Envela Corporation Common Stock (ELA)

FairStock Score: 65/100 — STEADY

Key Financials

Strengths

• High return on equity of 24.4% demonstrating efficient capital deployment
• Conservative balance sheet with debt-to-equity of just 0.30, providing financial flexibility
• Altman Z-Score of 12.1 confirms minimal bankruptcy risk and strong solvency
• Revenue growth of 66.6% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($6) with negative 224% margin of safety—limited downside protection

AI Analysis

Envela Corporation Common Stock is a micro-cap consumer cyclical company valued at $480 million. The business generates $241 million in annual revenue with a 2.5% net margin. From a quality standpoint, Envela shows Altman Z-Score of 12.1 confirms fortress-level solvency and strong 24% ROE. On valuation, the stock is trading at a premium 33.1x earnings, with trades far above its Graham Number ($6) with no margin of safety. Growth dynamics show revenue growing at 66.6% and profit growth of 274.6%. Our composite FairStock Score of 65/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Envela's 67% revenue growth trajectory could accelerate as it captures additional market share in the consumer cyclical sector. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

At 33x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer