Allen's effective tax rate was noted at 23.4%, and adjusted diluted EPS was $0.38. The company continues to prioritize reinvention, leveraging technology in manufacturing and marketing, while maintaining low exposure to tariffs due to a significant North American manufacturing presence.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.