Shares of Enviri (NVRI, Financial) have dropped by 23.71% recently, reflecting negative market sentiment following the company's lackluster third-quarter earnings. The decline in stock price is attributed to the company's inability to meet revenue and EBITDA expectations, which were below analyst forecasts.
Enviri Corp (NVRI, Financial), trading at $7.66, faces significant financial challenges as highlighted by several warning signs. The company displays a severe financial stress signal with an Altman Z-Score of 1.98, which places it in the grey area, indicating potential risk if it continues to deteriorate. Additionally, the long-term decline in both gross and operating margins raises further concerns about its profitability. The gross margin is down by an average of 4.4% per year, and the operating margin has declined at an average rate of 6.7% over five years.
The company’s financial health is compromised, with a market capitalization of $613.65 million and a price-to-book ratio of 1.26. Notably, Enviri continues to issue new debt, totaling $18.396 million over the past three years, which impacts its Altman Z-Score and overall financial stability. Despite these challenges, the Beneish M-Score of -2.69 indicates that Enviri is unlikely to be involved in financial manipulation.
Enviri’s GF Value is estimated at 9.3, categorizing the stock as modestly undervalued. This might provide a cushion for investors who believe in the company's potential turnaround. However, the company's growth prospects appear limited, with low predictability and a downward trend in several key financial metrics, including a negative trailing twelve months EPS of -1.21.
The stock is characterized by high volatility, with a beta of 1.91, indicating that it is more volatile than the market. The company's financial leverage is evident, with a debt-to-equity ratio of 3.18, which is concerning given the company’s current cash-to-debt ratio of only 0.07.
Investors should approach Enviri (NVRI, Financial) with caution, given its financial challenges and lack of near-term catalysts. For more information on the GF Value of NVRI, please visit this GF Value page.
