📊 EACO Key Takeaways
Is Eaco Corp. (EACO) a Good Investment?
EACO demonstrates solid revenue growth (+20.1% YoY) and healthy profitability margins (8.4% net margin), supported by strong balance sheet metrics with low leverage (0.03x debt/equity) and excellent liquidity (3.37x current ratio). However, the company faces critical concerns with negative operating cash flow (-584K) and negative free cash flow (-1.8M), indicating that reported earnings are not converting to actual cash generation, which raises sustainability questions despite strong headline profitability.
EACO shows solid operating fundamentals, with 20.1% revenue growth, healthy 31.0% gross margin, and very low leverage supported by a strong current ratio and minimal long-term debt. However, growth quality is mixed because net income was essentially flat despite higher sales, operating cash flow turned negative, and free cash flow was negative, which raises questions about working capital efficiency and earnings conversion. The balance sheet provides stability, but sustained cash generation will need to improve for the fundamentals to look materially stronger.
Why Buy Eaco Corp. Stock? EACO Key Strengths
- Strong revenue growth of 20.1% YoY demonstrating market demand and business expansion
- Healthy profitability margins with 31% gross margin and 8.4% net margin indicating operational efficiency
- Fortress balance sheet with minimal leverage (0.03x debt/equity), minimal long-term debt (4.2M), and strong liquidity position (3.37x current ratio)
- Strong top-line growth of 20.1% year over year with double-digit operating margin
- Very conservative balance sheet with debt/equity of 0.03x and only $4.18M of long-term debt
- Healthy liquidity profile with 3.37x current ratio and 1.73x quick ratio
EACO Stock Risks: Eaco Corp. Investment Risks
- Negative operating cash flow (-584K) and negative free cash flow (-1.8M) indicate earnings quality issues - profits not converting to cash
- Minimal cash reserves (537K) relative to company size poses liquidity concerns if cash burn continues or market deteriorates
- Low ROA (4.1%) and ROE (5.6%) suggest inefficient capital deployment despite revenue growth; disconnect between growth and returns generation
- Operating cash flow of negative $584K and free cash flow of negative $1.76M indicate weak cash conversion
- Net income growth of just 0.2% lags revenue growth, suggesting margin pressure below the operating line or limited earnings leverage
- Cash balance of only $537K is thin relative to the scale of operations despite strong reported liquidity ratios
Key Metrics to Watch
- Operating cash flow trajectory - critical to confirm if negative OCF is temporary or structural issue
- Working capital management - current high current ratio may mask inefficiencies in receivables/inventory conversion
- Capital expenditure efficiency and ROI - need to understand if investments will generate sufficient returns to justify continuation
- Operating cash flow and free cash flow conversion
- Net margin and working capital efficiency
Eaco Corp. (EACO) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 3.37x current ratio provides a solid financial cushion.
EACO Profit Margin, ROE & Profitability Analysis
EACO vs Technology Sector: How Eaco Corp. Compares
How Eaco Corp. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Eaco Corp. Stock Overvalued? EACO Valuation Analysis 2026
Based on fundamental analysis, Eaco 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.
Eaco Corp. Balance Sheet: EACO Debt, Cash & Liquidity
EACO Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Eaco Corp.'s revenue has grown significantly by 80% over the 5-year period, indicating strong business expansion. The most recent EPS of $3.05 reflects profitable operations.
EACO Revenue Growth, EPS Growth & YoY Performance
EACO Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q2 2026 | $100.1M | $6.8M | $1.38 |
| Q1 2026 | $93.9M | $6.9M | $1.41 |
| Q3 2025 | $96.1M | $1.2M | $0.24 |
| Q2 2025 | $83.3M | $1.8M | $1.12 |
| Q1 2025 | $80.3M | $1.8M | $0.36 |
| Q3 2024 | $80.2M | $1.2M | $0.24 |
| Q2 2024 | $76.9M | $1.8M | $1.04 |
| Q3 2023 | $77.8M | $3.4M | $1.09 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Eaco Corp. Dividends, Buybacks & Capital Allocation
EACO SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Eaco Corp. (CIK: 0000784539)
📋 Recent SEC Filings
❓ Frequently Asked Questions about EACO
What is the AI rating for EACO?
Eaco Corp. (EACO) has a Combined AI Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 63% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are EACO's key strengths?
Claude: Strong revenue growth of 20.1% YoY demonstrating market demand and business expansion. Healthy profitability margins with 31% gross margin and 8.4% net margin indicating operational efficiency. ChatGPT: Strong top-line growth of 20.1% year over year with double-digit operating margin. Very conservative balance sheet with debt/equity of 0.03x and only $4.18M of long-term debt.
What are the risks of investing in EACO?
Claude: Negative operating cash flow (-584K) and negative free cash flow (-1.8M) indicate earnings quality issues - profits not converting to cash. Minimal cash reserves (537K) relative to company size poses liquidity concerns if cash burn continues or market deteriorates. ChatGPT: Operating cash flow of negative $584K and free cash flow of negative $1.76M indicate weak cash conversion. Net income growth of just 0.2% lags revenue growth, suggesting margin pressure below the operating line or limited earnings leverage.
What is EACO's revenue and growth?
Eaco Corp. reported revenue of $111.0M.
Does EACO pay dividends?
Eaco Corp. does not currently pay dividends.
Where can I find EACO SEC filings?
Official SEC filings for Eaco Corp. (CIK: 0000784539) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is EACO's EPS?
Eaco Corp. has a diluted EPS of $1.90.
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 EACO a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Eaco Corp. has a HOLD rating with 63% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is EACO stock overvalued or undervalued?
Valuation metrics for EACO: ROE of 5.6% (sector avg: 22%), net margin of 8.4% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
Should I buy EACO stock in 2026?
Our dual AI analysis gives Eaco Corp. a combined HOLD rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is EACO's free cash flow?
Eaco Corp.'s operating cash flow is $-584.0K, with capital expenditures of $1.2M. FCF margin is -1.6%.
How does EACO compare to other Technology stocks?
Vs Technology sector averages: Net margin 8.4% (avg: 18%), ROE 5.6% (avg: 22%), current ratio 3.37 (avg: 2.5).