ESAB Corporation (ESAB) AI Stock Analysis

• Market Cap: $6.94B
• Dividend Yield: 0.33%
• Average Volume (3M): 506.52K
• Price to Earnings (P/E): 28.9
• Beta (1Y): 1.05
• 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: 607,586
• 30 Day Avg. Volume: 506,522
• 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: 1.22
• Enterprise Value/Revenue: 3.04
• Enterprise Value/Gross Profit: 8.10
• Enterprise Value/Ebitda: 16.12
• 1Y Price Target: $147.33
• Price Target Upside: 28.86% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 5.29
• Revenue Forecast (FY): $2.72B

• Rating: 69 Neutral
• Price Target: $118.00 ▲(3.21% Upside)

ESAB Corporation's overall stock score reflects a strong financial performance and positive earnings call, highlighting increased sales and EBITDA growth. The new credit agreement further supports financial flexibility. However, technical indicators suggest a bearish trend, and the valuation indicates the stock may be expensive. Investors should consider these factors when evaluating ESAB's stock.

Positive Factors

Revenue Growth

The consistent revenue growth indicates a strong market position and effective sales strategies, supporting long-term business expansion.

Strategic Acquisition

The acquisition of EWM enhances ESAB's technological capabilities and market reach, supporting future revenue and margin growth.

Financial Flexibility

The new credit facilities enhance ESAB's financial flexibility, supporting operational needs and strategic initiatives over the long term.

Negative Factors

Rising Debt Levels

Higher debt levels may strain cash flow and limit financial flexibility, potentially impacting long-term financial stability.

Tariff Impact

Tariff-related cost pressures can reduce profitability and competitiveness, posing a risk to sustained margin improvement.

Free Cash Flow Decline

Declining free cash flow growth could impact liquidity and limit the company's ability to invest in growth opportunities.

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

ESAB Corporation shows robust financial performance with strong revenue growth and profitability. The balance sheet is stable with moderate leverage, though the increase in debt warrants attention. Cash flow generation is adequate, but the decline in free cash flow growth could pose a risk if not addressed.

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: 114.33
• 50DMA: Positive
• 100DMA: Positive
• 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 Positive. The current price of 114.33 is above the 20-day moving average (MA) of 112.70, above the 50-day MA of 114.22, and below the 200-day MA of 118.22, indicating a neutral trend. The MACD of 0.59 indicates Negative momentum. The RSI at 53.71 is Neutral, neither overbought nor oversold. The STOCH value of 55.76 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	79 Outperform	$3.33B	10.65	27.28%	0.67%	1.55%	701.41%
ATI	78 Outperform	$15.79B	37.48	25.43%	―	7.75%	6.84%
MLI	78 Outperform	$13.03B	17.54	26.06%	0.85%	15.71%	29.60%
CRS	75 Outperform	$16.61B	40.78	23.16%	0.24%	2.40%	81.54%
WOR	72 Outperform	$2.63B	24.89	11.31%	1.27%	7.43%	148.83%
ESAB	69 Neutral	$6.94B	28.87	13.86%	0.33%	1.19%	-7.78%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

ESAB Corporation Corporate Events

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.

ESAB Corporation Enters New Credit Agreement

On October 16, 2025, ESAB Corporation entered into an Amended and Restated Credit Agreement, which includes a $350 million senior term loan facility and a $1.05 billion senior revolving credit facility. This agreement replaces the company’s existing credit facilities and will be used for working capital and corporate purposes. The new facilities, maturing on October 16, 2030, offer flexible interest rate options and include covenants that limit the company’s ability to incur additional debt and require maintenance of certain financial ratios. This move is expected to streamline ESAB’s financial operations and potentially improve its leverage and interest coverage ratios.