Earth Science Tech (ETST) Stock Analysis & Winston Score

Earth Science Tech, Inc. is a small healthcare company that makes cannabidiol (CBD) products and works on pharmaceutical-grade hemp-based compounds. Its products include nutraceuticals, topicals, and research-stage drug formulations aimed at health and wellness consumers as well as potential clinical markets. The company operates in the specialty pharmaceutical and hemp-derived product space, which is heavily influenced by changing regulations around cannabis-related ingredients.

The company earns revenue by selling its CBD and hemp-based products directly and through distribution channels, primarily in the United States. With a market cap of roughly $0.1 billion, it is a very small company competing in a crowded market alongside much larger consumer health and pharmaceutical brands. Its 65% gross margin suggests decent pricing power on its formulations, but the main risk it faces is regulatory uncertainty — the FDA has not yet established a clear approval pathway for CBD as a food ingredient or drug, which could limit how and where the company can sell its products.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+44.2% YoY

YoY Growth Rate

Strong revenue growth

EPS Growth

+471.4% YoY

YoY Growth Rate

EPS growth accelerating

Insider Activity

68.0%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$1M cash & investments

Quarterly Free Cash Flow

→ Burn rate stable

Company generates more cash than it spends — no dilution risk from fundraising

Strong grower

Earth Science Tech is growing revenue at 44% year-over-year. The Winston Score penalises unprofitable companies, but revenue at this pace tells a different story — this is a company still in "build mode."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

75.3%

Premium pricing power — 75.3% gross margin

Operating Margin

18.7%

Healthy — 18.7% operating margin

ROCE

39.7%

Exceptional — 39.7% return on capital

ROIC above 25%. Every dollar invested in the business earns more than 25 cents back per year.

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Growth

Sales YoY

+14.5%

Fast-growing sales (14.5% YoY)

EPS YoY

+58.7%

Earnings growing fast (58.7% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion

87%

Modest — 87% of profit becomes cash

FCF Margin

6.2%

Modest free cash flow (6.2%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

0.06

Conservative — low debt load (0.06)

Interest Cover

5.45x

Adequate interest coverage (5.5x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)

11.7x

Attractive valuation — P/E 11.7

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

-4.3

SLOWING

Earnings expected to fall — forward P/E higher than today

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Dividends

Not applicable for this business.

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