Graco (GGG) AI Stock Analysis

• Market Cap: $13.79B
• Dividend Yield: 1.32%
• Average Volume (3M): 850.24K
• Price to Earnings (P/E): 28.4
• Beta (1Y): 0.77
• Revenue Growth: 2.85%
• EPS Growth: 3.09%
• Country: US
• Employees: 4,300
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 0.73
• Shares Outstanding: 165,794,110
• 10 Day Avg. Volume: 825,566
• 30 Day Avg. Volume: 850,237
• PEG Ratio: -6.77
• Price to Book (P/B): 5.50
• Price to Sales (P/S): 6.72
• P/FCF Ratio: 27.59
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 6.26
• Enterprise Value/Gross Profit: 11.98
• Enterprise Value/Ebitda: 20.01
• 1Y Price Target: $93.50
• Price Target Upside: 13.09% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 2.96
• Revenue Forecast (FY): $2.24B

• Rating: 78 Outperform
• Price Target: $95.00 ▲(14.90% Upside)

Graco's overall stock score reflects strong financial performance and effective cash management as key strengths. However, valuation concerns and mixed technical indicators suggest caution. The earnings call highlighted both growth opportunities and challenges, particularly in organic sales and tariff impacts. The recent board appointment is a positive strategic move.

Positive Factors

Strong Cash Flow Management

Graco's robust cash flow growth supports future investments and operational flexibility, enhancing long-term financial stability.

Strategic Acquisition

The acquisition of Radia expands Graco's product offerings and market reach, reinforcing its competitive position in North America.

Board Appointment

Andrea Simon brings financial expertise, likely aiding strategic growth and operational efficiency, strengthening Graco's leadership.

Negative Factors

Organic Sales Decline

Declining organic sales indicate challenges in core market demand, potentially impacting revenue growth and market share.

Tariff Impact on Costs

Tariff-related cost increases pressure profit margins, which could hinder Graco's ability to maintain competitive pricing.

Challenges in Contractor Segment

Sales decline in the Contractor segment suggests potential issues with demand or channel management, affecting segment profitability.

Graco Business Overview & Revenue Model

Company Description

Graco Inc. designs, manufactures, and markets systems and equipment used to move, measure, control, dispense, and spray fluid and powder materials worldwide. The company's Industrial segment offers proportioning systems to spray polyurethane foam and polyurea coatings; equipment that pumps, meters, mixes and dispenses sealant, adhesive, and composite materials; and gel-coat equipment, chop and wet-out systems, resin transfer molding systems and applicators, and precision dispensing solutions. It also provides liquid finishing equipment; paint circulating and supply pumps; paint circulating advanced control systems; plural component coating proportioners; spare parts and accessories; and powder finishing products to coat powder finishing on metals under the Gema and SAT brands. The company's Process segment offers pumps to move and dispense chemicals, water, wastewater, petroleum, food, lubricants, and other fluids; pressure valves used in the oil and natural gas industry, other industrial processes, and research facilities; and chemical injection pumping solutions for injection of chemicals into producing oil wells and pipelines. It also supplies pumps, hose reels, meters, valves, and accessories for fast oil change facilities, service garages, fleet service centers, automobile dealerships, auto parts stores, truck builders, and heavy equipment service centers; and systems, components, and accessories for the automatic lubrication of bearings, gears, and generators in industrial and commercial equipment, compressors, turbines, and on- and off-road vehicles. The company's Contractor segment offers sprayers to apply paint to walls and other structures; and viscous coatings to roofs, as well as markings on roads, parking lots, athletic fields, and floors. It sells its products through distributors, original equipment manufacturers, and home center channels; and directly to end-users. The company was incorporated in 1926 and is headquartered in Minneapolis, Minnesota.

How the Company Makes Money

Graco generates revenue through the sale of its extensive range of products across various sectors, including construction, automotive, and industrial. The company's revenue model is primarily based on direct sales to customers, distributors, and retailers, with a significant portion coming from aftermarket sales of replacement parts and accessories. Key revenue streams include the sale of fluid handling equipment, spray equipment, and lubrication systems. Graco also benefits from strategic partnerships with industry leaders and distributors, enhancing its market reach and reinforcing its brand presence. Additionally, the company invests in research and development to innovate and expand its product offerings, which contributes to sustained revenue growth.

Graco Financial Statement Overview

Summary

Graco's financial performance is strong, with consistent revenue growth, high profitability margins, low leverage, and robust cash flow generation. The company has a low debt-to-equity ratio and impressive return on equity, indicating financial stability and efficient capital utilization. Despite a slight decline in EBIT margin, the overall financial trajectory remains positive.

Income Statement

Graco has demonstrated consistent revenue growth over the past years, with a notable increase in gross profit margin. The TTM gross profit margin stands at 52.24% and net profit margin at 22.26%, indicating strong operational efficiency and profitability. However, there is a slight decline in EBIT margin from 2023 to TTM, suggesting rising operational costs.

Balance Sheet

The company's balance sheet is robust, with a low debt-to-equity ratio of 0.02, showcasing financial stability and low leverage risk. The equity ratio is strong at 82.09%, reflecting a high proportion of assets financed by equity. Return on equity at 19.29% is impressive, indicating efficient use of shareholder funds.

Cash Flow

Graco's cash flow is solid, with an operating cash flow to net income ratio of 1.39, indicating strong cash generation from operations. The free cash flow growth is robust, and the free cash flow to net income ratio is 1.26, which highlights effective capital management. A significant increase in free cash flow from 2024 to TTM underlines improved cash efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.19B	2.11B	2.20B	2.14B	1.99B	1.65B
Gross Profit	1.15B	1.12B	1.16B	1.06B	1.03B	854.94M
EBITDA	685.98M	678.86M	686.59M	641.62M	578.00M	440.43M
Net Income	498.06M	486.08M	506.51M	460.64M	439.87M	330.46M
Balance Sheet
Total Assets	3.23B	3.14B	2.72B	2.44B	2.44B	1.99B
Cash, Cash Equivalents and Short-Term Investments	618.66M	675.34M	537.95M	339.20M	624.30M	378.91M
Total Debt	63.18M	48.65M	50.06M	126.59M	226.11M	212.59M
Total Liabilities	623.95M	555.08M	497.78M	579.25M	733.86M	704.22M
Stockholders Equity	2.61B	2.58B	2.22B	1.86B	1.71B	1.28B
Cash Flow
Free Cash Flow	624.88M	514.96M	466.24M	176.23M	323.33M	322.70M
Operating Cash Flow	672.48M	621.70M	651.02M	377.39M	456.90M	394.04M
Investing Cash Flow	-342.38M	-342.81M	-185.27M	-226.82M	-153.30M	-99.04M
Financing Cash Flow	-485.56M	-139.86M	-268.01M	-434.40M	-57.14M	-139.47M

Graco Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 82.68
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GGG, the sentiment is Positive. The current price of 82.68 is above the 20-day moving average (MA) of 82.60, above the 50-day MA of 81.87, and below the 200-day MA of 83.28, indicating a neutral trend. The MACD of 0.42 indicates Negative momentum. The RSI at 53.11 is Neutral, neither overbought nor oversold. The STOCH value of 55.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GGG.

Graco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NDSN	79 Outperform	$13.38B	27.97	16.21%	1.67%	3.78%	4.85%
GGG	78 Outperform	$13.79B	28.42	19.45%	1.32%	2.85%	3.09%
IEX	75 Outperform	$13.20B	27.88	12.21%	1.59%	7.09%	-2.29%
ITT	72 Outperform	$14.81B	28.59	17.85%	0.81%	8.01%	2.67%
CR	71 Outperform	$10.59B	33.22	18.09%	0.50%	-0.37%	21.77%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
GNRC	59 Neutral	$8.50B	26.07	12.38%	―	5.52%	9.03%

Graco Corporate Events

Graco Appoints Andrea Simon to Board of Directors

On October 30, 2025, Graco Inc. announced the appointment of Andrea H. Simon to its Board of Directors, effective December 5, 2025. Ms. Simon, who is currently the Executive Vice President & CFO at MasterBrand, Inc., brings extensive financial and operational expertise to Graco. Her appointment is expected to enhance Graco’s strategic growth initiatives as she joins the Audit Committee and Management Organization and Compensation Committee.