One-glance verdict
Undervalued
$40.42 our estimate vs market $21.06
Wall Street consensus: $22.00 (-45.6% lower than our fair-value estimate)
48% below our estimate, below the bear case
Fundamentals snapshot
Ethan Allen Interiors Inc.
ETD · NYQ · Consumer Cyclical · Furnishings, Fixtures & Appliances
Current price
$21.06
52-week range
$18.28 - $29.30
Market cap
$530.80M
Balance sheet
Healthy
203.19x Strong cushion
Net cash $12.56M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Returns 8.4% on equity, ahead of 66% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Forward P/E (16.5x) is higher than trailing (13.5x) - earnings are expected to drop.
- Risk Stock trades 16.8% above its 5-year average P/E.
What this company does
Ethan Allen Interiors Inc.
Ethan Allen is a classic American company that designs, builds, and sells its own brand of home furniture and decorations. It primarily earns money by selling directly to customers in its own stores and online, which gives it control over the entire process from the factory to your living room. This control over its supply chain (the network for making and delivering products) helps the company manage product quality and potentially keep more profit from each sale.
How the company got here
Founded in 1932 by two brothers-in-law, the company started as a housewares manufacturer and later purchased a bankrupt furniture factory in Vermont. They named their early-American style furniture after Revolutionary War hero Ethan Allen. Over the years, the company grew by focusing on a specific style and selling its products through a network of dedicated stores. After being bought and sold, the current management team took over in 1989 and the company became publicly traded in 1993. Today, Ethan Allen is known for its vertically integrated model, meaning it controls many steps of the process from design and manufacturing to selling in its own stores.
What it actually does
Ethan Allen is a home furnishings company that designs, makes, and sells a wide range of furniture and home decor. Think of them as a one-stop-shop for decorating a home, offering everything from sofas, beds, and dining tables to lighting, rugs, and decorative accents. A key part of their business is offering complimentary interior design services in their stores, which they call Design Centers. This means customers can get professional help in choosing and customizing furniture to fit their homes.
Wholesale
This part of the business involves designing, manufacturing, and sourcing home furnishings. The wholesale division sells these products to both company-owned retail stores and independently owned Ethan Allen stores. So, when one of Ethan Allen's own retail stores buys a sofa to sell to a customer, the wholesale division is the one that technically sells it to them first. This segment's revenue (the total amount of money generated) comes from these sales to the entire network of Ethan Allen stores.
Retail
The retail segment is the part of the company that most customers interact with directly. It consists of the company-operated Design Centers that sell furniture and accessories directly to the public. Revenue for this segment is generated from the final sale of products to consumers like you and me. This division's profitability depends on the retail gross margin (the difference between the price they sell a product for and what it cost them from the wholesale division). The retail business is a significant part of Ethan Allen's overall operations.
What management is betting on now
Management is currently focused on the company's vertical integration as a key strength, which means they control the process from design and manufacturing to sales and delivery. They believe that making about 75% of their furniture in their own North American factories gives them better control over quality and is a competitive advantage. The company is also investing in its retail Design Centers, combining technology with personal interior design services to enhance the customer experience. Their strategy emphasizes offering high-quality, customizable products and excellent service rather than competing on price alone.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q1
$11.49M
FY2025 Q2
$7.84M
FY2025 Q3
$8.20M
FY2025 Q4
$22.90M
FY2026 Q1
$14.43M
FY2026 Q2
$-4.72M
FY2026 Q3
$12.10M
FY2026 Q4
$19.63M
Revenue
$146.75M
Net income
—
Diluted EPS
0.46
Operating cash flow
$22.42M
Free cash flow
$19.63M
Fetching…
Sources
Revenue
$135.84M
Net income
—
Diluted EPS
0.23
Operating cash flow
$15.05M
Free cash flow
$12.10M
Fetching…
Sources
Revenue
$149.92M
Net income
—
Diluted EPS
0.46
Operating cash flow
$-1.83M
Free cash flow
$-4.72M
Fetching…
Sources
Revenue
$146.98M
Net income
—
Diluted EPS
0.41
Operating cash flow
$16.83M
Free cash flow
$14.43M
Fetching…
Sources
Revenue
$160.36M
Net income
—
Diluted EPS
0.48
Operating cash flow
$24.82M
Free cash flow
$22.90M
Fetching…
Sources
Revenue
$142.69M
Net income
$9.61M
Diluted EPS
0.37
Operating cash flow
$10.18M
Free cash flow
$8.20M
Fetching…
Sources
Revenue
$157.26M
Net income
$15.00M
Diluted EPS
0.59
Operating cash flow
$11.62M
Free cash flow
$7.84M
Fetching…
Sources
Revenue
$154.34M
Net income
$14.72M
Diluted EPS
0.57
Operating cash flow
$15.08M
Free cash flow
$11.49M
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Sources
Is it cheap or expensive?
Fair value $40.42 vs current price $21.06
Wall Street consensus is the average analyst price target: $22.00 (-45.6% lower than our fair-value estimate).
Our most-likely fair value is $40.42 a share — about 91.9% above today's price of $21.06, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $12.6M - more cash than debt. Interest coverage 203.2x.
Net debt
$-12.56M
Interest coverage
203.19x
Ethan Allen Interiors Inc.'s profit covers its interest bill about 203.2 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
ETD
BASELINE
Ethan Allen Interiors Inc.
Total debt $120.69M Interest coverage 203.19x This is the baseline the peer rows are being compared against.
Total debt $541.51M Interest coverage 284.68x +40% vs ETD Carries about 1.4x more debt cushion than ETD.
Total debt $230.71M Interest coverage 4.13x -98% vs ETD Carries about 49.1x less debt cushion than ETD.
Total debt $82.71M Interest coverage 160.10x -21% vs ETD Carries about 1.3x less debt cushion than ETD.
Total debt $51.90M Interest coverage 1,934.09x +852% vs ETD Carries about 9.5x more debt cushion than ETD.
Total debt $23.95M Interest coverage -1.16x -100% vs ETD This peer has almost no interest-payment cushion compared with ETD.
What you should know
The case for and against ETD
3 Rewards
3 Risks
Rewards
-
Returns 8.4% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 10/10 years.
-
Trades at 13.5x P/E vs peer median 17.5x (22.8% cheaper).
Risks
-
Forward P/E (16.5x) is higher than trailing (13.5x) - earnings are expected to drop.
-
Stock trades 16.8% above its 5-year average P/E.
-
Operating margin compressed from 16.9% to 10.5% over 3 years.
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)
13.50x
Forward P/E
16.52x
P/B
1.13x
P/S
0.92x
EV/EBITDA
8.48x
PEG ratio
1.99x
Profitability
How much profit each dollar creates
Gross margin
61.2%
Operating margin
10.5%
Net margin
6.9%
ROE
8.4%
ROA
4.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.26x
Current ratio
2.06x
Quick ratio
0.93x
Total debt
$120.69M
Total cash
$133.25M
Growth
How the business has been compounding
Revenue TTM
$579.49M
Revenue 5Y CAGR
-8.3%
EPS TTM
1.56
EPS 5Y CAGR
-27.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$52.48M
Free CF TTM
$41.44M
FCF margin
7.2%
Dividend
Shareholder payout
Yield
7.4%
Payout ratio
100.0%
Last ex-div date
2026-09-03