One-glance verdict
Undervalued
$5.96 our estimate vs market $3.02
49% below our estimate, below the bear case
Fundamentals snapshot
Art's-Way Manufacturing Co., Inc.
ARTW · NCM · Industrials · Farm & Heavy Construction Machinery
Current price
$3.02
52-week range
$2.05 - $4.17
Market cap
$15.71M
Balance sheet
Distressed
0.79x Concerning
Net debt $6.43M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
1 Risk
2 rewards · 1 risks
- Reward Revenue grew 13.1% last year.
- Reward Free cash flow was positive in 4/10 years.
- Risk Return on equity was -0.2% last year — the company lost money on shareholders' equity.
What this company does
Art's-Way Manufacturing Co., Inc.
Art's-Way Manufacturing makes and sells specialized farm equipment, like feed mixers and beet harvesters, as well as custom modular buildings for research labs and large-scale farming. The company's success is tied to the financial health of two different customer groups: farmers buying machinery and institutions needing specialized buildings.
How the company got here
Art's-Way began in 1956 when an Iowa farmer named Arthur Luscombe invented a new piece of farm equipment called a grinder mixer to process animal feed on his farm. [2, 4, 5] Neighboring farmers wanted one too, and his invention became so popular that he started a company to build and sell it. [6] Over the years, the company grew by adding more types of farm machinery, often by buying other companies that made specialized equipment like sugar beet harvesters and manure spreaders. [1, 7] In 1974, it became a public company, meaning people could buy shares of it, and in 2006 it expanded into making specialized buildings. [1, 3]
What it actually does
Art's-Way is a manufacturing company that builds two main types of products. First, it makes heavy-duty, specialized machinery for farming, like the equipment used to harvest crops, feed livestock, and manage manure. [1, 2] Second, it designs and constructs entire buildings that are built in sections at their factory and then assembled on-site. These aren't houses, but rather highly specialized structures like scientific laboratories for research or customized buildings for raising farm animals. [1]
Agricultural Products
This is the original and largest part of the company's business, tracing back to its very first grinder mixer, which is still its top-selling product. [6, 7] This division builds a variety of specialized machines that help farmers do their jobs, such as processing feed for animals, spreading manure for fertilizer, and harvesting sugar beets. [2] The customers are farmers and agricultural businesses who buy the equipment through a network of independent dealers. [7] This segment forms the foundation of the company's sales.
Modular Buildings
This is a newer and growing part of the business, which operates under the name Art's-Way Scientific. [1, 3] It designs and builds specialized, high-tech buildings for research and agriculture, such as containment labs for pharmaceutical companies or facilities for housing pigs. [1] These buildings are produced in modules (or sections) in a factory and then delivered and installed where the customer needs them. Customers include universities, government agencies, and private research companies who need very specific and controlled environments for their work. [1]
What management is betting on now
The company is focused on fulfilling a strong order book for its specialized buildings, with enough projects lined up to keep that division busy. [10] Management has noted that sales are growing for both agricultural buildings, thanks to strong prices for livestock, and for scientific research facilities. [10] They continue to express optimism about future opportunities and are concentrating on product quality and innovation for their customers in both the agriculture and research markets. [10] The company also has a long history of acquiring other businesses to add new products, a strategy that helps it diversify (not putting all its eggs in one basket).
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$180.54K
FY2024 Q4
$1.09M
FY2025 Q1
$-184.53K
FY2025 Q2
$1.22M
FY2025 Q3
$-1.53M
FY2025 Q4
$-1.04M
FY2026 Q1
$-28.02K
FY2026 Q2
$21.38K
Revenue
$7.85M
Net income
$173.48K
Diluted EPS
—
Operating cash flow
$362.01K
Free cash flow
$21.38K
Fetching…
Sources
Revenue
$6.64M
Net income
$196.44K
Diluted EPS
0.04
Operating cash flow
$148.40K
Free cash flow
$-28.02K
Fetching…
Sources
Revenue
$5.07M
Net income
$-645.52K
Diluted EPS
-0.13
Operating cash flow
$-889.15K
Free cash flow
$-1.04M
Fetching…
Sources
Revenue
$6.43M
Net income
$254.11K
Diluted EPS
0.05
Operating cash flow
$-1.27M
Free cash flow
$-1.53M
Fetching…
Sources
Revenue
$6.34M
Net income
$1.48M
Diluted EPS
0.29
Operating cash flow
$1.35M
Free cash flow
$1.22M
Fetching…
Sources
Revenue
$5.14M
Net income
$-55.76K
Diluted EPS
-0.01
Operating cash flow
$-101.81K
Free cash flow
$-184.53K
Fetching…
Sources
Revenue
$6.17M
Net income
$831.96K
Diluted EPS
0.17
Operating cash flow
$1.20M
Free cash flow
$1.09M
Fetching…
Sources
Revenue
$5.88M
Net income
$-26.20K
Diluted EPS
-0.01
Operating cash flow
$282.36K
Free cash flow
$180.54K
Fetching…
Sources
Is it cheap or expensive?
Fair value $5.96 vs current price $3.02
Our most-likely fair value is $5.96 a share — about 97.3% above today's price of $3.02, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $6.4M. Interest coverage 0.8x.
Net debt
$6.43M
Interest coverage
0.79x
Art's-Way Manufacturing Co., Inc.'s profit covers its interest bill about 0.8 times over. and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
ARTW
BASELINE
Art's-Way Manufacturing Co., Inc.
Total debt $6.44M Interest coverage 0.79x This is the baseline the peer rows are being compared against.
Total debt $2.89B Interest coverage 5.68x +620% vs ARTW Carries about 7.2x more debt cushion than ARTW.
Total debt $278.86M Interest coverage 10.19x +1,191% vs ARTW Carries about 12.9x more debt cushion than ARTW.
Total debt $48.47B Interest coverage 2.65x +236% vs ARTW Carries about 3.4x more debt cushion than ARTW.
Total debt $895.85M Interest coverage -0.06x -100% vs ARTW This peer has almost no interest-payment cushion compared with ARTW.
Total debt $26.31B Interest coverage 1.89x +140% vs ARTW Carries about 2.4x more debt cushion than ARTW.
What you should know
The case for and against ARTW
2 Rewards
1 Risk
Rewards
-
Revenue grew 13.1% last year.
-
Free cash flow was positive in 4/10 years.
Risks
-
Return on equity was -0.2% last year — the company lost money on shareholders' equity.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
—
Forward P/E
—
P/B
1.14x
P/S
0.60x
EV/EBITDA
18.59x
PEG ratio
2.77x
Profitability
How much profit each dollar creates
Gross margin
25.6%
Operating margin
3.6%
Net margin
-0.1%
ROE
-0.2%
ROA
1.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.47x
Current ratio
2.17x
Quick ratio
0.48x
Total debt
$6.44M
Total cash
$5.97K
Growth
How the business has been compounding
Revenue TTM
$25.99M
Revenue 5Y CAGR
-2.1%
EPS TTM
-0.01
EPS 5Y CAGR
115.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$-1.65M
Free CF TTM
$-1.53M
FCF margin
-5.9%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
2015-02-10