ESAB Corporation (ESAB)
NYSE:ESAB
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ESAB Corporation
(NYSE:ESAB)
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Rating:63Neutral
Price Target:
$95.00
▼(-3.97% Downside)
Action:Reiterated
Date:06/12/26
The score is driven primarily by solid-but-mixed fundamentals: steady growth and positive free cash flow are offset by margin compression and higher leverage. Earnings-call commentary is a notable positive due to reaffirmed guidance, improving cash conversion, and strategic acquisitions, while technical signals remain weak and valuation provides limited support.
Positive Factors
Consistent revenue growth and positive free cash flow
ESAB has produced steady top-line expansion alongside recurring free cash flow (~$218M TTM). Durable installed-base consumables plus equipment sales create recurring aftermarket demand, supporting reinvestment, M&A funding and working-capital needs over the medium term.
Negative Factors
Rising leverage after deal activity
Leverage has stepped up materially following recent M&A and financing, reducing balance-sheet flexibility. Higher debt elevates interest burden and constrains capacity for opportunistic investments or dividend/share actions if margins or cash flow weaken over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Consistent revenue growth and positive free cash flow
ESAB has produced steady top-line expansion alongside recurring free cash flow (~$218M TTM). Durable installed-base consumables plus equipment sales create recurring aftermarket demand, supporting reinvestment, M&A funding and working-capital needs over the medium term.
Read all positive factors
ESAB Corporation (ESAB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.57B
Dividend Yield0.33%
Average Volume (3M)620.60K
Price to Earnings (P/E)27.0
Beta (1Y)1.21
Revenue Growth6.63%
EPS Growth-24.56%
CountryUS
Employees8,000
SectorIndustrials
Sector Strength72
IndustryManufacturing - Metal Fabrication
Share Statistics
EPS (TTM)3.33
Shares Outstanding60,881,714
10 Day Avg. Volume645,792
30 Day Avg. Volume620,598
Financial Highlights & Ratios
PEG Ratio-2.05
Price to Book (P/B)3.14
Price to Sales (P/S)2.40
P/FCF Ratio31.92
Enterprise Value/Market Cap1.21
Enterprise Value/Revenue2.32
Enterprise Value/Gross Profit6.56
Enterprise Value/Ebitda13.74
Forecast
1Y Price Target
$137.60Price Target Upside39.09% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)5.79
Revenue Forecast (FY)$2.91B
ESAB Corporation Business Overview & Revenue Model
Company Description
ESAB Corporation specializes in the creation, production, and distribution of industrial consumables and advanced equipment for cutting, joining, and automated welding processes, in addition to gas control systems. Their extensive catalog features...
How the Company Makes Money
ESAB primarily makes money by selling welding and cutting products to industrial customers through a mix of direct sales, distributors, and channel partners. Its revenue model is typically anchored by (1) equipment sales—welding power sources, wir...
ESAB Corporation Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 12, 2026
Earnings Call Sentiment Positive
The call was broadly constructive: management reported record first-quarter sales (+10% core) and higher adjusted EBITDA (+6%), reaffirmed full-year guidance, highlighted strong acquisition performance (EWM, Aktiv) and pipeline momentum, and cited improved cash conversion (49% vs. 40%). Near-term headwinds include margin pressure from EWM integration and the Iran conflict, Q1 volume softness (-3%), and commodity/freight cost inflation, but management articulated clear mitigation actions (price recovery, synergies, EBXai/AI productivity) and a path to EWM EBITDA accretion by year-end as well as long-term margin upside from portfolio mix shifts (equipment and Eddyfi). Overall, positives (record sales, earnings growth, cash improvement, strategic acquisitions and guidance reaffirmation) meaningfully outweigh the manageable near-term challenges.Positive Updates
Record Q1 Sales and Profitability Growth
Total sales of $715 million; total core sales up 10% year-over-year. Adjusted EBITDA of $136 million, up 6% YoY, with an adjusted EBITDA margin of 19%.
Negative Updates
Near-Term Margin Headwinds from EWM and Iran Conflict
Company cited margin impacts in the quarter: ~40 basis points headwind from EWM integration and an additional ~30–50 basis points impact from the conflict in Iran (management referenced 30 bps in one instance and 50 bps on the EMEA segment). EWM is accretive to gross margin but dilutive to EBITDA margins for the first three quarters of 2026.
Read all updates
Q1-2026 Updates
Positive
Negative
Record Q1 Sales and Profitability Growth
Total sales of $715 million; total core sales up 10% year-over-year. Adjusted EBITDA of $136 million, up 6% YoY, with an adjusted EBITDA margin of 19%.
Read all positive updates
Company Guidance
ESAB reiterated full‑year guidance calling for core total sales growth of 6–9% (organic 2–4%, ~400 bps from M&A, ~1% FX), adjusted EBITDA of $575–$595 million and adjusted EPS of $5.70–$5.90. Management pointed to Q1 results that support the outlook — $715 million of sales, $136 million of adjusted EBITDA (19% margin), $40 million of adjusted free cash flow, 49% cash conversion (up from 40% a year ago) and net leverage of 1.9 (to rise temporarily on the mid‑year Eddyfi close, then back below 3 by year‑end). They expect additional price in Q2, EWM to be EBITDA‑dilutive for the first three quarters but accretive by year‑end, and Eddyfi (closing mid‑year; ~65% gross margin, ~30% EBITDA margin, high‑single‑digit growth) to accelerate margin expansion toward consolidated gross margins >40% by 2027.ESAB Corporation Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
58
Neutral
Cash Flow
64
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.91B | 2.84B | 2.74B | 2.77B | 2.59B | 2.43B |
| Gross Profit | 1.03B | 1.01B | 1.04B | 1.02B | 885.53M | 837.98M |
| EBITDA | 492.01M | 491.56M | 531.41M | 509.37M | 435.40M | 404.83M |
| Net Income | 207.05M | 226.77M | 264.84M | 205.28M | 223.75M | 235.11M |
Balance Sheet | ||||||
| Total Assets | 5.62B | 4.77B | 4.03B | 3.83B | 3.75B | 3.46B |
| Cash, Cash Equivalents and Short-Term Investments | 1.00B | 185.86M | 249.36M | 102.00M | 72.02M | 41.21M |
| Total Debt | 2.14B | 1.43B | 1.16B | 1.12B | 1.31B | 109.24M |
| Total Liabilities | 3.39B | 2.55B | 2.23B | 2.18B | 2.37B | 959.53M |
| Stockholders Equity | 2.19B | 2.17B | 1.77B | 1.61B | 1.35B | 2.46B |
Cash Flow | ||||||
| Free Cash Flow | 218.38M | 213.28M | 303.62M | 282.32M | 174.12M | 215.15M |
| Operating Cash Flow | 272.07M | 260.57M | 355.40M | 330.49M | 214.36M | 250.74M |
| Investing Cash Flow | -490.62M | -479.88M | -205.70M | -62.24M | -184.42M | -35.27M |
| Financing Cash Flow | 913.00M | 113.70M | 31.67M | -219.72M | 7.56M | -221.57M |
ESAB Corporation Technical Analysis
Neutral
98.93
Price Trends
95.86
Negative
105.39
Negative
109.78
Negative
Market Momentum
-2.15
Negative
49.96
Neutral
54.64
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 98.93 is above the 20-day moving average (MA) of 89.70, above the 50-day MA of 95.86, and below the 200-day MA of 109.78, indicating a neutral trend. The MACD of -2.15 indicates Negative momentum. The RSI at 49.96 is Neutral, neither overbought nor oversold. The STOCH value of 54.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ESAB.
ESAB Corporation Risk Analysis
ESAB Corporation disclosed 42 risk factors in its most recent earnings report. ESAB Corporation reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ESAB Corporation Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $4.53B | 14.21 | 24.53% | 0.67% | 4.58% | 556.92% | |
76 Outperform | $15.27B | 17.79 | 28.67% | 0.85% | 11.54% | 38.42% | |
74 Outperform | $27.09B | 63.39 | 24.23% | ― | 2.93% | 5.01% | |
74 Outperform | $27.90B | 58.60 | 24.41% | 0.24% | 3.72% | 34.03% | |
70 Outperform | $2.94B | 26.24 | 11.58% | 1.27% | 14.99% | 86.18% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $5.57B | 26.95 | 9.70% | 0.33% | 6.63% | -24.56% |
* Industrials Sector Average
ESAB
ESAB Corporation
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ESAB Corporation Corporate Events
Business Operations and StrategyExecutive/Board Changes
ESAB Names Executive Chair, Aligns Leadership with Incentives
Positive
Jun 12, 2026
On June 10, 2026, ESAB Corporation appointed long-time industrial dealmaker Mitchell P. Rales as Executive Chair of its board, keeping him on as chairman and formalizing his partnership with CEO Shyam P. Kambeyanda to steer the company’s nex...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
ESAB Completes Eddyfi Acquisition and Equity Financing Transactions
Positive
Jun 2, 2026
On June 1, 2026, ESAB completed its $1.45 billion cash acquisition of Québec-based Eddyfi Technologies, a global leader in advanced non-destructive testing and monitoring, financed with cash on hand, new 5.625% senior notes due 2031 and concu...
Executive/Board ChangesShareholder Meetings
ESAB Shareholders Approve Directors, Auditor and Executive Pay
Positive
May 12, 2026
At its annual meeting of stockholders held on May 8, 2026, ESAB Corporation’s shareholders elected nine directors to the Board, with each nominee receiving sufficient support to serve until the next annual meeting. The voting results indicat...
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
ESAB Appoints New CFO Amid Broader Financial Leadership Changes
Neutral
Apr 2, 2026
On April 2, 2026, ESAB Corporation announced a major financial leadership reshuffle, appointing veteran finance executive R. Brent Jones as executive vice president and chief financial officer, effective in early May 2026, with CEO Shyam Kambeyand...
M&A TransactionsPrivate Placements and Financing
ESAB Issues Senior Notes to Fund Eddyfi Acquisition
Positive
Mar 26, 2026
On March 26, 2026, ESAB Corporation issued $1.0 billion of 5.625% senior unsecured notes due April 1, 2031, guaranteed by certain U.S. subsidiaries and carrying semi-annual interest payments beginning October 1, 2026. The notes feature change-of-c...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
ESAB Plans $1 Billion Note Offering to Fund Acquisition
Positive
Mar 12, 2026
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 curren...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.