Esco Technologies Inc (ESE)
NYSE:ESE
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Esco Technologies
(NYSE:ESE)
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Rating:80Outperform
Price Target:
$355.00
▲(14.59% Upside)
Action:ReiteratedDate: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
Margin Expansion & Returns
Sustained margin expansion and materially higher ROE signal durable improvements in pricing, cost structure, and product mix toward higher-value engineered offerings. Higher margins across Aerospace & Test imply structural profitability that can support reinvestment, R&D, and returns if maintained.
Negative Factors
Cash Conversion Weakness
Relatively weak cash conversion versus operating profit indicates meaningful working-capital absorption or non-cash timing items. Over time this can constrain free cash flow, limit the pace of deleveraging or M&A, and require higher liquidity buffers if seasonal or contract timing persists.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin Expansion & Returns
Sustained margin expansion and materially higher ROE signal durable improvements in pricing, cost structure, and product mix toward higher-value engineered offerings. Higher margins across Aerospace & Test imply structural profitability that can support reinvestment, R&D, and returns if maintained.
Read all positive factors
Esco Technologies (ESE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.02B
Dividend Yield0.16%
Average Volume (3M)279.12K
Price to Earnings (P/E)44.1
Beta (1Y)0.84
Revenue Growth13.13%
EPS Growth24.02%
CountryUS
Employees3,242
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)1.64
Shares Outstanding25,895,761
10 Day Avg. Volume387,508
30 Day Avg. Volume279,118
Financial Highlights & Ratios
PEG Ratio0.10
Price to Book (P/B)3.55
Price to Sales (P/S)4.99
P/FCF Ratio28.82
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue6.73
Enterprise Value/Gross Profit16.20
Enterprise Value/Ebitda29.45
Forecast
1Y Price Target
$325.00Price Target Upside4.91% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)8.12
Revenue Forecast (FY)$1.32B
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 & Def...
How the Company Makes Money
ESCO makes money primarily by selling engineered products, systems, and related services to commercial and government customers across its operating segments.
1) Aerospace & Defense revenue: ESCO generates sales by supplying specialized component...
Esco Technologies Key Performance Indicators (KPIs)
Esco Technologies Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call conveyed a broadly positive operational and financial picture driven by a pronounced surge in orders, strong revenue growth, margin expansion, record adjusted EPS, robust cash flow, and an upgraded full-year outlook. Outperformance in the Test and Aerospace & Defense segments and accretive contribution from the ESCO Maritime acquisition were major positives. Offsetting risks include near-term weakness in the renewables/NRG business, lumpy Navy contract timing that limits visibility, and management's conservative year phasing despite the strong Q1. Overall the positives—substantial orders growth, margin and EPS expansion, improved cash flow, and raised guidance—outweigh the near-term headwinds and visibility constraints.Positive Updates
Record Order Intake
Booked over $550 million in orders in Q1, a 143% year-over-year increase; ESCO Maritime contributed ~$238 million of orders and all three segments posted double-digit organic orders growth.
Negative Updates
Renewables Weakness Impacting Utility Sales
Utility Solutions sales rose only ~1% in Q1 as 6% growth at Doble was largely offset by declines at NRG; management cited near-term headwinds in renewables as US developers focus on completing existing projects to meet tax-credit safe-harbor deadlines (expiring in July).
Read all updates
Q1-2026 Updates
Positive
Negative
Record Order Intake
Booked over $550 million in orders in Q1, a 143% year-over-year increase; ESCO Maritime contributed ~$238 million of orders and all three segments posted double-digit organic orders growth.
Read all positive updates
Company Guidance
ESCO raised its fiscal 2026 outlook after a strong Q1, increasing midpoint sales by $20 million to a new range of $1.29 billion to $1.33 billion and raising full-year adjusted EPS guidance to $7.90–$8.15 per share (an increase of $0.38 at the midpoint), which implies 31%–35% growth versus 2025 adjusted EPS; management said the sales upside is largely driven by Test outperformance (Test revenue guide raised from +3%–5% to +9%–11%) and a slight lift to Aerospace & Defense sales, and that the sales lift supports higher adjusted EBIT expectations. They also lowered the projected full-year tax rate to 23.0%–23.5% (from 23.7%–24.1%) reflecting a favorable Q1 tax rate, and noted Q1 metrics that underpin the guide: over $550 million of orders (+143% YoY), Q1 sales up 35% (11% organic plus $51M Maritime), adjusted EBIT margin expansion of 380 bps to 19.4%, and Q1 adjusted EPS of $1.64 (+73% YoY).Esco Technologies Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
86
Very Positive
Cash Flow
78
Positive
| 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
Positive
309.80
Price Trends
268.60
Positive
238.66
Positive
220.64
Positive
Market Momentum
8.50
Negative
69.07
Neutral
90.04
Negative
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 309.8 is above the 20-day moving average (MA) of 277.43, above the 50-day MA of 268.60, and above the 200-day MA of 220.64, indicating a bullish trend. The MACD of 8.50 indicates Negative momentum. The RSI at 69.07 is Neutral, neither overbought nor oversold. The STOCH value of 90.04 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ESE.
Esco Technologies Risk Analysis
Esco Technologies disclosed 17 risk factors in its most recent earnings report. Esco Technologies reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Esco Technologies Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $8.02B | 44.07 | 21.34% | 0.16% | 13.13% | 24.02% | |
71 Outperform | $4.54B | 38.15 | 20.71% | 0.82% | 12.11% | 16.45% | |
69 Neutral | $4.27B | 13.96 | 18.49% | ― | 0.14% | 14.12% | |
68 Neutral | $4.85B | 27.58 | 16.91% | ― | 9.37% | 15.70% | |
68 Neutral | $5.64B | 155.81 | 1.11% | 1.43% | -8.07% | 63.50% | |
65 Neutral | $5.26B | 13.43 | 34.02% | 0.26% | 1.76% | 4.10% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
ESE
Esco Technologies
309.80
163.02
111.06%
BMI
Badger Meter
155.41
-25.21
-13.96%
ITRI
Itron
95.10
-2.12
-2.18%
OSIS
OSI Systems
294.48
110.04
59.66%
ST
Sensata
38.69
19.54
102.09%
VNT
Vontier
37.16
7.51
25.32%
Esco Technologies Corporate Events
Business Operations and StrategyDividendsFinancial DisclosuresShareholder Meetings
Esco Technologies Raises Outlook After Strong First Quarter
Positive
Feb 5, 2026
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 p...
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.