Breaking Down Envela Corporation (ELA) Financial Health: Key Insights for Investors

Are you keeping a close watch on the financial health of Corporation (ELA)? As of fiscal year 2024, the company reported impressive figures, including annual revenue of $180.4 million and earnings per diluted share of $0.26. But how sustainable is this growth, and what are the key factors driving Envela's performance? With a gross profit margin of 24.6% and adjusted EBITDA of $9.7 million, is Envela positioned for continued success, and what does their record net cash position of $7.1 million mean for investors like you?

Envela Corporation (ELA) Revenue Analysis

Understanding Envela Corporation's financial health requires a detailed look into its revenue streams. Here’s a breakdown of Envela's revenue performance:

Breakdown of Primary Revenue Sources:

Envela operates through two main segments:

• Consumer Division: This segment focuses on retail stores and online platforms, offering premium brands and luxury hard assets. In 2024, the Consumer Division generated $130.5 million in revenue.
• Commercial Division: This segment provides re-commerce solutions to various clients, including Fortune 500 companies. The Commercial Division's revenue for 2024 was $49.9 million.

Year-over-Year Revenue Growth Rate:

Envela has shown fluctuating revenue growth rates over the past few years:

• 2024: Revenue increased to $180.38 million, a 2.92% growth compared to 2023.
• 2023: Revenue was $175.26 million, reflecting a -4.06% decrease.
• 2022: A significant increase of 29.60%, with revenue reaching $182.69 million.
• 2021: Revenue grew by 23.74% to $140.97 million.
• 2020: An impressive growth of 38.89%, achieving revenue of $113.92 million.

Contribution of Different Business Segments to Overall Revenue:

In 2024, the contributions from each division were:

• Consumer Division: $130.5 million
• Commercial Division: $49.9 million

A more detailed look at the financial performance of each division reveals:

Analysis of Significant Changes in Revenue Streams:

Envela's revenue streams have seen some notable shifts:

• The Commercial Division saw a record revenue in the second quarter of 2024, with $13.3 million, marking a 16.2% increase year-over-year.
• The Consumer Division has been expanding its retail presence, nearly doubling its store locations.
• Despite revenue growth, Envela's overall profitability metrics showed slight deterioration, with annual EPS declining from $0.27 to $0.26.

For more insights into Envela's core values and strategic direction, check out Mission Statement, Vision, & Core Values of Envela Corporation (ELA).

Envela Corporation (ELA) Profitability Metrics

Understanding Envela Corporation's (ELA) profitability is crucial for investors. Profitability metrics provide insights into the company's ability to generate earnings relative to its revenue, assets, and equity. Here's a breakdown of key profitability metrics for Envela, based on the latest available data.

Gross Profit Margin:

• For the full year 2024, Envela reported a gross profit margin of 24.6%. This represents an improvement from 23.8% in 2023.
• The gross profit for the three months ended in September 2024 was $11.5 million, with revenue of $46.9 million, resulting in a gross margin of 24.44% for that quarter.
• Historically, Envela's gross margin has ranged from a low of 15.97% to a high of 25.87% over the past 13 years, with a median of 19.02%.
• The 5-year average growth rate of gross margin for Envela was 6.60% per year.

Operating Profit Margin:

• Envela's operating margin for 2024 was 4.5%.
• For the first quarter of 2024, operating income decreased to $2.3 million, or 5.9% of revenue, compared to $3.2 million, or 6.3% of revenue for the first quarter of 2023.

Net Profit Margin:

• The net profit margin for Envela in 2024 was 3.75%.
• For the first quarter of 2024, net income was $1.9 million, or $0.07 per basic and diluted share, compared to $2.5 million, or $0.09 per basic and diluted share in the first quarter of 2023.

EBITDA and Adjusted EBITDA:

• Envela's EBITDA for the full year 2024 was $9.71 million.
• Adjusted EBITDA for 2024 was $9.7 million, or 5.4% of revenue, compared to $10.1 million, or 5.8% of revenue in 2023.
• For the fourth quarter of 2024, adjusted EBITDA was $2.3 million, or 4.8% of revenue, compared to $1.9 million, or 5.1% of revenue in the prior-year quarter.

Segment Performance:

• The Consumer Division's full-year 2024 revenue was $130.5 million, compared to $129.4 million in 2023. The gross margin was 12.2% of revenue, compared to 12.1% in 2023.
• The Commercial Division achieved record performance in 2024 with revenue of $49.9 million and a gross margin of 57.0%. Net income for this division was $6.7 million in 2024.

Operational Efficiency:

• Envela's revenue per employee is approximately $583,741.84, and income per employee is $21,867.51.
• The company's total asset turnover is 2.384.

Additional Insights:

• Envela's net income for 2024 was $6.76 million.
• The company's 2024 sales growth was 5.069%.

Here is a table summarizing Envela's profitability metrics for 2024:

These metrics provide a comprehensive view of Envela's financial health and profitability trends, essential for making informed investment decisions. It's also worth noting that Envela is focused on enhancing operational efficiencies and innovation, which could drive future profitability. A deeper dive into Envela Corporation's investor profile can provide additional context. Check out: Exploring Envela Corporation (ELA) Investor Profile: Who’s Buying and Why?

Envela Corporation (ELA) Debt vs. Equity Structure

Understanding how Envela Corporation (ELA) strategically manages its debt and equity is crucial for investors. This balance impacts the company's financial stability and growth potential. Here’s a breakdown of key aspects of Envela's approach to financing.

As of the fiscal year 2024, Envela Corporation (ELA) showcases a strategic approach to managing its debt levels. While specific figures for long-term and short-term debt require up-to-date financial reports, analyzing their debt-to-equity ratio provides insight into their financial leverage. Investors often use this ratio to gauge the risk associated with a company's capital structure.

Here’s what to consider regarding Envela's debt and equity:

• Debt Levels: Analyzing both long-term and short-term debt provides a comprehensive view of Envela's financial obligations.
• Debt-to-Equity Ratio: This ratio is a key indicator, revealing the proportion of debt and equity used to finance the company's assets. A ratio that aligns with or outperforms industry standards suggests sound financial management.
• Financing Activities: Staying informed about any recent debt issuances, credit ratings, or refinancing activities is essential for understanding shifts in Envela's capital structure.

Balancing debt and equity is vital for sustainable growth. While debt can fuel expansion, excessive reliance on it can increase financial risk. Equity financing, on the other hand, provides a buffer against market volatility. How Envela navigates this balance reflects its strategic financial planning. To gain more insight into the company’s goals, review their Mission Statement, Vision, & Core Values of Envela Corporation (ELA).

To illustrate the importance of these factors, consider a hypothetical comparison:

In this scenario, Envela's higher debt-to-equity ratio suggests it utilizes more debt relative to equity compared to the industry standard. While this isn't inherently negative, it signals higher financial leverage, which warrants closer scrutiny of their ability to service that debt.

Monitoring these financial aspects enables investors to make well-informed decisions about Envela Corporation (ELA), grounded in a clear understanding of its financial health and strategic direction.

Envela Corporation (ELA) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Envela Corporation (ELA), assessing these metrics provides valuable insights into its financial stability and risk profile.

Assessing Envela Corporation's Liquidity:

• Current and Quick Ratios: These ratios measure a company's ability to cover its short-term liabilities with its short-term assets. A current ratio of more than 1 indicates that a company has more current assets than current liabilities. The quick ratio, which excludes inventory from current assets, provides a more conservative measure of liquidity.
• Analysis of Working Capital Trends: Monitoring the trend of a company's working capital (current assets minus current liabilities) can reveal important insights into its operational efficiency and liquidity management. An increasing working capital balance suggests improved liquidity, while a decreasing balance may indicate potential challenges.
• Cash Flow Statements Overview: Examining a company's cash flow statement provides a comprehensive view of its cash inflows and outflows from operating, investing, and financing activities. Analyzing trends in these cash flows can help assess a company's ability to generate cash, fund investments, and meet its debt obligations.
• Potential Liquidity Concerns or Strengths: By evaluating the above metrics, investors can identify potential liquidity concerns or strengths that may impact a company's financial performance and stock valuation.

Cash Flow Statements Overview (Operating, Investing, and Financing Cash Flow Trends):

An overview of Envela Corporation's cash flow statements provides a detailed look into the company's financial activities. Here's a breakdown:

• Operating Activities: This section reflects the cash generated from the company's core business operations. Positive cash flow from operations indicates that the company is effectively generating cash from its primary activities.
• Investing Activities: This section includes cash flow related to the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E). These activities can provide insights into the company's capital expenditures and investment strategies.
• Financing Activities: This section involves cash flow related to debt, equity, and dividends. Analyzing these activities can reveal how the company is funding its operations and rewarding shareholders.

Here is a sample table illustrating the cash flow activities (Note: Actual data for Envela Corporation should be inserted):

You can find more insights in this detailed analysis: Breaking Down Envela Corporation (ELA) Financial Health: Key Insights for Investors

Envela Corporation (ELA) Valuation Analysis

Determining whether Envela Corporation (ELA) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst opinions. Let's delve into these aspects to provide a clearer picture for investors.

To assess Envela Corporation's valuation, several key ratios are considered:

• Price-to-Earnings (P/E) Ratio: This ratio compares the company's stock price to its earnings per share. A higher P/E ratio might suggest overvaluation, while a lower one could indicate undervaluation, relative to industry peers or historical averages.
• Price-to-Book (P/B) Ratio: This ratio compares the company's market capitalization to its book value of equity. It can help investors determine if they are paying too much for the net assets of the company.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares the company's enterprise value (market capitalization plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It provides a more comprehensive valuation measure, especially when comparing companies with different capital structures.

Analyzing Envela Corporation's stock price trends over the past 12 months (or longer) provides insights into market sentiment and investor confidence. Significant price appreciation might suggest growing optimism, while a declining trend could indicate concerns about the company's prospects. As of April 2025, it's important to review the most recent stock performance data to understand current market dynamics.

Currently, Envela Corporation does not offer a dividend yield, as it does not distribute dividends. Therefore, dividend payout ratios are not applicable in this case.

Another important factor is analyst consensus. Major brokerage firms and investment banks often provide ratings (such as buy, hold, or sell) and price targets for publicly traded stocks. These ratings represent the collective wisdom of financial analysts who closely follow the company and its industry. Analyst consensus can offer valuable insights into how the broader investment community perceives Envela Corporation's valuation.

Keep in mind the Mission Statement, Vision, & Core Values of Envela Corporation (ELA).

Envela Corporation (ELA) Risk Factors

Envela Corporation (ELA) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, market conditions, and specific operational and strategic challenges detailed in their earnings reports and filings.

Here’s an overview of key risk areas:

• Industry Competition: The company operates in competitive markets, including electronics recycling and recommerce. Increased competition could pressure profit margins and reduce market share.
• Regulatory Changes: Environmental regulations are subject to change, potentially increasing compliance costs.
• Market Conditions: Economic downturns can reduce consumer spending, affecting demand for the company's recommerce services. Fluctuations in commodity prices, particularly for precious metals, can impact recycling revenues.

Operational, financial, and strategic risks as highlighted in recent earnings reports or filings include:

• Operational Risks: Disruptions in the supply chain for electronics recycling could affect the availability of materials and increase costs.
• Financial Risks: The company's debt levels and ability to meet financial covenants could impact its financial flexibility. Changes in interest rates could increase borrowing costs.
• Strategic Risks: The success of new business ventures and strategic initiatives is not guaranteed and may require significant investment.

Mitigation strategies and plans (if available) may include:

• Diversification: Expanding into new markets and service offerings to reduce reliance on specific segments.
• Cost Management: Implementing cost-control measures to improve profitability and efficiency.
• Compliance Programs: Maintaining robust compliance programs to address regulatory risks and ensure ethical business practices.
• Strategic Partnerships: Forming alliances to enhance market reach and technological capabilities.

For more insights into Envela Corporation's mission, vision, and core values, you can visit: Mission Statement, Vision, & Core Values of Envela Corporation (ELA).

Envela Corporation (ELA) Growth Opportunities

Envela Corporation operates in two segments: Consumer and Commercial. The Consumer segment focuses on retail stores and online platforms offering premium brands and luxury hard assets, while the Commercial segment delivers re-commerce solutions to various clients, including Fortune 500 companies. Envela's business model reflects a balance between operational agility and strategic market insight. The company's approach combines the resale of high-value assets with recycling technologies and ITAD (IT Asset Disposition) offerings.

Here's an analysis of Envela Corporation's future growth prospects:

• Key Growth Drivers:
• Expansion of retail store locations. Envela nearly doubled its retail store locations, reaching 12 stores by the end of 2024.
• Strategic acquisitions, such as Steven Kretchmer, Inc., to diversify and enhance the Consumer Division.
• Growth in the Commercial Division, particularly in ITAD, driving record adjusted EBITDA. The Commercial division's revenue grew by 8.7% to $49.9 million, and operating income nearly doubled to $8.0 million in 2024.
• Strong performance in the ITAD (IT Asset Disposition) sector, leading to a record adjusted EBITDA of $9.0 million for the commercial division.

Future revenue growth projections and earnings estimates, according to analysts, remain stable. Revenue estimates are projected at $172.71 million for 2024 and $184.00 million for 2025. Earnings estimates are also stable at $0.23 per share for 2024 and $0.36 per share for 2025.

Strategic initiatives and partnerships that may drive future growth:

• Focus on operational excellence, client satisfaction, and innovation.
• Expansion of partnerships with leading retailers and technology companies.
• Continued investment in store-expansion strategy, with plans to grow the footprint to 14 stores.

Envela's competitive advantages that position the company for growth:

• Re-commerce Expertise: Envela has expertise in re-commerce services, operating through its Consumer and Commercial segments. The Consumer segment focuses on luxury hard assets, while the Commercial segment delivers re-commerce solutions to clients.
• Sustainability Focus: Envela extends product lifecycles to reduce resource consumption and carbon emissions.
• Strong Financial Position: Envela has a strong balance sheet with increasing cash and decreasing long-term debt. The company's cash and cash equivalents were $20.6 million as of December 31, 2024, compared to $17.9 million in the previous year.
• Share Repurchase Program: Envela has an active share repurchase program, indicating confidence in its future prospects. In 2024, the company repurchased 916,597 shares for $2.4 million.

Despite a slight deterioration in overall profitability metrics, Envela's strategic initiatives, particularly in the commercial segment and consumer division expansion, represent a bet on future growth. Investors should monitor the maturation of new stores and the continued strength of the commercial segment.

Read more about Envela Corporation's financial health: Breaking Down Envela Corporation (ELA) Financial Health: Key Insights for Investors