Esco Technologies (ESE) AI Stock Analysis

• Market Cap: $5.90B
• Dividend Yield: 0.16%
• Average Volume (3M): 151.08K
• Price to Earnings (P/E): 46.7
• 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): 2.32
• Shares Outstanding: 25,874,369
• 10 Day Avg. Volume: 160,774
• 30 Day Avg. Volume: 151,077
• PEG Ratio: 0.10
• Price to Book (P/B): 3.55
• Price to Sales (P/S): 4.99
• P/FCF Ratio: 33.34
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 5.42
• Enterprise Value/Gross Profit: 13.64
• Enterprise Value/Ebitda: 23.65
• 1Y Price Target: $275.00
• Price Target Upside: 17.98% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Neutral
• Price Target: $256.00 ▲(9.83% Upside)

Esco Technologies demonstrates strong financial performance and positive earnings call sentiment, which are the most significant factors driving the score. However, the technical analysis indicates bearish trends, and the valuation suggests the stock may be overvalued, which tempers the overall score.

Positive Factors

Strong balance sheet & low leverage

Very low financial leverage and a high equity ratio provide durable financial flexibility: supports R&D, capital spending, and M&A without stressing liquidity. A 19.4% ROE indicates efficient capital use, which underpins long-term shareholder value and resilience through cycles.

Robust free cash flow generation

Strong FCF growth and a high FCF-to-earnings ratio mean the business converts earnings into cash reliably. This supports debt reduction, reinvestment, and funding of strategic initiatives without depending on external financing, strengthening long-term operational independence.

Diversified end markets and backlog expansion

Material contribution from maritime plus strong aerospace and test demand broadens revenue sources and reduces single-market cyclicality. A sizable post-acquisition order intake and backlog support multi-quarter revenue visibility and reduce reliance on any one sector for growth.

Negative Factors

Renewables segment headwinds

Structural policy and market pressure in renewables can persist and meaningfully constrain the utility solutions group's revenue and margins. Given the group's contribution to orders, prolonged renewables weakness would reduce segment growth potential and increase cyclicality of total revenues.

Slowing revenue momentum

A recent decline in revenue growth suggests organic demand may be plateauing absent acquisitions. If sustained, slower top-line momentum limits operating leverage, constrains long-term margin expansion, and raises dependence on acquisitions or price recovery to meet growth targets.

Acquisition-related margin dilution & integration risk

Material M&A has funded growth but introduced lower-margin businesses that diluted segment margins. Integration and harmonizing cost structures take time; if acquired margins remain structurally lower, this can cap consolidated margin improvement and raise execution risk over multiple quarters.

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

Esco Technologies exhibits strong financial health with robust profitability, efficient cash flow management, and a stable balance sheet. The company faces a challenge in revenue growth, but its strong margins and prudent financial leverage position it well for future stability and potential growth.

Income Statement

Esco Technologies has demonstrated strong profitability with a high net profit margin of 27.32% and a gross profit margin of 42.09% in the latest year. However, the revenue growth rate has declined by 1.09%, indicating a potential challenge in maintaining revenue momentum. The EBIT and EBITDA margins are healthy at 15.55% and 22.40%, respectively, showcasing efficient operational management.

Balance Sheet

The company's balance sheet is stable with a low debt-to-equity ratio of 0.15, reflecting prudent financial leverage. The return on equity is strong at 19.42%, indicating effective use of shareholder funds. The equity ratio stands at 64.35%, suggesting a solid equity base relative to total assets.

Cash Flow

Esco Technologies has shown impressive cash flow management with a significant free cash flow growth rate of 35.12%. The operating cash flow to net income ratio is 0.39, and the free cash flow to net income ratio is 0.82, indicating strong cash generation relative to earnings.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.16B	1.10B	1.03B	956.03M	857.50M	715.44M
Gross Profit	461.08M	461.08M	404.02M	375.66M	332.05M	270.39M
EBITDA	266.00M	245.38M	200.54M	178.24M	159.63M	124.97M
Net Income	299.22M	299.22M	101.88M	92.55M	82.32M	63.50M
Balance Sheet
Total Assets	2.39B	2.39B	1.84B	1.68B	1.65B	1.58B
Cash, Cash Equivalents and Short-Term Investments	101.35M	101.35M	65.96M	41.87M	97.72M	56.23M
Total Debt	210.40M	230.40M	179.83M	163.53M	177.85M	216.10M
Total Liabilities	830.94M	830.94M	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	205.62M	164.07M	91.38M	42.12M	90.26M	87.65M
Operating Cash Flow	241.94M	200.40M	127.54M	76.89M	135.28M	123.14M
Investing Cash Flow	-255.79M	-255.79M	-104.64M	-52.47M	-55.92M	-202.44M
Financing Cash Flow	49.54M	49.54M	-773.00K	-78.33M	-32.12M	81.47M

Esco Technologies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 233.09
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 233.09 is above the 20-day moving average (MA) of 218.21, above the 50-day MA of 209.76, and above the 200-day MA of 198.20, indicating a bullish trend. The MACD of 6.14 indicates Negative momentum. The RSI at 70.94 is Negative, neither overbought nor oversold. The STOCH value of 90.45 is Negative, 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
BMI	72 Outperform	$4.32B	30.60	21.47%	0.82%	12.11%	16.45%
ITRI	70 Outperform	$4.54B	18.07	16.93%	―	0.14%	14.12%
ESE	70 Neutral	$5.90B	46.70	8.93%	0.16%	13.13%	24.02%
OSIS	68 Neutral	$4.12B	28.66	18.33%	―	9.37%	15.70%
VNT	67 Neutral	$5.44B	13.77	35.82%	0.26%	1.76%	4.10%
ST	63 Neutral	$5.04B	-185.99	-0.92%	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 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.