EMCORE Corporation revenue growth accelerated to 26.2% in FY2020 vs. 1.9% a year earliner
11/30/2020 • About EMCORE Corporation (
$EMKR) • By InTwits
EMCORE Corporation reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EMCORE Corporation motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 was 0.0% while average EBITDA Margin was -4.9% for the sames years
- EMCORE Corporation has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.6%. At the same time it's a lot of higher than industry average of 3.7%.
- CAPEX is quite volatile: $5m in FY2020, $11m in FY2019, $7m in FY2018, $10m in FY2017, $6m in FY2016
- The company has unprofitable business model: ROIC is -6.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
EMCORE Corporation's Revenue surged on 26.2%. Revenue growth showed acceleration in FY20Q4 - it increased 38.0% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.1 pp from 27.6% to 28.7% in FY2020.
Gross Margin jumped on 15.0 pp from 17.3% to 32.3% in FY2020. SG&A as a % of Revenue dropped on 14.4 pp from 36.8% to 22.4% in FY2020.
Net Income margin surged on 34.9 pp from -41.2% to -6.4% in FY2020. During the last 5 years Net Income margin bottomed in FY2019 at -41.2%.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 4.1%. CAPEX/Revenue decreased on 3.7 pp from 7.8% in FY2017 to 4.1% in FY2020. It's average level of CAPEX/Revenue for the last three years was 8.1%. The company has spent a lot to CAPEX (1,290% of EBITDA) to secure its growth.
Return on investment
The company operates at negative ROIC (-6.8%) and ROE (-9.3%). ROIC jumped on 30.9 pp from -37.7% to -6.8% in FY2020. ROE jumped on 29.9 pp from -39.2% to -9.3% in FY2020.
Leverage (Debt)
Debt level is -26.2x Net Debt / EBITDA and 60.6x Debt / EBITDA. Debt surged on 286% while cash surged on 40.9%.
EMCORE Corporation has no short term refinancing risk: cash is higher than short term debt (3,063.5%).
Management team
The company's CEO is Jeffrey Rittichier "Jeff". Jeffrey Rittichier "Jeff" has 6 years tenure with the company. Thomas P Minichiello "Tom" is a the company's CFO. Thomas P Minichiello "Tom" has spent 1 year at the company.
Financial and operational results
FY ended 09/30/2020
EMCORE Corporation ($EMKR) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 92.0 | 122.9 | 85.6 | 87.3 | 110.1 | 26.2% |
| Gross Profit | 31.0 | 42.5 | 18.5 | 15.1 | 35.6 | 135.8% |
| SG&A | 20.7 | 22.2 | 21.2 | 32.1 | 24.6 | -23.3% |
| EBITDA | 5.4 | 11.5 | -12.7 | -29.0 | 0.4 | |
| Net Income | 8.3 | 8.2 | -17.5 | -36.0 | -7.0 | |
Balance Sheet
|
|---|
| Cash | 63.9 | 68.3 | 63.1 | 21.6 | 30.4 | 40.9% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 5.5 | 1.0 | -82.0% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 20.2 | |
Cash flow
|
|---|
| Capex | 5.8 | 9.6 | 6.6 | 10.8 | 4.5 | -58.1% |
Ratios
|
|---|
| Revenue growth | 12.6% | 33.6% | -30.3% | 1.9% | 26.2% | |
| EBITDA growth | -446.8% | 111.2% | -210.4% | 128.4% | -101.2% | |
|
|---|
| Gross Margin | 33.6% | 34.6% | 21.6% | 17.3% | 32.3% | 15.0% |
| EBITDA Margin | 5.9% | 9.4% | -14.8% | -33.2% | 0.3% | 33.5% |
| SG&A, % of revenue | 22.5% | 18.1% | 24.8% | 36.8% | 22.4% | -14.4% |
| Net Income Margin | 9.0% | 6.7% | -20.4% | -41.2% | -6.4% | 34.9% |
| CAPEX, % of revenue | 6.3% | 7.8% | 7.7% | 12.4% | 4.1% | -8.3% |
|
|---|
| ROIC | 2.4% | 6.7% | -15.3% | -37.7% | -6.8% | 30.9% |
| ROE | 6.8% | 7.2% | -15.3% | -39.2% | -9.3% | 29.9% |
| Net Debt/EBITDA | -11.7x | -5.9x | | | -26.2x |
EMCORE Corporation ($EMKR) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 25 | 24 | 27 | 34 | | 6.2% | 9.7% | 58.3% | 38.0% |
| EBITDA | 1 | -4 | 0 | 3 | | - | - | - | - |
| Net Income | -1 | -5 | -1 | 1 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 15 | 22 | 29 | 30 | | -73.2% | -56.5% | 43.9% | 40.9% |
| Short Term Debt | 5 | 1 | 1 | 1 | | - | - | - | -82.0% |
| Long Term Debt | 4 | 14 | 14 | 20 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 29.3% | 26.9% | 33.8% | 37.2% | | 5.1% | 0.2% | 12.3% | 38.1% |
| EBITDA Margin | 3.2% | -14.9% | 1.6% | 9.1% | | 20.8% | 2.9% | 50.5% | 60.4% |
| Net Income Margin | -5.2% | -21.3% | -4.7% | 2.1% | | 17.8% | 1.7% | 56.1% | 63.7% |
Peers in Communications Equipment
Below you can find EMCORE Corporation benchmarking vs. other companies in Communications Equipment industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Resonant Inc. ($RESN) | - | 116.2% | -19.8% | 40.3% | 329.9% |
| Franklin Wireless Corp ($FKWL) | - | -18.8% | -38.1% | 21.3% | 105.9% |
| Ribbon Communications Inc. ($RBBN) | - | 30.6% | 75.2% | -2.6% | 49.8% |
| Inseego Corp. ($INSG) | - | -10.0% | -7.7% | 8.4% | 43.0% |
| Casa Systems, Inc. ($CASA) | - | 11.2% | -15.5% | -5.0% | 39.3% |
| |
|---|
| Median (35 companies) | 7.5% | 5.1% | 3.5% | 3.7% | 2.1% |
|---|
| EMCORE Corporation ($EMKR) | - | 33.6% | -30.3% | 1.9% | 26.2% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| F5 Networks, Inc. ($FFIV) | 83.1% | 83.1% | 83.3% | 84.1% | 82.6% |
| Radware Ltd. ($RDWR) | 81.8% | 81.3% | 82.2% | 82.1% | 82.0% |
| Radcom Ltd. ($RDCM) | 69.6% | 71.8% | 74.0% | 70.0% | 71.4% |
| AudioCodes Ltd. ($AUDC) | 60.7% | 62.4% | 62.8% | 47.4% | 67.9% |
| Arista Networks, Inc. ($ANET) | 64.0% | 64.5% | 63.8% | 64.1% | 63.9% |
| |
|---|
| Median (33 companies) | 43.9% | 41.7% | 41.2% | 44.3% | 46.8% |
|---|
| EMCORE Corporation ($EMKR) | 33.6% | 34.6% | 21.6% | 17.3% | 32.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| InterDigital, Inc. ($IDCC) | 73.6% | 67.3% | 41.9% | 37.5% | 39.5% |
| EchoStar Corporation ($SATS) | 40.3% | 38.1% | 37.4% | 36.4% | 35.0% |
| Arista Networks, Inc. ($ANET) | 23.3% | 29.8% | 14.0% | 35.7% | 33.1% |
| Motorola Solutions, Inc. ($MSI) | 22.2% | 25.5% | 22.0% | 26.7% | 25.9% |
| F5 Networks, Inc. ($FFIV) | 30.3% | 29.9% | 30.1% | 26.2% | 22.9% |
| |
|---|
| Median (32 companies) | 5.5% | 6.0% | 5.4% | 5.0% | 9.3% |
|---|
| EMCORE Corporation ($EMKR) | 5.9% | 9.4% | -14.8% | -33.2% | 0.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Resonant Inc. ($RESN) | 132.5% | 124.8% | 245.2% | 109.7% | 22.3% |
| EchoStar Corporation ($SATS) | 39.9% | 30.9% | 26.5% | 22.2% | 21.7% |
| KVH Industries, Inc. ($KVHI) | 3.2% | 8.0% | 9.3% | 7.9% | 8.9% |
| Harmonic Inc. ($HLIT) | 3.7% | 3.2% | 1.7% | 2.6% | 8.5% |
| Applied Optoelectronics, Inc. ($AAOI) | 19.0% | 17.5% | 26.9% | 15.1% | 6.7% |
| |
|---|
| Median (32 companies) | 1.9% | 1.8% | 1.6% | 2.4% | 2.0% |
|---|
| EMCORE Corporation ($EMKR) | 6.3% | 7.8% | 7.7% | 12.4% | 4.1% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Franklin Wireless Corp ($FKWL) | 12.2% | 4.7% | -14.9% | -13.0% | 37.5% |
| Motorola Solutions, Inc. ($MSI) | 26.4% | 39.5% | 35.3% | 34.0% | 26.4% |
| Arista Networks, Inc. ($ANET) | 25.7% | 33.9% | 14.5% | 33.3% | 23.5% |
| AudioCodes Ltd. ($AUDC) | 6.1% | 8.6% | 16.1% | -7.7% | 20.8% |
| F5 Networks, Inc. ($FFIV) | 43.1% | 46.9% | 47.9% | 34.1% | 16.5% |
| |
|---|
| Median (35 companies) | 2.2% | 2.1% | 0.7% | 1.2% | 2.3% |
|---|
| EMCORE Corporation ($EMKR) | 2.4% | 6.7% | -15.3% | -37.7% | -6.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inseego Corp. ($INSG) | - | - | 3.9x | 82.5x | 26.9x |
| CommScope Holding Company, Inc. ($COMM) | 4.3x | 4.6x | 4.4x | 27.0x | 10.5x |
| Harmonic Inc. ($HLIT) | - | - | 3.4x | 1.9x | 6.5x |
| Ribbon Communications Inc. ($RBBN) | -17.2x | - | - | - | 3.5x |
| Casa Systems, Inc. ($CASA) | -0.2x | 0.3x | 0.2x | 32.1x | 3.2x |
| |
|---|
| Median (24 companies) | -0.8x | -0.6x | -0.1x | -0.3x | -0.3x |
|---|
| EMCORE Corporation ($EMKR) | -11.7x | -5.9x | - | - | -26.2x |
