Is the Eastman Kodak a Purchase Beneath $5?


The Eastman Kodak Firm (KODK) in Rochester, NY offers {hardware}, software program, consumables and providers to clients within the business print, packaging, publishing, manufacturing, leisure and business movies and shopper merchandise markets worldwide. KODK shares have misplaced 52.5% in value over the previous six months and 31.2% previously six months. Nevertheless, the inventory has gained marginally year-over-year to shut yesterday’s buying and selling session at $4.72.

KODK reached its 52-week low of $3.46 on January 28.

On July 28, 2020, the corporate received a $765 million authorities mortgage to arrange the pharmaceutical division manufacturing supplies for generic medicine. Nevertheless, the deal was placed on maintain following allegations of potential insider buying and selling on each the enterprise and authorities sides. New York’s legal professional common launched an investigation and ordered Kodak’s chief government officer and common counsel to testify in mid-2021. Kodak was being investigated by a number of congressional committees, the US Securities and Trade Fee. As well as, the regulation workplaces of Frank R. Cruz launched an investigation towards KODK’s board of administrators over potential claims about whether or not the board had breached its fiduciary duties to shareholders.

Here is what may form KODK’s efficiency within the close to time period:

bleak previous efficiency

KODK’s income has declined by 3% CAGR within the final three years and seven.1% within the final 5 years. Its web revenue has declined at a CAGR of 26.7% within the final three years, whereas its EPS has decreased at a CAGR of 39%. Furthermore, its leveraged FCF declined at a CAGR of 24.1% over the identical interval.

Monetary progress within the final reported quarter

KODK’s whole income for the third quarter ended September 30 elevated 13.9% year-on-year to $287 million. Its gross revenue was $43 million, up 38.7% from its year-ago worth. And the corporate’s web revenue got here in at $8 million, indicating a major enchancment from its damaging year-ago worth of $445 million. Its EPS rose 24.4% year-over-year to $80.60.

blended profitability

KODK’s 15.61% gross revenue margin is 68.5% beneath the 49.58% {industry} common. Plus, its 4.39% and three.00% associated web revenue and leveraged FCF margins are beneath the {industry} averages of 30.9% and 72.2%.

Nevertheless, KODK’s 37.07% and 9.19% respective ROEs and ROTCs evaluate with the 8.00% and 4.97% {industry} averages.

low-industry valuation

By way of trailing 12-month P/E, KODK is presently buying and selling at 8.93x, which is 67.7% decrease than the 27.67x {industry} common. Plus, its 0.45 trailing-12-month EV/gross sales ratio of three.98 is 88.8% beneath the {industry} common. and its 0.33x trailing-12-month value/gross sales 3.77x is 91.2% beneath the {industry} common.

Energy scores replicate unsure prospects

The KODK has an total C ranking, which converts to impartial in our proprietary POWR ranking system. The POWR ranking is calculated by contemplating 118 various factors, every issue weighted to an optimum diploma.

The inventory has a grade of D for stability, comparable to its beta of 5.

KODK has a C grade for high quality. Its blended profitability justifies this grade.

Amongst 47 shares within the Know-how – {Hardware} {industry}, KODK is ranked #29.

Along with what I mentioned above, one can take a look at KODK grades for worth, progress, momentum and sentiment right here.

Know-how – See the highest rated shares within the {hardware} {industry} right here.

floor degree

The corporate struggled within the digital age of images and argued that analog images was higher than digital. Whereas the corporate is increasing its digital capabilities, it faces stiff competitors from globally established digital imaging corporations. KODK has misplaced the market dominance it as soon as loved. The corporate’s income and EPS have declined over time. Though it delivered regular progress in its most up-to-date quarter, analysts count on its EPS to say no 12% per yr over the following 5 years. Thus, it might be clever to attend for its prospects to enhance earlier than investing in a inventory.

How does Eastman Kodak Firm (KODK) stack up towards its friends?

Whereas KODK has an total POWR ranking of C, none evaluate to its {industry} friends, AstroNova, Inc. (ALOT) Canon Inc. (CAJ), which has an A (robust purchase) ranking.


KODK shares remained unchanged in premarket buying and selling on Friday. 12 months-over-year, the KODK has gained 0.85%, in comparison with a rise of -7.98% over the benchmark S&P 500 index throughout the identical interval.

In regards to the Writer: Subhashree Kari

Subhashree’s eager curiosity in monetary devices impressed her to pursue a profession as an funding analyst. After incomes a grasp’s diploma in economics, he gained information of fairness analysis and portfolio administration in FinLatics. Extra…

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