ESAB Corporation (ESAB) AI Stock Analysis

• Market Cap: $7.75B
• Dividend Yield: 0.33%
• Average Volume (3M): 372.15K
• Price to Earnings (P/E): 32.2
• Beta (1Y): 1.06
• Revenue Growth: 1.19%
• EPS Growth: -7.78%
• Country: US
• Employees: 8,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): 1.32
• Shares Outstanding: 60,710,964
• 10 Day Avg. Volume: 593,369
• 30 Day Avg. Volume: 372,151
• 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: 1.16
• Enterprise Value/Revenue: 3.23
• Enterprise Value/Gross Profit: 8.59
• Enterprise Value/Ebitda: 17.10
• 1Y Price Target: $144.40
• Price Target Upside: 13.16% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 5.83
• Revenue Forecast (FY): $2.92B

• Rating: 70 Outperform
• Price Target: $133.00 ▲(4.22% Upside)

The score is driven primarily by solid fundamentals (healthy margins, moderate leverage) and a supportive technical uptrend. Upside is reinforced by upbeat guidance and growth/M&A catalysts, but the overall rating is held back by a relatively high P/E with a low dividend yield and some cash flow/debt risk (negative FCF growth and rising debt).

Positive Factors

Recurring consumables revenue

ESAB’s core consumables business produces repeat, usage-driven revenue tied to customers’ production volumes. This creates a durable, high-frequency demand base that cushions cyclicality in capital equipment sales, supports aftermarket margins, and underpins long-term revenue visibility.

Recent revenue and EBITDA expansion

Consistent top-line growth with simultaneous EBITDA expansion indicates improving operational leverage and pricing power across regions. Raised full-year guidance reflects sustainable demand and execution, supporting multi-quarter cash generation and reinvestment capacity for growth and restructuring.

EWM acquisition adds tech and margins

The EWM deal provides strategic technology, talent, and higher-margin product mix that can lift overall gross margins and enable cross-selling. Proper integration can enhance product differentiation, boost long-term ROIC, and accelerate structural margin improvement across automation and specialty segments.

Negative Factors

Rising leverage

Moderate but rising leverage reduces financial flexibility for capex, buybacks, or opportunistic M&A and increases sensitivity to interest costs. If debt growth outpaces cash generation, it could constrain strategic investments and raise refinancing risk over the next several quarters.

Negative free cash flow growth

Declining free cash flow growth signals pressure on the company’s ability to fund organic investment, pay down debt, or return capital without using balance sheet resources. Sustained negative FCF trends would limit flexibility and magnify the impact of any margin or working capital setbacks.

Tariff and execution headwinds

Ongoing tariff-driven cost pressures and execution issues (including deferred automation and Mexico revenue) create structural margin risk. Addressing these requires durable pricing, supply-chain and manufacturing changes; failure to fully offset them could depress margins over multiple quarters.

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 generates revenue through multiple streams, primarily from the sale of welding consumables and equipment. The company's revenue model is built on a combination of direct sales to end-users, distribution partnerships, and service contracts. Key revenue streams include the sale of welding wires, rods, and electrodes, as well as cutting machines and automation systems. Additionally, ESAB benefits from recurring revenue through maintenance services and parts replacement. Strategic partnerships with distributors and collaborations with industry leaders further enhance its market reach and contribute to its earnings. The company also invests in research and development to innovate and expand its product offerings, which helps to drive sales growth and maintain competitive advantage in the market.

ESAB Corporation Financial Statement Overview

Summary

Solid profitability and revenue growth (TTM revenue +1.99%, gross margin 37.56%, net margin 8.70%) support the score. Balance sheet leverage is moderate (debt-to-equity 0.63) but rising debt is a concern, and cash flow quality is mixed with negative free cash flow growth (-7.79%) despite good cash conversion (FCF/net income 0.82).

Income Statement

ESAB Corporation demonstrates strong revenue growth with a TTM increase of 1.99%, indicating a positive trajectory. The gross profit margin is healthy at 37.56%, and the net profit margin is solid at 8.70%. However, there is a slight decline in EBIT and EBITDA margins compared to the previous year, suggesting some pressure on operational efficiency.

Balance Sheet

The company maintains a manageable debt-to-equity ratio of 0.63, reflecting moderate leverage. Return on equity is decent at 12.35%, showcasing effective use of equity capital. The equity ratio stands at 43.45%, indicating a stable financial structure. However, the increase in total debt over the past year is a point of concern.

Cash Flow

Operating cash flow to net income ratio is at 0.43, indicating reasonable cash generation relative to net income. However, free cash flow growth is negative at -7.79%, which could impact future liquidity. The free cash flow to net income ratio remains strong at 0.82, suggesting good cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.79B	2.74B	2.77B	2.59B	2.43B	1.95B
Gross Profit	1.05B	1.04B	1.02B	885.53M	837.98M	682.47M
EBITDA	526.97M	531.41M	509.37M	435.40M	404.83M	299.25M
Net Income	242.84M	264.84M	205.28M	223.75M	235.11M	157.41M
Balance Sheet
Total Assets	4.87B	4.03B	3.83B	3.75B	3.46B	3.39B
Cash, Cash Equivalents and Short-Term Investments	218.22M	249.36M	102.00M	72.02M	41.21M	49.21M
Total Debt	1.47B	1.16B	1.12B	1.31B	109.24M	97.04M
Total Liabilities	2.71B	2.23B	2.18B	2.37B	959.53M	841.06M
Stockholders Equity	2.12B	1.77B	1.61B	1.35B	2.46B	2.50B
Cash Flow
Free Cash Flow	238.03M	303.62M	282.32M	174.12M	215.15M	269.04M
Operating Cash Flow	290.39M	355.40M	330.49M	214.36M	250.74M	309.18M
Investing Cash Flow	-553.53M	-205.70M	-62.24M	-184.42M	-35.27M	-34.57M
Financing Cash Flow	218.36M	31.67M	-219.72M	7.56M	-221.57M	-326.42M

ESAB Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 127.61
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 127.61 is above the 20-day moving average (MA) of 120.33, above the 50-day MA of 115.83, and above the 200-day MA of 118.46, indicating a bullish trend. The MACD of 1.99 indicates Negative momentum. The RSI at 64.63 is Neutral, neither overbought nor oversold. The STOCH value of 76.34 is Neutral, 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
AZZ	80 Outperform	$3.78B	11.89	27.38%	0.67%	1.55%	701.41%
CRS	77 Outperform	$16.65B	38.82	23.48%	0.24%	2.40%	81.54%
MLI	76 Outperform	$12.73B	16.71	25.58%	0.85%	15.71%	29.60%
ATI	71 Outperform	$17.32B	44.70	22.12%	―	7.75%	6.84%
ESAB	70 Outperform	$7.75B	32.23	13.86%	0.33%	1.19%	-7.78%
WOR	70 Outperform	$2.85B	27.13	11.31%	1.27%	7.43%	148.83%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

ESAB Corporation Corporate Events

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.

ESAB Corporation Appoints Dr. Sébastien Martin to Board

On December 4, 2025, ESAB Corporation announced the appointment of Dr. Sébastien Martin to its Board of Directors, effective January 1, 2026, increasing the board size to ten members. Dr. Martin, an Associate Professor at Kellogg School of Management, brings expertise in AI and operations management, which is expected to enhance ESAB’s strategic direction and operational efficiency. Concurrently, Patrick Allender announced his retirement from the board, effective after the 2026 annual meeting, marking the end of his significant contributions since ESAB’s independent listing in 2022.

The most recent analyst rating on (ESAB) stock is a Hold with a $113.00 price target. To see the full list of analyst forecasts on ESAB Corporation stock, see the ESAB Stock Forecast page.