Electro-Sensors Inc. Common Stock (ELSE)

FairStock Score: 19/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I start with business quality. Electro-Sensors sells industrial production monitoring and process control systems, measuring machine rates, counts, and speed. It is a 38-employee niche manufacturer. I see no clear durable moat; switching costs may exist, but scale and pricing power are not evident. In the latest filed quarter, fiscal Q1 2026, revenue was $2.6 million, net income was -$116,000, and margin was -4.50%. The supplied data show positive revenue growth but a sharp profit decline, which tells me the top line is not converting into earnings. Returns are poor: ROE 1.74% and ROCE -0.19%. Piotroski 3/9 confirms weak fundamentals. Free cash flow is positive at $667,000, a 2.5% yield, and Altman Z 16.07 suggests low bankruptcy risk, though D/E is unavailable. Valuation is the problem. At the $7.74 close on 2026-08-07, market cap is $26.9 million, P/E 96.75, P/B 1.83, and EV/EBITDA 42.88. The Graham Number is $2.76, meaning the price is 180.44% above that value. FairStock Score is 19/100. The Lynch category is none because only 0 years of filed results exist, needing 3. Beta 0.63 and the 52-week range of $4.05-$7.75 show calm historical trading, but the price now sits near the high. That is not a margin of safety; it is optimism. I would need far better earnings and returns before calling this a value opportunity.

In plain English: Electro-Sensors makes monitoring and control equipment that helps factories track machine speed and production. In the first quarter of fiscal 2026, revenue was $2.6 million but it lost $116,000, so the business looks weak. At $7.74 a share, the stock looks expensive next to the company's earnings and net assets.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-08-07 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer