Friday was a disappointment for Eastman Kodak Company investors, who watched their shares sink by -2.1% to a price of $5.13. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.
Eastman Kodak Company Is Potentially Undervalued and Trades Below Its Graham Number:
Eastman Kodak Company provides hardware, software, consumables, and services to customers in the commercial print, packaging, publishing, manufacturing, and entertainment markets worldwide. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 22.33 and an average price to book (P/B) ratio of 3.12. In contrast, Eastman Kodak Company has a trailing 12 month P/E ratio of 9.9 and a P/B ratio of 0.38.
Eastman Kodak Company has moved 14.3% over the last year compared to 14.6% for the S&P 500 — a difference of -0.0%. Eastman Kodak Company has a 52 week high of $7.24 and a 52 week low of $2.78.
Stable Revenues With Increasing Reinvestment in the Business:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $1,242 | $1,029 | $1,150 | $1,205 |
| Gross Margins | 14.6% | 13.1% | 14.3% | 14.1% |
| Operating Margins | -5.3% | -6.2% | -4.0% | -1.3% |
| Net Margins | 9.34% | -52.58% | 2.09% | 2.16% |
| Net Income (MM) | $116 | -$541 | $24 | $26 |
| Net Interest Income (MM) | -$16 | -$12 | -$33 | -$40 |
| Earnings Per Share | $2.23 | -$9.77 | $0.3 | $0.52 |
| EPS Growth | n/a | -538.12% | 103.07% | 73.33% |
| Diluted Shares (MM) | 43 | 57 | 79 | 79 |
| Free Cash Flow (MM) | -$3 | -$52 | -$68 | -$147 |
| Capital Expenditures (MM) | -$15 | -$17 | -$21 | -$31 |
| Net Current Assets (MM) | -$428 | -$353 | -$387 | -$360 |
| Current Ratio | 1.92 | 2.12 | 2.61 | 2.32 |
| Long Term Debt (MM) | $105 | $14 | $252 | $316 |
| Net Debt / EBITDA | -0.52 | 0.52 | -1.04 | 1.15 |
Eastman Kodak Company has stable revenues and increasing reinvestment in the business, an excellent current ratio, and healthy leverage. However, Eastman Kodak Company's financial statements include several red flags such as slimmer gross margins than its peers, consistently negative margins with a positive growth rate, and declining EPS growth. Additionally, the firm has negative and highly variable cash flows.
