ESAB Corporation (ESAB) AI Stock Analysis

• Market Cap: $7.07B
• Dividend Yield: 0.29%
• Average Volume (3M): 477.39K
• Price to Earnings (P/E): 27.8
• Beta (1Y): 1.21
• Revenue Growth: -1.06%
• EPS Growth: 1.56%
• Country: US
• Employees: 8,000
• Sector: Industrials
• Sector Strength: 73
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): 1.36
• Shares Outstanding: 60,698,710
• 10 Day Avg. Volume: 427,195
• 30 Day Avg. Volume: 477,394
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.22
• Enterprise Value/Revenue: 3.16
• Enterprise Value/Gross Profit: 8.36
• Enterprise Value/Ebitda: 17.64
• 1Y Price Target: $135.86
• Price Target Upside: 15.33% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 70 Neutral
• Price Target: $121.00 ▲(2.72% Upside)

ESAB's strong financial performance and positive earnings call sentiment are significant strengths, indicating solid growth potential. However, bearish technical indicators and high valuation metrics suggest caution. The company's strategic acquisitions support long-term growth, but immediate market conditions may pose challenges.

Positive Factors

Market Position

ESAB's multi-year track record of market share wins and organic outperformance is underappreciated by investors.

Stock Upgrade

Analyst recommends upgrading shares of ESAB to 'Buy' and raising the target price to $140 per share, indicating confidence in the company's value.

Negative Factors

Regional Weakness

The biggest issue for the company was some unexpected weakness in Mexico and some delayed automation projects.

Volume Decline

Volume was down 11%, which was significantly worse than expected, leading to a stock sell-off.

ESAB Corporation Business Overview & Revenue Model

Company Description

ESAB Corporation (ESAB) is a global leader in the manufacturing and supply of welding and cutting equipment, as well as consumables. The company operates across various sectors including industrial, fabrication, and manufacturing, providing innovative solutions to improve productivity and efficiency. ESAB's core products and services encompass welding equipment, cutting systems, and filler metals, catering to a broad range of industries worldwide.

How the Company Makes Money

ESAB Corporation generates revenue primarily through the sale of its welding and cutting equipment, consumables, and related services. The company's key revenue streams include the direct sale of welding machines, cutting systems, and filler metals to industrial and commercial clients. Additionally, ESAB benefits from recurring income through the sale of consumables, which are essential for the operation of welding and cutting equipment. The company also engages in strategic partnerships and distribution agreements to expand its market reach and enhance its product offerings. ESAB's focus on innovation and high-quality solutions helps maintain its competitive edge and contributes to its financial success.

ESAB Corporation Financial Statement Overview

Summary

ESAB Corporation exhibits strong revenue growth and profitability, supported by healthy margins. The balance sheet is stable with a reasonable debt level, though increasing debt warrants attention. Cash flow management requires improvement, particularly in free cash flow generation. Overall, the company is in a solid financial position but should address cash flow challenges to sustain growth.

Income Statement

ESAB Corporation demonstrates strong revenue growth with a 31.3% increase in the TTM period. The company maintains healthy profit margins, with a gross profit margin of 37.7% and a net profit margin of 9.98%. EBIT and EBITDA margins are also robust at 12.56% and 17.62%, respectively. However, the slight decline in revenue in the previous annual period indicates potential volatility.

Balance Sheet

The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 0.61. Return on equity is solid at 13.51%, indicating efficient use of equity. The equity ratio stands at 46.7%, suggesting a balanced capital structure. However, the increase in total debt over the years could pose a risk if not managed carefully.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth by 12.4% in the TTM period, which is a concern. The operating cash flow to net income ratio is moderate at 0.52, and the free cash flow to net income ratio is strong at 0.85, indicating good cash conversion. The company needs to focus on improving free cash flow generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.74B	2.74B	2.77B	2.59B	2.43B	1.95B
Gross Profit	1.03B	1.04B	1.02B	885.53M	837.98M	682.47M
EBITDA	489.99M	502.08M	465.14M	418.14M	393.69M	299.25M
Net Income	256.23M	264.84M	203.73M	223.75M	235.11M	157.41M
Balance Sheet
Total Assets	4.43B	4.03B	3.83B	3.75B	3.46B	3.39B
Cash, Cash Equivalents and Short-Term Investments	258.22M	249.36M	102.00M	72.02M	41.21M	49.21M
Total Debt	1.17B	1.16B	1.12B	1.24B	109.24M	97.04M
Total Liabilities	2.32B	2.23B	2.18B	2.37B	959.53M	841.06M
Stockholders Equity	2.07B	1.77B	1.61B	1.35B	2.46B	2.50B
Cash Flow
Free Cash Flow	258.14M	303.62M	282.32M	174.12M	215.15M	269.04M
Operating Cash Flow	309.95M	355.40M	330.49M	214.36M	250.74M	309.18M
Investing Cash Flow	-267.25M	-205.70M	-62.24M	-184.42M	-35.27M	-34.57M
Financing Cash Flow	-34.26M	31.67M	-219.72M	7.56M	-221.57M	-326.42M

ESAB Corporation Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 117.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESAB, the sentiment is Neutral. The current price of 117.8 is above the 20-day moving average (MA) of 113.98, below the 50-day MA of 121.78, and below the 200-day MA of 122.05, indicating a neutral trend. The MACD of -1.46 indicates Negative momentum. The RSI at 50.59 is Neutral, neither overbought nor oversold. The STOCH value of 60.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ESAB.

ESAB Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MLI	81 Outperform	$10.78B	15.46	25.98%	0.97%	19.42%	30.15%
AZZ	80 Outperform	$3.50B	13.54	23.85%	0.61%	1.70%	684.20%
ATI	77 Outperform	$10.70B	26.83	26.95%	―	6.64%	3.23%
CRS	75 Outperform	$11.98B	32.41	21.37%	0.32%	4.25%	100.21%
WOR	74 Outperform	$3.24B	33.96	10.52%	1.05%	-60.43%	-14.19%
ESAB	70 Neutral	$7.07B	27.83	14.81%	0.29%	-1.06%	1.56%
Sector *	64 Neutral	$10.73B	15.74	7.60%	2.01%	2.75%	-15.09%

ESAB Corporation Corporate Events

ESAB Corporation to Acquire EWM GmbH for €275 Million

On June 26, 2025, ESAB Corporation announced its agreement to acquire EWM GmbH, a German leader in heavy industrial welding equipment and advanced automation, for approximately €275 million. This acquisition, expected to close in the second half of 2025, aims to strengthen ESAB’s technological capabilities and market reach, particularly in North America, while aligning with its strategic and financial objectives. The acquisition is anticipated to be accretive to earnings and is expected to enhance ESAB’s growth and margin expansion, leveraging the ESAB Business System.