Esco Technologies (ESE) AI Stock Analysis

• Market Cap: $7.39B
• Dividend Yield: 0.16%
• Average Volume (3M): 210.74K
• Price to Earnings (P/E): 54.4
• Beta (1Y): 0.85
• Revenue Growth: 13.13%
• EPS Growth: 24.02%
• Country: US
• Employees: 3,242
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 1.64
• Shares Outstanding: 25,895,761
• 10 Day Avg. Volume: 261,501
• 30 Day Avg. Volume: 210,740
• PEG Ratio: 0.10
• Price to Book (P/B): 3.55
• Price to Sales (P/S): 4.99
• P/FCF Ratio: 28.82
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 6.21
• Enterprise Value/Gross Profit: 14.94
• Enterprise Value/Ebitda: 27.17
• 1Y Price Target: $300.00
• Price Target Upside: 5.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 7.71
• Revenue Forecast (FY): $1.29B

• Rating: 80 Outperform
• Price Target: $326.00 ▲(14.16% Upside)
• Action: Reiterated Date: 02/06/26
• Date: Action: Reiterated 02/06/26

The score is driven primarily by strong financial quality (margin expansion, low leverage, improving returns) and a highly positive earnings update with raised FY2026 guidance and exceptional order growth. Technicals support the bullish setup, though momentum is near overbought. The main offset is a rich valuation (high P/E and low dividend yield), which increases downside risk if growth or margins normalize.

Positive Factors

Multi-year revenue growth and margin expansion

Esco has delivered sustained top-line expansion and materially better profitability over multiple years. Growing revenues with higher operating and net margins improve reinvestment capacity and resilience across cycles, supporting durable cash generation and long-term ROI.

Conservative balance sheet and rising returns

A low-debt, equity-strengthened balance sheet with sharply higher ROE provides financial flexibility to fund multi-year contracts, acquisitions, and R&D. Conservative leverage reduces refinancing risk and supports durable capacity to pursue strategic opportunities.

Record orders, backlog and accretive Maritime acquisition

Huge order intake and a meaningful Maritime acquisition create a larger, longer-dated backlog and diversified revenue streams—notably A&D and naval programs—improving forward visibility and underpinning multi-year revenue and margin stability versus relying on spot demand.

Negative Factors

Lumpy Navy contract timing and visibility constraints

Concentration in large, irregular defense awards creates volatile revenue recognition and planning risk. Lumpy program timing can cause sharp quarter-to-quarter swings in sales and margins, complicating capacity planning and making multi-quarter guidance less reliable.

Possible non-recurring items inflating net margins

If part of the elevated net margin reflects one-offs, sustaining current profitability is uncertain. Reversion would reduce cash flow available for reinvestment or returns, making recent ROE and margin gains less predictive of multi-period performance.

Weak cash conversion relative to operating profit

Persistent working-capital absorption or cash outflows that limit conversion of EBIT to operating cash can constrain liquidity and FCF flexibility. This reduces room for sustained capex, acquisitions, dividends, or debt repayment during cyclical slowdowns.

Esco Technologies Business Overview & Revenue Model

Company Description

ESCO Technologies Inc. produces and supplies engineered products and systems for industrial and commercial markets worldwide. It operates through Aerospace & Defense, Utility Solutions Group, and RF Shielding and Test segments. The Aerospace & Defense segment designs and manufactures filtration products, including hydraulic filter elements and fluid control devices used in commercial aerospace applications; filter mechanisms used in micro-propulsion devices for satellites; and custom designed filters for manned aircraft and submarines. It also designs, develops, and manufactures elastomeric-based signature reduction solutions for U.S. naval vessels; and mission-critical bushings, pins, sleeves, and precision-tolerance machined components for landing gear, rotor heads, engine mounts, flight controls, and actuation systems for the aerospace and defense industries. The Utility Solutions Group segment provides diagnostic testing solutions that enable electric power grid operators to assess the integrity of high-voltage power delivery equipment; and decision support tools for the renewable energy industry, primarily wind and solar. The RF Shielding and Test segment designs and manufactures RF test and secure communication facilities, acoustic test enclosures, RF and magnetically shielded rooms, RF measurement systems, and broadcast and recording studios; and RF absorptive materials and filters, active compensation systems, antennas, antenna masts, turntables, electric and magnetic probes, RF test cells, proprietary measurement software, and other test accessories to perform various tests. It also provides services, such as calibration for antennas and field probes, chamber certification, field surveys, customer training, and various product tests. The company distributes its products through a network of distributors, sales representatives, direct sales teams, and in-house sales personnel. The company was incorporated in 1990 and is based in St. Louis, Missouri.

How the Company Makes Money

Esco Technologies generates revenue through the sale of its high-tech products and services across various sectors. Key revenue streams include the sale of test and measurement equipment, which is utilized by clients in aerospace and telecommunications industries for product testing and validation. Additionally, the company earns income from its environmental testing solutions that allow clients to ensure compliance with regulatory standards. Utility metering solutions also contribute significantly to its earnings, as they are essential for modern energy management. Esco maintains strategic partnerships with major players in the aerospace and energy sectors, enhancing its market reach and providing access to larger contracts. The company's commitment to research and development ensures a continuous pipeline of innovative products, further solidifying its revenue generation capabilities.

Esco Technologies Financial Statement Overview

Summary

Strong multi-year revenue expansion and improving operating margins, supported by conservative leverage and rising ROE. Key watchouts are moderating recent revenue growth, unusually elevated FY2025/TTM net profitability that may include non-recurring benefits, and weaker cash conversion versus EBIT indicating working-capital or other cash outflows.

Income Statement

ESE shows steady top-line expansion, with revenue rising from $715M (2021) to $1.095B (FY2025) and $1.204B in TTM (Trailing-Twelve-Months), though recent growth has moderated (TTM ~3.7% vs. earlier double-digit years). Profitability is a key strength: operating margins improved from ~11.6% (2021) to ~15.5% (FY2025/TTM), and TTM net margin is very strong (~25.8%). The main watchout is the sharp jump in net income in FY2025/TTM versus FY2024, which suggests results may include one-time or unusually favorable items, making the current net margin potentially less repeatable.

Balance Sheet

The balance sheet looks conservative, with low leverage (debt-to-equity ~0.13 in TTM, ~0.15 in FY2025) and equity steadily growing over time. Returns have also improved meaningfully, with return on equity rising from ~6–8% (FY2021–FY2024) to ~19% (FY2025) and ~22% in TTM (Trailing-Twelve-Months). A minor caution is that total assets increased sharply from FY2024 to FY2025/TTM while leverage stayed low—this is not inherently negative, but it raises the importance of sustaining the higher profitability to justify the expanded asset base.

Cash Flow

Cash generation is solid and improving: operating cash flow increased to $242M (FY2025) and $277M in TTM (Trailing-Twelve-Months), while free cash flow rose to $164M (FY2025) and $240M TTM, with strong TTM free-cash-flow growth (~16.5%). Free cash flow tracks net income reasonably well (about 0.82–0.85x in FY2025/TTM), supporting earnings quality. The key weakness is that operating cash flow covers less than half of EBIT (roughly ~0.39–0.48x recently), implying meaningful working-capital needs or other cash outflows that reduce cash conversion from operating profit.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	1.20B	1.10B	919.13M	855.79M	857.50M	715.44M
Gross Profit	500.57M	461.08M	388.57M	353.11M	332.05M	270.39M
EBITDA	275.28M	245.38M	198.35M	166.85M	159.63M	124.97M
Net Income	304.44M	299.22M	101.88M	92.55M	82.32M	63.50M
Balance Sheet
Total Assets	2.40B	2.41B	1.84B	1.68B	1.65B	1.58B
Cash, Cash Equivalents and Short-Term Investments	103.82M	101.35M	65.96M	41.87M	97.72M	56.23M
Total Debt	188.98M	230.40M	156.81M	138.55M	177.85M	182.03M
Total Liabilities	838.13M	869.52M	601.27M	552.07M	606.30M	557.65M
Stockholders Equity	1.56B	1.54B	1.24B	1.13B	1.05B	1.02B
Cash Flow
Free Cash Flow	224.07M	189.77M	87.36M	46.96M	90.26M	87.65M
Operating Cash Flow	276.63M	241.94M	127.54M	76.89M	135.28M	123.14M
Investing Cash Flow	-261.23M	-255.79M	-104.64M	-52.47M	-55.92M	-202.44M
Financing Cash Flow	14.47M	49.54M	-773.00K	-78.33M	-32.12M	81.47M

Esco Technologies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 285.56
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESE, the sentiment is Positive. The current price of 285.56 is above the 20-day moving average (MA) of 252.91, above the 50-day MA of 225.46, and above the 200-day MA of 205.73, indicating a bullish trend. The MACD of 15.40 indicates Negative momentum. The RSI at 72.77 is Negative, neither overbought nor oversold. The STOCH value of 56.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ESE.

Esco Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ESE	80 Outperform	$7.39B	54.45	9.25%	0.16%	13.13%	24.02%
VNT	73 Outperform	$5.80B	14.67	35.39%	0.26%	1.76%	4.10%
BMI	71 Outperform	$4.62B	32.61	21.47%	0.82%	12.11%	16.45%
ITRI	69 Neutral	$4.40B	15.04	19.38%	―	0.14%	14.12%
OSIS	68 Neutral	$4.91B	33.78	18.33%	―	9.37%	15.70%
ST	68 Neutral	$5.59B	173.31	1.10%	1.43%	-8.07%	63.50%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Esco Technologies Corporate Events

Esco Technologies Raises Outlook After Strong First Quarter

At its annual meeting held on January 30, 2026, ESCO Technologies’ shareholders re-elected three directors to terms expiring in 2029, approved executive compensation on an advisory basis, amended the company’s employee stock purchase plan, and ratified the appointment of Grant Thornton as independent auditor for fiscal 2026, with all proposals passing by wide margins on turnout of roughly 94% of outstanding shares. Separately, on February 5, 2026, the company reported a strong start to fiscal 2026 with first-quarter sales up 35% to $290 million, orders up 143% to $557 million, GAAP EPS from continuing operations up 41% to $1.11 and adjusted EPS up 73% to $1.64, driving record backlog of $1.4 billion, particularly on the back of surging Aerospace & Defense demand and contributions from its Maritime business; that performance led management to lift full-year revenue and adjusted EPS guidance, while maintaining a regular dividend and signaling broad-based momentum across its end markets.

The most recent analyst rating on (ESE) stock is a Buy with a $260.00 price target. To see the full list of analyst forecasts on Esco Technologies stock, see the ESE Stock Forecast page.

Esco Technologies Reports Strong Q4 and FY 2025 Growth

On November 17, 2025, Esco Technologies‘ Board of Directors approved the fiscal 2026 awards of Restricted Share Units (RSUs) and Performance Share Units (PSUs) for its executive officers, with vesting periods and performance goals similar to the previous year. The fiscal 2026 PSUs will vest based on performance goals related to EBITDA and Return on Invested Capital, with potential adjustments based on Total Shareholder Return compared to a peer group. Additionally, on November 20, 2025, Esco Technologies reported significant financial growth for the fourth quarter and fiscal year 2025, with notable increases in sales, orders, and earnings per share, driven by strong market demand and strategic acquisitions, particularly in the Aerospace & Defense sector.

The most recent analyst rating on (ESE) stock is a Buy with a $238.00 price target. To see the full list of analyst forecasts on Esco Technologies stock, see the ESE Stock Forecast page.