ESAB Corporation (ESAB) AI Stock Analysis

• Market Cap: $7.47B
• Dividend Yield: 0.26%
• Average Volume (3M): 277.69K
• Price to Earnings (P/E): 27.7
• Beta (1Y): 1.29
• Revenue Growth: -1.85%
• EPS Growth: 16.06%
• Country: US
• Employees: 8,000
• Sector: Industrials
• Sector Strength: 92
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): 1.25
• Shares Outstanding: 60,622,890
• 10 Day Avg. Volume: 224,532
• 30 Day Avg. Volume: 277,688
• PEG Ratio: 11.32
• Price to Book (P/B): 4.05
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 26.30
• Enterprise Value/Market Cap: 1.15
• Enterprise Value/Revenue: 0.78
• Enterprise Value/Gross Profit: 8.37
• Enterprise Value/Ebitda: 4.60
• 1Y Price Target: $133.67
• Price Target Upside: 8.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 77 Outperform
• Price Target: $146.00 ▲( 18.49% Upside)

ESAB's strong financial performance and positive earnings outlook are key strengths, supported by strategic acquisitions and robust profitability. Technical analysis suggests upward momentum, though potential overvaluation and regional challenges require attention. The corporate event further reinforces confidence in the company's strategic direction.

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 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 Corporation generates revenue primarily through the sale of its welding and cutting equipment and consumables. The company's key revenue streams include the manufacturing and distribution of welding consumables such as electrodes, wires, and fluxes, as well as welding and cutting equipment like machines, torches, and accessories. ESAB also offers automation solutions that enhance productivity and efficiency for industrial clients. Significant partnerships with distributors and suppliers, as well as a strong global presence, contribute to ESAB's earnings by facilitating access to diverse markets and customer bases.

ESAB Corporation Financial Statement Overview

Summary

ESAB Corporation presents a robust financial profile with strong profitability margins and solid equity positioning. While the revenue and free cash flow growth rates show minor declines, the company's efficient cash flow generation and favorable leverage ratios bolster overall financial stability. Continued focus on revenue growth and cash flow management will be key to sustaining long-term financial 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
2.73B	2.74B	2.77B	2.59B	2.43B	1.95B
	Gross Profit
1.03B	1.04B	1.02B	885.53M	837.98M	682.47M
	EBIT
451.42M	447.45M	404.17M	329.06M	306.21M	202.13M
	EBITDA
480.89M	502.08M	465.14M	418.14M	393.69M	299.25M
	Net Income Common Stockholders
272.25M	264.84M	203.73M	223.75M	235.11M	157.41M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
76.50M	249.36M	102.00M	72.02M	41.21M	49.21M
	Total Assets
3.83B	4.03B	3.83B	3.75B	3.46B	3.39B
	Total Debt
1.09B	1.16B	1.12B	1.24B	109.24M	97.04M
	Net Debt
1.01B	913.88M	1.02B	1.17B	68.03M	47.83M
	Total Liabilities
2.15B	2.23B	2.18B	2.37B	959.53M	841.06M
	Stockholders Equity
1.64B	1.77B	1.61B	1.35B	2.46B	2.50B
Cash Flow		Free Cash Flow
294.68M	303.62M	282.32M	174.12M	215.15M	269.04M
	Operating Cash Flow
346.34M	355.40M	330.49M	214.36M	250.74M	309.18M
	Investing Cash Flow
-181.77M	-205.70M	-62.24M	-184.42M	-35.27M	-34.57M
	Financing Cash Flow
52.47M	31.67M	-219.72M	7.56M	-221.57M	-326.42M

ESAB Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 123.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESAB, the sentiment is Positive. The current price of 123.22 is below the 20-day moving average (MA) of 124.91, above the 50-day MA of 119.89, and above the 200-day MA of 116.90, indicating a neutral trend. The MACD of 2.15 indicates Positive momentum. The RSI at 49.03 is Neutral, neither overbought nor oversold. The STOCH value of 5.94 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ESAB.

ESAB Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRS	80 Outperform	$11.46B	32.61	21.78%	0.35%	7.40%	168.67%
ESAB	77 Outperform	$7.47B	27.67	16.64%	0.26%	-1.85%	16.06%
ATI	76 Outperform	$10.67B	27.37	25.42%	―	6.82%	3.49%
MLI	74 Outperform	$8.39B	13.82	24.51%	1.12%	18.81%	10.05%
AZZ	70 Outperform	$2.66B	49.80	13.01%	0.76%	2.61%	-53.74%
WOR	66 Neutral	$2.87B	48.16	6.56%	1.16%	-69.82%	-78.10%
Sector *	64 Neutral	$4.39B	11.81	5.20%	249.39%	3.96%	-12.36%

ESAB Corporation Corporate Events

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.