ESAB Corporation (ESAB) AI Stock Analysis

• Market Cap: $6.62B
• Dividend Yield: 0.29%
• Average Volume (3M): 330.11K
• Price to Earnings (P/E): 26.1
• Beta (1Y): 1.32
• Revenue Growth: -1.06%
• EPS Growth: 1.56%
• Country: US
• Employees: 8,000
• Sector: Industrials
• Sector Strength: 84
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): 1.36
• Shares Outstanding: 60,698,710
• 10 Day Avg. Volume: 496,916
• 30 Day Avg. Volume: 330,108
• PEG Ratio: 0.94
• Price to Book (P/B): 4.10
• Price to Sales (P/S): 2.64
• P/FCF Ratio: 23.87
• Enterprise Value/Market Cap: 1.30
• Enterprise Value/Revenue: 3.16
• Enterprise Value/Gross Profit: 8.36
• Enterprise Value/Ebitda: 18.36
• 1Y Price Target: $134.00
• Price Target Upside: 15.66% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 71 Outperform
• Price Target: $121.00 ▲(4.44% Upside)

ESAB's strong financial performance and positive corporate events are significant strengths, contributing positively to the score. However, the bearish technical indicators and high valuation suggest caution. The positive sentiment from the earnings call further supports the stock's potential, but investors should be mindful of the challenges in the Americas and cash flow management.

Positive Factors

Financial Performance

ESAB outperformed expectations with EBITDA 5% ahead of consensus while revenue was 2% ahead, and raised the low end of outlook, bringing guidance up ~1% at the midpoint.

Growth Strategy

With low leveraging and FCF to spare, ESAB is able to utilize its aggressive balance sheet to support growth at a time when peers are struggling to maintain performance.

Negative Factors

Competitive Positioning

ESAB remains at over a 2x discount to ITW and is in line with larger peer LECO which has de-rated in recent months.

Market Challenges

ESAB's strong demand in India, other parts of Asia, and the Middle East is offsetting softness in Europe.

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 demonstrates strong profitability with healthy margins and solid equity positioning. Despite minor declines in revenue and free cash flow growth, the company's efficient cash flow generation and favorable leverage ratios support financial stability. Continued focus on revenue growth and cash flow management is necessary for sustaining long-term health.

Income Statement

ESAB Corporation demonstrates strong profitability with its TTM (Trailing-Twelve-Months) gross profit margin of 37.75% and net profit margin of 9.98%. The EBIT and EBITDA margins are also healthy at 16.54% and 16.98%, respectively. However, revenue growth is slightly negative at -0.42% compared to the previous year, indicating a potential area of concern for future growth.

Balance Sheet

The company maintains a solid equity position with a debt-to-equity ratio of 0.56 and an equity ratio of 45.28%. Return on equity (ROE) is robust at 14.26%, reflecting efficient use of equity capital. Despite slight fluctuations in debt levels, the overall financial stability remains satisfactory.

Cash Flow

Operating cash flow remains strong with a TTM free cash flow to net income ratio of 1.08, showcasing efficient cash generation relative to net income. The operating cash flow to net income ratio is 1.27, indicating strong cash flow coverage. Free cash flow growth, however, is slightly negative at -2.94%, suggesting a need for improved cash flow management.

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	470.63M	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	1.08B	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: Negative
• Last Price: 115.86
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 115.86 is below the 20-day moving average (MA) of 128.33, below the 50-day MA of 125.23, and below the 200-day MA of 122.86, indicating a bearish trend. The MACD of -0.81 indicates Positive momentum. The RSI at 37.56 is Neutral, neither overbought nor oversold. The STOCH value of 26.65 is Neutral, 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
AZZ	82 Outperform	$3.26B	12.59	23.85%	0.65%	1.70%	684.20%
MLI	81 Outperform	$9.67B	13.86	25.98%	1.02%	19.42%	30.15%
ATI	73 Outperform	$10.26B	25.49	26.95%	―	6.64%	3.23%
WOR	73 Outperform	$3.16B	33.06	10.52%	1.07%	-60.43%	-14.19%
CRS	72 Outperform	$12.64B	34.21	21.38%	0.31%	4.25%	100.26%
ESAB	71 Outperform	$6.62B	26.12	14.81%	0.29%	-1.06%	1.56%
Sector *	64 Neutral	$10.64B	16.02	5.48%	2.12%	2.70%	-24.91%

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.

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 Corporation Stockholders Approve Incentive Plan Updates

At the 2025 Annual Meeting on May 8, ESAB Corporation‘s stockholders approved the Amended and Restated 2022 Omnibus Incentive Plan, which includes several updates such as enabling consultants to receive grants, increasing the annual limit for non-employee directors, and extending the plan’s termination date. Additionally, the meeting saw the election of four Class III directors, the ratification of Ernst & Young LLP as the accounting firm, and the approval of executive compensation, indicating strong shareholder support for the company’s strategic decisions.

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.