Esco Technologies (ESE)
NYSE:ESE
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Esco Technologies
(NYSE:ESE)
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Rating:77Outperform
Price Target:
$338.00
▲(7.33% Upside)
Action:Reiterated
Date:05/12/26
The score is driven primarily by strong underlying financial quality and a highly positive earnings call (raised EPS guidance, record backlog, margin expansion, and better cash flow). Offsetting these positives are a premium valuation (high P/E, low yield), a mixed/softening near-term technical picture, and financial watch-items including sharp TTM gross margin compression and uneven earnings-to-cash conversion.
Positive Factors
Order Growth & Backlog
Sustained 42% order growth and record backlog across platforms provide multi-quarter revenue visibility and production pull-through. A large backlog reduces near-term demand risk, supports capacity planning and pricing, and underpins durable top-line growth across cyclical end markets.
Negative Factors
Gross Margin Compression
A material decline in TTM gross margin versus prior-year levels suggests structural mix shifts, pricing pressure, or cost increases that could depress long-term gross profitability. If sustained, lower gross margins constrain operating leverage and make high net margins harder to maintain.
Read all positive and negative factors
Positive Factors
Negative Factors
Order Growth & Backlog
Sustained 42% order growth and record backlog across platforms provide multi-quarter revenue visibility and production pull-through. A large backlog reduces near-term demand risk, supports capacity planning and pricing, and underpins durable top-line growth across cyclical end markets.
Read all positive factors
Esco Technologies Key Performance Indicators (KPIs)
Esco Technologies (ESE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.68B
Dividend Yield0.16%
Average Volume (3M)350.81K
Price to Earnings (P/E)52.5
Beta (1Y)0.79
Revenue Growth16.43%
EPS Growth14.49%
CountryUS
Employees3,242
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)11.89
Shares Outstanding25,907,171
10 Day Avg. Volume331,512
30 Day Avg. Volume350,811
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 Cap1.02
Enterprise Value/Revenue6.25
Enterprise Value/Gross Profit14.92
Enterprise Value/Ebitda29.34
Forecast
1Y Price Target
$400.00Price Target Upside27.02% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)8.15
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 Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 10, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum: substantial order and revenue growth, significant margin expansion, large EPS upside, record backlog, improved cash flow, and an accretive acquisition in progress. These positives outweigh the key challenges noted — chiefly renewables/NRG weakness, timing-related softness in Maritime, revenue guidance conservatism, and some regulatory/timing risk on the Megger transaction. Overall, the company presented confidence in durable demand drivers and reiterated long-term portfolio improvements despite isolated near-term headwinds.Positive Updates
Strong Order Growth and Record Backlog
Total orders increased 42% year-over-year with organic order growth of 22%; organic order growth was double-digit across all three business platforms. Management reported backlog at a record level, citing sustained demand across end markets.
Negative Updates
Renewables/NRG Weakness
Lower renewables demand weighed on part of the Utility Solutions Group; NRG experienced weakness and margin declines that partially offset growth at Doble. Management noted developers are prioritizing project completions ahead of tax credit sunsets, contributing to volatility.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Order Growth and Record Backlog
Total orders increased 42% year-over-year with organic order growth of 22%; organic order growth was double-digit across all three business platforms. Management reported backlog at a record level, citing sustained demand across end markets.
Read all positive updates
Company Guidance
Management raised FY2026 adjusted EPS guidance to $8.00–$8.25 (up 33%–37% vs. FY2025) and said 2026 should be a record year; Q2 delivered adjusted EPS of $1.91 (+63%), company adjusted EBIT margin of 21.7% (Q2) and year‑to‑date margin expansion of 370 bps, orders up 42% reported (22% organic) with record backlog, operating cash flow of nearly $135M vs. $46M a year ago, and EBITDA leverage of 0.4x; they reiterated mid‑single‑digit organic revenue growth for Test (now 4%–6% planning horizon) and said the Megger acquisition is expected to close in Q1 FY2027, be EPS‑accretive in year one and roughly double‑digit accretive thereafter with a better‑than‑double‑digit IRR above their WACC.Esco Technologies Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
86
Very Positive
Cash Flow
74
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.25B | 1.10B | 919.13M | 855.79M | 857.50M | 715.44M |
| Gross Profit | 522.67M | 461.08M | 388.57M | 353.11M | 332.05M | 270.39M |
| EBITDA | 265.84M | 245.38M | 198.35M | 166.85M | 159.63M | 124.97M |
| Net Income | 308.14M | 299.22M | 101.88M | 92.55M | 82.32M | 63.50M |
Balance Sheet | ||||||
| Total Assets | 2.41B | 2.41B | 1.84B | 1.68B | 1.65B | 1.58B |
| Cash, Cash Equivalents and Short-Term Investments | 92.25M | 101.35M | 65.96M | 41.87M | 97.72M | 56.23M |
| Total Debt | 212.67M | 230.40M | 156.81M | 138.55M | 177.85M | 182.03M |
| Total Liabilities | 820.38M | 869.52M | 601.27M | 552.07M | 606.30M | 557.65M |
| Stockholders Equity | 1.59B | 1.54B | 1.24B | 1.13B | 1.05B | 1.02B |
Cash Flow | ||||||
| Free Cash Flow | 212.26M | 189.77M | 87.36M | 46.96M | 90.26M | 87.65M |
| Operating Cash Flow | 258.95M | 241.94M | 127.54M | 76.89M | 135.28M | 123.14M |
| Investing Cash Flow | -261.60M | -255.79M | -104.64M | -52.47M | -55.92M | -202.44M |
| Financing Cash Flow | 38.03M | 49.54M | -773.00K | -78.33M | -32.12M | 81.47M |
Esco Technologies Technical Analysis
Neutral
314.92
Price Trends
298.25
Negative
270.09
Positive
238.68
Positive
Market Momentum
-2.70
Positive
43.78
Neutral
22.34
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESE, the sentiment is Neutral. The current price of 314.92 is above the 20-day moving average (MA) of 312.27, above the 50-day MA of 298.25, and above the 200-day MA of 238.68, indicating a neutral trend. The MACD of -2.70 indicates Positive momentum. The RSI at 43.78 is Neutral, neither overbought nor oversold. The STOCH value of 22.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $7.68B | 52.47 | 20.50% | 0.16% | 16.43% | 14.49% | |
68 Neutral | $3.45B | 40.71 | 18.76% | 0.82% | 5.19% | -2.69% | |
67 Neutral | $6.94B | 14.72 | 1.72% | 1.43% | -3.37% | -59.55% | |
66 Neutral | $3.61B | 18.75 | 17.44% | ― | -3.99% | 14.06% | |
62 Neutral | $3.48B | 27.19 | 16.74% | ― | 6.98% | 8.41% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $4.00B | 13.30 | 33.42% | 0.26% | 4.08% | 15.31% |
* Technology Sector Average
ESE
Esco Technologies
296.45
118.76
66.84%
BMI
Badger Meter
118.06
-123.55
-51.14%
ITRI
Itron
81.35
-33.45
-29.14%
OSIS
OSI Systems
211.37
-15.58
-6.86%
ST
Sensata
47.74
22.52
89.28%
VNT
Vontier
28.42
-7.13
-20.05%
Esco Technologies Corporate Events
Business Operations and StrategyDividendsFinancial DisclosuresM&A Transactions
Esco Technologies Reports Strong Q2 Results, Raises EPS Outlook
Positive
May 7, 2026
For the quarter ended March 31, 2026, Esco Technologies reported a 33% year-on-year jump in sales to $309 million and a 26% rise in GAAP EPS from continuing operations to $1.29, with adjusted EPS up 63% to $1.91. Orders surged 42% to $378 million,...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Esco Technologies Announces Transformative Megger Group Acquisition
Positive
Apr 16, 2026
On April 15, 2026, ESCO Technologies Inc. agreed to acquire the entire share capital of U.K.-based Megger Group Limited from Swiss seller TBG AG for about $2.35 billion, to be paid through $922 million in cash and 5.10 million ESCO common shares, ...
Business Operations and StrategyFinancial DisclosuresM&A Transactions
ESCO Technologies to Acquire Megger, Expanding Utility Solutions
Positive
Apr 15, 2026
On April 15, 2026, ESCO Technologies Inc. announced a definitive agreement to acquire Megger Group Limited from TBG AG for $2.35 billion, funded with $0.9 billion in cash and approximately $1.4 billion in ESCO equity, valuing the deal at about 14 ...
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.