Electro Scientific Industries Inc versus Magal Security Systems Ltd. Head to Head Compare

Date Published:

This is a head to head compare of Electro Scientific Industries Inc (NASDAQ:ESIO) and Magal Security Systems Ltd. (NASDAQ:MAGS) . We will compare the two companies on revenue growth, earnings, revenue per employee, operating margins, free cash flow and valuation. The head to head compare assigns 100 points in total.

Before we dive into the analysis, we will look at the stock returns for each company over the last three months, six months and the last year. The stock returns do not impact the head to head compare scores which are focused on the fundamentals of each company, but ultimately stock returns are are still a critical piece to a full analysis and compare.

Stock Returns
Symbol 3-Months 6-Months One-Year Fundamentals
ESIO +3.5% +25.0% -9.1%
MAGS +15.1% +44.5% +37.4%

Magal Security Systems Ltd. has a higher fundamental rating then Electro Scientific Industries Inc which has an impact on the head-to-head comparison. The CML Star Rating is an objective, quantifiable measure of a company's operating and financial condition. The rating is computed by measuring numerous elements of the company's current financial data and their associated changes over time.

Now, let's dive into the two companies to compare them.

➤ Income Statement
First we turn to the income statement and compare revenue, earnings and revenue per employee for both companies. We note that simple revenue comparisons do not impact the rating.

Electro Scientific Industries Inc has larger revenue in the last year than Magal Security Systems Ltd.. Raw revenue comps do not affect the head to head rating.

MAGS is showing a profit while ESIO has negative earnings over the last year.

Net Income

ESIO generates notably larger revenue per employee ($283,000) than MAGS ($194,000).

Revenue per Employee
($ Millions)

➤ Margins
Next we create some derived metrics to compare the the amount of revenue earned per dollar of expense and the amount of free cash flow earned per dollar of revenue. Margins are one of the fairest ways to compare companies since they remove some of the bias of large versus small numbers.

Magal Security Systems Ltd. generates $1.08 in revenue for every $1 of expense, while Electro Scientific Industries Inc generates an operating loss with just $0.78 in revenue per $1 of expense.

Revenue per Dollar of Expense

MAGS generates $0.14 in levered free cash flow for every $1 of revenue, massively higher than ESIO's $0.02.

Free Cash Flow
per Dollar of Revenue

➤ Growth
Finally we compare the financial metrics related to growth: revenue growth rates and price to sales.

Both companies have shrinking revenue. Magal Security Systems Ltd. revenue is shrinking faster than Electro Scientific Industries Inc, but not by a large amount.

Revenue Growth

For every $1 in revenue, the stock market prices in $1.34 in market cap for ESIO and $2.26 in market cap for MAGS.

Price to Sales

Magal Security Systems Ltd. (NASDAQ:MAGS)
Electro Scientific Industries Inc (NASDAQ:ESIO) : 77 to 23