Investment Thesis
IES Holdings demonstrates strong operational fundamentals with 16.9% revenue growth, zero debt, and exceptional 18.8% ROE. However, net income declined 1.9% YoY despite robust top-line growth, signaling margin compression that requires investigation into cost pressures and pricing dynamics in the electrical contracting sector.
Strengths
- Zero long-term debt with pristine balance sheet (Debt/Equity 0.0x) provides substantial financial flexibility
- Strong revenue growth of 16.9% YoY with healthy 25.7% gross margins and 10.9% net margin
- Exceptional capital efficiency with ROE of 18.8% and ROA of 10.1%, supported by 51.9% EPS growth
Risks
- Net income declined 1.9% YoY despite 16.9% revenue growth, indicating margin compression and deteriorating profitability quality
- Minimal cash position of $48.7M represents only 2.7% of revenue, limiting financial cushion for downturns or acquisitions
- Large discrepancy between net margin (10.9%) and free cash flow margin (2.8%) reveals significant working capital absorption or capex requirements
Key Metrics to Watch
- Operating margin and gross margin trends to assess if margin compression stabilizes or worsens
- Operating cash flow and working capital management, particularly accounts receivable/payable cycles
- Cash balance trajectory and debt levels given growth trajectory and low liquidity cushion
Financial Metrics
Revenue
1.8B
Net Income
201.3M
EPS (Diluted)
$9.95
Free Cash Flow
52.6M
Total Assets
2.0B
Cash
48.7M
Profitability Ratios
Gross Margin
25.7%
Operating Margin
11.4%
Net Margin
10.9%
ROE
18.8%
ROA
10.1%
FCF Margin
2.8%
Balance Sheet & Liquidity
Current Ratio
1.55x
Quick Ratio
1.40x
Debt/Equity
0.00x
Debt/Assets
46.0%
Interest Coverage
105.15x
Long-term Debt
0.0
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-06T19:34:43.395111 |
Data as of: 2026-03-31 |
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