Breaking Down Eltek Ltd. (ELTK) Financial Health: Key Insights for Investors

Are you keeping a close watch on Eltek Ltd. (ELTK) and wondering about its financial stability? Let's delve into the critical figures from their 2024 financial results to give you a clearer picture. While revenue remained relatively stable at $46.5 million compared to $46.7 million in 2023, net profit saw a decrease, landing at $4.2 million, or $0.63 per diluted share, down from $6.4 million, or $1.07 per share, the previous year. What does this mean for investors, and what key factors influenced these results? Keep reading to find out!

Eltek Ltd. (ELTK) Revenue Analysis

Understanding Eltek Ltd.'s financial health requires a close examination of its revenue streams. As a global manufacturer and supplier of technologically advanced printed circuit boards (PCBs), Eltek's revenue is derived from several key areas.

Here's an analysis of Eltek's revenue streams:

• Primary Revenue Sources: Eltek's revenue comes primarily from the sale of custom-made PCBs. These include rigid, double-sided, multi-layer PCBs, and flexible circuitry boards catering to diverse industries.
• The company also acts as an agent for the importation of PCBs from South East Asia.
• Eltek serves industries such as:
  • Defense and aerospace
  • Medical
  • Industrial
  • Telecom and networking equipment
  • Contract electronic manufacturers

Year-over-Year Revenue Growth Rate:

Eltek's revenue trends show a slight decrease in 2024:

• 2024 Revenue: $46.5 million
• 2023 Revenue: $46.7 million

This represents a slight decline of $0.2 million, or approximately 0.36%, compared to 2023. However, looking back further, there's been growth in prior years:

• 2023: Revenue of $46.7 million, an increase of 17.77% from 2022.
• 2022: Revenue of $39.65 million, an increase of 17.23% from 2021.

Contribution of Business Segments:

In the last 12 months, the only revenue segment was Electronic Components & Parts contributing US$46.5m.

A breakdown of revenue contribution by market segment reveals:

• Telecommunications: 48.6% of total revenue
• Industrial Electronics: 31.2% of total revenue
• Defense & Aerospace: 12.7% of total revenue
• Other segments: 7.5% of total revenue

Analysis of Significant Changes in Revenue Streams:

Eltek is currently undergoing a strategic transition, expected to continue through mid-2026, including an accelerated $15 million investment plan. This plan aims to enhance manufacturing capabilities and expand annual production capacity to a range of $55 million to $65 million. However, spatial constraints and logistical complexities have led to temporary disruptions and inefficiencies.

Here's a look at some key financial figures for 2024:

• Gross Profit: $10.3 million (22% of revenues), compared to $13.1 million (28% of revenues) in 2023
• Operating Profit: $4.4 million, compared to $7.3 million in 2023
• Net Profit: $4.2 million, or $0.63 per fully diluted share, compared to $6.4 million, or $1.07 per fully diluted share in 2023
• EBITDA: $5.9 million (13% of revenues), compared to $8.6 million (18% of revenues) in 2023

For more detailed insights, you can check out: Breaking Down Eltek Ltd. (ELTK) Financial Health: Key Insights for Investors

Eltek Ltd. (ELTK) Profitability Metrics

Analyzing Eltek Ltd.'s profitability involves examining its gross profit, operating profit, and net profit margins to understand the company's financial health and operational efficiency. Trends in these metrics over time provide insights into the company's ability to manage costs and generate profit from its revenue.

Here's a breakdown of key profitability aspects:

• Gross Profit Margin: This ratio indicates the percentage of revenue remaining after subtracting the cost of goods sold (COGS). A higher gross profit margin suggests that Eltek Ltd. is efficient in managing its production costs.
• Operating Profit Margin: This ratio measures the percentage of revenue remaining after deducting operating expenses (e.g., salaries, rent, and depreciation). It reflects the company's profitability from its core business operations.
• Net Profit Margin: This ratio represents the percentage of revenue that translates into net profit after all expenses, including taxes and interest, are considered. It is a comprehensive measure of overall profitability.

To fully assess Eltek Ltd.'s profitability, it is essential to compare its profitability ratios with industry averages. This benchmark helps determine whether the company is performing better or worse than its peers. Additionally, analyzing the trends in gross margin can reveal how effectively Eltek Ltd. manages its cost of goods sold over time.

For example, a consistent increase in gross margin could indicate improved cost management or pricing strategies. Conversely, a declining gross margin might signal rising production costs or increased competitive pressure.

Here is a sample table illustrating how profitability metrics can be organized and analyzed:

Analyzing operational efficiency involves scrutinizing cost management practices and gross margin trends. Effective cost management directly impacts profitability. For instance, if Eltek Ltd. can reduce its production costs or overhead expenses, it can improve its profit margins without necessarily increasing sales.

Investors should monitor these profitability metrics closely to gain a comprehensive understanding of Eltek Ltd.'s financial performance and its ability to generate sustainable profits. Furthermore, staying informed about who is investing in Eltek Ltd. can provide additional insights into market sentiment and potential future performance. Learn more about investor profiles in this related article: Exploring Eltek Ltd. (ELTK) Investor Profile: Who’s Buying and Why?

Eltek Ltd. (ELTK) Debt vs. Equity Structure

Understanding how Eltek Ltd. (ELTK) finances its operations and growth is crucial for investors. This involves looking at the company's debt levels, its debt-to-equity ratio, and how it strategically uses debt and equity to fund its activities. Let's delve into these aspects to provide a clear picture of Eltek's financial structure. For further insights, you might find this resource helpful: Breaking Down Eltek Ltd. (ELTK) Financial Health: Key Insights for Investors.

As of the fiscal year 2024, a comprehensive overview of Eltek Ltd.'s debt levels reveals the following:

• Long-term Debt: Details regarding Eltek's long-term debt are essential to understanding its long-term financial obligations.
• Short-term Debt: Analyzing short-term debt provides insights into the company's immediate liabilities and liquidity position.

The debt-to-equity ratio is a critical metric for evaluating Eltek's financial leverage. Here's how it works:

• Debt-to-Equity Ratio: This ratio indicates the proportion of debt and equity Eltek uses to finance its assets. A higher ratio suggests greater financial risk, while a lower ratio indicates a more conservative approach.
• Industry Standards: Comparing Eltek's debt-to-equity ratio with industry averages provides context on whether the company's leverage is typical or deviates significantly.

Recent activities in debt management can significantly impact Eltek's financial health:

• Debt Issuances: Any recent issuances of new debt can provide insights into Eltek's financing strategies and investment plans.
• Credit Ratings: Monitoring Eltek's credit ratings from agencies like Standard & Poor's or Moody's helps assess the company's creditworthiness and borrowing costs.
• Refinancing Activity: Refinancing existing debt can improve Eltek's financial flexibility by lowering interest rates or extending repayment terms.

Balancing debt and equity is a strategic decision that affects Eltek's financial stability and growth potential:

• Debt Financing: Utilizing debt can provide Eltek with capital for expansion and investments without diluting equity. However, it also introduces fixed interest payments and the risk of financial distress if not managed carefully.
• Equity Funding: Raising capital through equity, such as issuing shares, strengthens Eltek's balance sheet and provides a buffer against financial downturns. However, it can dilute existing shareholders' ownership.

A detailed table summarizing key debt and equity metrics can offer a consolidated view of Eltek's financial structure. (Note: Specific values for the fiscal year 2024 are needed to complete this table accurately.)

By analyzing these elements, investors can gain a deeper understanding of Eltek Ltd.'s financial strategies and risk profile, enabling more informed investment decisions.

Eltek Ltd. (ELTK) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and long-term liabilities, respectively. For Eltek Ltd. (ELTK), assessing these metrics provides insights into its operational efficiency and financial stability.

Assessing Eltek Ltd.'s Liquidity:

Analyzing Eltek Ltd.'s liquidity involves examining key ratios and cash flow trends that reflect its capacity to cover its immediate financial obligations.

• Current and Quick Ratios: These ratios are essential for evaluating a company's ability to pay off its short-term liabilities with its current assets. The current ratio is calculated by dividing current assets by current liabilities, while the quick ratio excludes inventory from current assets to provide a more conservative measure.
• Analysis of Working Capital Trends: Monitoring working capital trends helps in understanding the operational efficiency of Eltek Ltd. Working capital, which is the difference between current assets and current liabilities, indicates the company's ability to finance its short-term operations.
• Cash Flow Statements Overview: Examining cash flow statements provides insights into the sources and uses of cash. It is usually broken down into three primary activities:

• Operating Cash Flow: Cash generated from the company's core business activities.
• Investing Cash Flow: Cash related to the purchase or sale of long-term assets.
• Financing Cash Flow: Cash from debt, equity, and dividends.

Potential Liquidity Concerns or Strengths:

By carefully evaluating these metrics, potential liquidity concerns or strengths can be identified, offering a clearer picture of Eltek Ltd.'s financial resilience. Investors and stakeholders can use this information to make informed decisions about the company's prospects.

For further insights into Eltek Ltd.'s investor profile, consider exploring: Exploring Eltek Ltd. (ELTK) Investor Profile: Who’s Buying and Why?

Eltek Ltd. (ELTK) Valuation Analysis

Determining whether Eltek Ltd. (ELTK) is overvalued or undervalued involves examining several key financial ratios and indicators.

Here's a breakdown:

• Price-to-Earnings (P/E) Ratio:
• The trailing P/E ratio is 13.54.
• The forward P/E ratio is 8.36.
• Price-to-Book (P/B) Ratio:
• The P/B ratio is 1.39.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio:
• The EV/EBITDA ratio is 6.93 according to one source, while another indicates 7.76.

These ratios provide insights into how the market values Eltek Ltd. (ELTK) relative to its earnings, book value, and cash flow. A lower P/E ratio compared to industry peers might suggest undervaluation, while a higher P/B ratio could indicate overvaluation. The EV/EBITDA ratio helps to assess the company's total value (equity plus debt) against its earnings before interest, taxes, depreciation, and amortization.

Eltek Ltd. (ELTK)’s stock price has experienced some volatility over the past year.

• 52-Week Price Change: The stock price has decreased by approximately -16.78% in the last 52 weeks.
• 52 Week High / Low: The 52 week high is $12.47 and the 52 week low is $7.65.

This indicates a downward trend in the stock price over the past year. However, it's important to consider broader market conditions and industry-specific factors that may have influenced this performance. The stock price as of April 2025 is around $8.50.

Eltek Ltd. (ELTK) does offer a dividend, which can be an attractive feature for investors seeking income.

• Dividend Yield: The dividend yield is approximately 2.30%.
• Annual Dividend: The annual dividend paid is $0.19 per share.
• Ex-Dividend Date: The next ex-dividend date is April 22, 2025.
• Payout Ratio: The payout ratio is 30.16%, suggesting that the company distributes a reasonable portion of its earnings as dividends.

Dividend yield and payout ratios are essential for assessing the sustainability and attractiveness of the company's dividend policy.

Based on available data, analyst consensus on Eltek Ltd. (ELTK) stock valuation is limited. The general sentiment and price targets from analysts can offer valuable perspectives on the stock's potential upside or downside.

Here is a summary of valuation measures for Eltek Ltd. (ELTK):

These metrics, combined with stock price trends and dividend information, offer a comprehensive view for investors to evaluate whether Eltek Ltd. (ELTK) is currently overvalued or undervalued. According to one source, the Fair Value of Eltek Ltd (ELTK) is $15.74 USD as of 2025-04-19. With the market price of $8.53 USD, investing in ELTK stocks now will result in a potential gain of 84.54%.

To gain more insights into Eltek Ltd. (ELTK), explore: Mission Statement, Vision, & Core Values of Eltek Ltd. (ELTK).

Eltek Ltd. (ELTK) Risk Factors

Assessing the financial health of Eltek Ltd. (ELTK) requires a clear understanding of the risks the company faces, both internally and externally. These risks can significantly impact Eltek's financial performance and stability.

Key risks impacting Eltek Ltd. (ELTK) include:

• Industry Competition: The electronics manufacturing services (EMS) industry is highly competitive. Eltek faces competition from numerous global and regional players. Intense competition can lead to pricing pressures, reduced profit margins, and loss of market share.
• Regulatory Changes: Changes in environmental regulations, trade policies, and other government regulations can affect Eltek’s operations and costs. Compliance with evolving regulations requires ongoing investment and adaptation.
• Market Conditions: Economic downturns, fluctuations in demand for electronic products, and other market conditions can impact Eltek’s revenue and profitability. Global economic uncertainty poses a continuous risk to business performance.

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

• Supply Chain Disruptions: Disruptions in the global supply chain can affect Eltek's ability to procure necessary materials and components, leading to production delays and increased costs.
• Technological Obsolescence: Rapid technological advancements in the electronics industry can render Eltek’s existing technologies and capabilities obsolete, requiring continuous investment in research and development.
• Customer Concentration: Dependence on a small number of key customers can pose a significant risk. Loss of a major customer could substantially reduce revenue and profitability.

Mitigation strategies or plans (if available) often include:

• Diversification: Diversifying the customer base and expanding into new markets can reduce dependence on specific customers or regions.
• Innovation: Investing in research and development to stay ahead of technological advancements and maintain a competitive edge.
• Operational Efficiency: Implementing measures to improve operational efficiency, reduce costs, and enhance profitability.

Here's a look at potential risk mitigation strategies:

Understanding these risks and the strategies to mitigate them is crucial for investors assessing Eltek's long-term financial health and investment potential. For further insights, explore Exploring Eltek Ltd. (ELTK) Investor Profile: Who’s Buying and Why?.

Eltek Ltd. (ELTK) Growth Opportunities

Eltek Ltd. (ELTK), a global manufacturer of technologically advanced PCB solutions, faces a dynamic future shaped by strategic initiatives and market trends. Here's a breakdown of the key growth prospects for investors:

Key Growth Drivers:

• Strategic Transition and Investment Plan: Eltek is currently undergoing a strategic transition expected to continue through mid-2026. This includes an accelerated $15 million investment plan. The primary goal is to establish advanced manufacturing capabilities, enhance technological proficiency, and expand annual production capacity to a range of $55 million to $65 million.
• Defense and Aerospace Market: Sustained demand is evident in the defense and aerospace sectors, with increasing defense budgets in Europe creating new opportunities. Eltek strategically focuses on securing long-term contracts in these sectors to enhance production planning and profitability.
• Medical Devices Market: Eltek continues to witness robust demand in the medical devices sector.
• Global PCB Industry Shifts: Eltek is positioned to benefit from shifts in the global PCB industry, particularly in the defense, aerospace, and medical markets. These shifts are driven by US-China trade tensions and increased defense spending worldwide.
• Expansion in Workforce and Machinery Investment: Expansion in workforce and machinery investment, along with launching new coating lines, aims to enhance capacity and meet high product demand.

Future Revenue Growth Projections and Earnings Estimates:

• Analysts forecast Eltek to grow earnings and revenue by 32.2% and 11.7% per annum respectively, with EPS expected to grow by 31.6% per annum.
• Revenue for 2024 was $46.5 million, a slight decline of $0.2 million compared to 2023.
• For the full year 2024, Eltek reported revenue of $46.5 million, slightly down from $46.7 million in 2023.
• The company is targeting market opportunities in the Defense, Aerospace, and Medical markets, driven by US-China trade tensions and increased global defense spending.
• Eltek maintains $46.5M revenue while launching strategic expansion to boost production capacity to $65M by 2026, targeting growing defense and aerospace PCB market opportunities

Strategic Initiatives and Partnerships:

• Strategic Partnerships: Eltek has collaboration with leading technology companies to develop next-generation PCB solutions.
• Operational Improvements: Eltek is focused on implementation of operational improvements.
• New Manufacturing Space: By the end of 2024, Eltek planned to open a new 15,000 sq. ft. manufacturing space, including a state-of-the-art full Solder Mask Application line.
• Strategic investments: These strategic investments are integral to Eltek's broader Company vision. By focusing on operational efficiency and staying at the forefront of technological advancements, Eltek aims to not only meet but exceed the evolving needs of its customers.

Competitive Advantages:

• Certifications: Eltek holds several key certifications including ITAR compliance, AS-9100, and NADCAP for electronics, which underscore its adherence to international quality and safety standards.
• Custom Solutions: Eltek differentiates its products by leveraging advanced technology, maintaining stringent quality assurance processes, and offering custom-made, innovative PCB solutions tailored to the specific needs of its customers.
• Advanced Technology: Eltek leverages advanced technology in rigid, flex-rigid, and high-density interconnect (HDI) PCB production.
• R&D Investments: The company invests heavily in research and development (R&D) to stay ahead of technological trends and maintain its competitive edge.

While Eltek is making significant investments to increase production capacity and improve its technology, the company is strategically positioned to capitalize on industry trends and maintain its competitive edge.

To gain more insight into the investors of Eltek Ltd. (ELTK), visit: Exploring Eltek Ltd. (ELTK) Investor Profile: Who’s Buying and Why?