Analyst Steve DeLuca at the Cruttenden & Co. investment banking firm in Irvine said he still considers Eltron's stock "slightly undervalued"--even though its shares trade at a healthy 23 times its annual earnings per share--based on the company's continuing growth prospects. He predicts Eltron's profit will jump to $4.1 million this year, up 46% from the $2.8 million in net income he expects the company to show when it reports its final 1994 results. He also projects sales growth of 57%, to $27.4 million in 1995 from $17.4 million in 1994.
The biggest risk DeLuca sees is Eltron's reliance on one customer, United Parcel Service, which now accounts for nearly 30% of Eltron's sales. The delivery company supplies Eltron's desktop printers to its large-volume customers. The printers are tied into UPS' computers so UPS knows what is being shipped, and can input data on the labels.