ESAB Corporation (ESAB) AI Stock Analysis

• Market Cap: $5.97B
• Dividend Yield: 0.33%
• Average Volume (3M): 448.33K
• Price to Earnings (P/E): 45.2
• Beta (1Y): 1.13
• Revenue Growth: 1.19%
• EPS Growth: -7.78%
• Country: US
• Employees: 8,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): N/A
• Shares Outstanding: 60,728,710
• 10 Day Avg. Volume: 482,484
• 30 Day Avg. Volume: 448,335
• PEG Ratio: -2.05
• Price to Book (P/B): 3.14
• Price to Sales (P/S): 2.40
• P/FCF Ratio: 31.92
• Enterprise Value/Market Cap: 1.22
• Enterprise Value/Revenue: 2.56
• Enterprise Value/Gross Profit: 7.22
• Enterprise Value/Ebitda: 14.65
• 1Y Price Target: $150.00
• Price Target Upside: 52.58% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 61 Neutral
• Price Target: $109.00 ▲(10.87% Upside)
• Action: Downgraded Date: 03/13/26
• Date: Action: Downgraded 03/13/26

The score is driven by solid underlying profitability and a positive outlook with raised guidance and strategic expansion, but it is held back by weak technical momentum, a high P/E with low yield, and recent declines in earnings and cash flow versus 2024.

Positive Factors

Margin Sustainability

ESAB's mid-30s gross margin and ~16% EBIT margin indicate a structurally profitable business able to absorb input cost volatility. Sustained margins support durable operating cash generation, fund investment and M&A, and reduce sensitivity of earnings to cyclicality in equipment sales over the next 2–6 months.

Recurring Consumables & Aftermarket

A significant portion of ESAB's revenue comes from consumables and aftermarket parts that customers repurchase regularly. This creates predictable, repeatable revenue and customer stickiness, smoothing volatility from capital equipment cycles and supporting stable cash flows and margin sustainability over time.

Strategic M&A Expands TAM

Acquisitions like EWM and the planned Eddyfi move ESAB into inspection, robotics and less-cyclical end markets (aerospace, defense, nuclear), broadening the product workflow and improving margin mix. This strategic shift increases long-term growth optionality and reduces reliance on pure fabrication equipment cycles.

Negative Factors

Weakened Cash Generation

Free cash flow has fallen materially versus 2024, reducing internal funding capacity for capex, integration, or deleveraging. If lower cash conversion persists, ESAB may need to rely more on external financing for strategic initiatives, raising earnings sensitivity to interest and refinancing conditions.

Tariff & Execution Headwinds

Tariff-driven cost pressures in the Americas and deferred automation/Mexico revenues signal operational and demand execution risks. These structural headwinds can compress margins and delay revenue recognition, making near-term margin recovery and predictable cash flow less certain until issues are resolved.

Elevated Acquisition Financing Risk

The Eddyfi acquisition financing (bridge loan, note offering and equity/preferred placements) materially increases financing complexity and near-term leverage. If synergies or integration are delayed, higher interest expense and refinancing risk could strain flexibility and raise execution risk for strategic growth plans.

ESAB Corporation Business Overview & Revenue Model

Company Description

ESAB Corporation formulates, develops, manufactures, and supplies consumable products and equipment for use in cutting, joining, and automated welding, as well as gas control equipment. Its comprehensive range of welding consumables includes electrodes, cored and solid wires, and fluxes using a range of specialty and other materials; and cutting consumables, including electrodes, nozzles, shields, and tips. The company's fabrication technology equipment ranges from portable welding machines to large customized automated cutting and welding systems. It also offers a range of digital software and solutions to help its customers increase their productivity, remotely monitor their welding operations, and digitize their documentation. The company sells its products under the ESAB brand to various end markets, including general industry, construction, infrastructure, transportation, energy, renewable energy, and medical and life sciences. It offers its products through independent distributors and direct salespeople. ESAB Corporation was incorporated in 2021 and is based in Wilmington, Delaware.

How the Company Makes Money

ESAB primarily makes money by selling welding and cutting equipment and the recurring consumables used with that equipment. A major revenue stream comes from consumables (e.g., welding wire, electrodes, filler metals, and fluxes) that customers must repurchase regularly as they are used up in day-to-day operations; this creates repeat demand tied to customers’ production volumes. The company also generates revenue from sales of equipment and systems (such as welding power sources, automation-ready systems, and cutting machines), which tend to be more project- and capital-spending driven and can be complemented by sales of compatible accessories. In addition, ESAB earns revenue from aftermarket activities that support installed equipment—such as spare parts, maintenance-related items, and service/support offerings—helping extend customer relationships beyond the initial equipment sale. ESAB sells through multiple routes to market, including distributors, industrial supply channels, and direct sales to larger customers, with distributor networks expanding geographic reach and driving product availability. Material input costs, pricing, product mix (equipment vs. consumables), industrial production levels, and customer capital expenditure cycles are significant factors influencing ESAB’s earnings.

ESAB Corporation Financial Statement Overview

Summary

Profitability is solid with stable-to-improving gross margin (~37.6% TTM) and healthy EBIT margin (~16% TTM). However, net income and cash generation stepped down versus 2024 (net income ~$227M TTM vs ~$265M in 2024; FCF ~$213M TTM vs ~$304M), and ROE has cooled (~12.4% TTM), keeping the score from being higher.

Income Statement

ESAB shows solid profitability with stable-to-improving gross margin (mid-30%s, reaching ~37.6% in TTM (Trailing-Twelve-Months)) and healthy operating profitability (EBIT margin ~16% in TTM). Net margin remains good (~8.7% TTM) but is down versus 2024 (~9.7%), and earnings softened in TTM (net income ~$227M vs ~$265M in 2024). Growth is modest: revenue is up ~1.8% in TTM after being roughly flat in 2024, indicating more of a steady compounder than a high-growth story.

Balance Sheet

Leverage is moderate and generally manageable with debt-to-equity around ~0.66–0.70 in 2023–TTM (improved from ~0.97 in 2022), supporting balance-sheet stability. Equity and assets increased in the latest period, but returns eased, with return on equity down to ~12.4% in TTM from ~15.0% in 2024. Overall, the balance sheet looks sound, though not under-levered, and profitability on equity has cooled recently.

Cash Flow

Cash generation is positive with TTM (Trailing-Twelve-Months) operating cash flow of ~$261M and free cash flow of ~$213M, and free cash flow remains a strong share of net income (about ~82% in TTM). However, cash flow weakened versus 2024 (operating cash flow ~$355M; free cash flow ~$304M), and TTM free cash flow declined (~-10.4% growth). Cash conversion also looks lighter in the latest period (operating cash flow is a lower share of reported earnings than prior years), which is a key watch item if it persists.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.84B	2.74B	2.77B	2.59B	2.43B
Gross Profit	1.01B	1.04B	1.02B	885.53M	837.98M
EBITDA	491.56M	531.41M	509.37M	435.40M	404.83M
Net Income	226.77M	264.84M	205.28M	223.75M	235.11M
Balance Sheet
Total Assets	4.77B	4.03B	3.83B	3.75B	3.46B
Cash, Cash Equivalents and Short-Term Investments	185.86M	249.36M	102.00M	72.02M	41.21M
Total Debt	1.43B	1.16B	1.12B	1.31B	109.24M
Total Liabilities	2.55B	2.23B	2.18B	2.37B	959.53M
Stockholders Equity	2.17B	1.77B	1.61B	1.35B	2.46B
Cash Flow
Free Cash Flow	213.28M	303.62M	282.32M	174.12M	215.15M
Operating Cash Flow	260.57M	355.40M	330.49M	214.36M	250.74M
Investing Cash Flow	-479.88M	-205.70M	-62.24M	-184.42M	-35.27M
Financing Cash Flow	113.70M	31.67M	-219.72M	7.56M	-221.57M

ESAB Corporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 98.31
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESAB, the sentiment is Negative. The current price of 98.31 is below the 20-day moving average (MA) of 117.46, below the 50-day MA of 120.35, and below the 200-day MA of 118.17, indicating a bearish trend. The MACD of -6.31 indicates Positive momentum. The RSI at 23.04 is Positive, neither overbought nor oversold. The STOCH value of 4.25 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ESAB.

ESAB Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MLI	79 Outperform	$12.27B	16.84	27.46%	0.85%	15.71%	29.60%
AZZ	78 Outperform	$3.70B	19.10	26.34%	0.67%	1.55%	701.41%
CRS	78 Outperform	$18.63B	37.45	22.99%	0.24%	2.40%	81.54%
WOR	70 Outperform	$2.39B	24.74	11.16%	1.27%	7.43%	148.83%
ATI	69 Neutral	$20.20B	39.98	22.69%	―	7.75%	6.84%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ESAB	61 Neutral	$5.97B	45.18	10.98%	0.33%	1.19%	-7.78%

ESAB Corporation Corporate Events

ESAB Plans $1 Billion Note Offering to Fund Acquisition

On March 12, 2026, ESAB Corporation announced it intends to offer $1 billion of senior notes due 2031 in a private placement to qualified institutional buyers in the U.S. and certain investors abroad. The notes will be guaranteed by certain current and future domestic restricted subsidiaries, with the proceeds earmarked to fund a portion of the purchase price for the planned acquisition of Canadian-based Eddyfi Holding Inc., signaling a significant financing step in ESAB’s expansion strategy.

Because the notes are being issued in an unregistered offering under Rule 144A and Regulation S, they will be available only to eligible institutional investors and cannot be freely sold in the U.S. public markets. The transaction underscores ESAB’s continued use of debt markets to support portfolio growth, while leaving completion of both the offering and the acquisition subject to market conditions and customary closing risks that could affect timing and leverage outcomes for stakeholders.

The most recent analyst rating on (ESAB) stock is a Buy with a $120.00 price target. To see the full list of analyst forecasts on ESAB Corporation stock, see the ESAB Stock Forecast page.

ESAB Announces Eddyfi Acquisition and Financing Initiatives

On January 31, 2026, ESAB Corporation agreed via a wholly owned subsidiary to acquire Québec-based Eddyfi Holding Inc. and related entities for $1.45 billion in cash, a deal that will make Eddyfi a wholly owned subsidiary and combine ESAB’s fabrication capabilities with Eddyfi’s advanced non-destructive testing, inspection, monitoring and robotics technologies. The acquisition, expected to close in mid-2026 subject to regulatory approvals in multiple jurisdictions, is structured with a $1.0 billion committed bridge loan and $318 million of equity financing and is projected to expand ESAB’s addressable market by about $5 billion, boost its exposure to higher-growth, higher-margin and less cyclical sectors such as aerospace, defense, nuclear, energy and civil infrastructure, and position the company as a full workflow provider from fabrication through inspection and monitoring. To support the financing package, on February 2, 2026 ESAB launched private placements of $175 million of 6.50% Series A Mandatory Convertible Preferred Stock—largely subscribed by entities affiliated with Chairman Mitchell Rales and Steven Rales—and approximately $143 million of common stock to institutional investors, all unregistered offerings under securities law exemptions. ESAB also released preliminary unaudited estimates for the fourth quarter and full year 2025 showing continued revenue and earnings growth, alongside an initial 2026 outlook (excluding Eddyfi) indicating further gains in core revenue, EBITDA and adjusted EPS, while guiding investors to expect a post-transaction net leverage ratio below 3.0x by year-end once the deal closes and synergies begin to materialize.

The most recent analyst rating on (ESAB) stock is a Hold with a $133.00 price target. To see the full list of analyst forecasts on ESAB Corporation stock, see the ESAB Stock Forecast page.