Graco (GGG) AI Stock Analysis

• Market Cap: $14.48B
• Dividend Yield: 1.32%
• Average Volume (3M): 730.34K
• 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): 0.77
• Shares Outstanding: 165,794,110
• 10 Day Avg. Volume: 1,102,066
• 30 Day Avg. Volume: 730,339
• PEG Ratio: 2.95
• Price to Book (P/B): 5.23
• Price to Sales (P/S): 6.20
• P/FCF Ratio: 21.75
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: 6.22
• Enterprise Value/Gross Profit: 11.86
• Enterprise Value/Ebitda: 18.52
• 1Y Price Target: $93.67
• Price Target Upside: 7.26% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 81 Outperform
• Price Target: $100.00 ▲(14.51% Upside)

The score is driven primarily by very strong financial performance (high margins, minimal leverage, and solid cash generation). Technicals are supportive with price above major moving averages and positive momentum, while valuation is the key restraint due to a relatively high P/E and modest yield. Earnings-call takeaways were constructive on profitability/cash flow but tempered by organic sales softness and tariff/China-related headwinds.

Positive Factors

High Profitability

Margins near 52% gross and 23% net indicate durable earnings power and pricing leverage across industrial and contractor product lines. High margins provide a long-term buffer to input inflation, fund R&D, and support returns even if top-line growth softens.

Very Low Leverage

An extremely low debt-to-equity ratio (~0.02) and conservative balance sheet give Graco flexibility to fund strategic M&A, capital spending, and shareholder returns without raising financial risk. This financial strength supports resilience through downturns and long-term optionality.

Strong Cash Conversion

Operating cash flow that exceeds net income and free cash flow nearly matching net income demonstrate high-quality cash generation. Durable cash conversion supports sustained dividends, buybacks and reinvestment, reducing reliance on external financing for growth.

Negative Factors

Organic Revenue Weakness

A 2% organic sales decline signals underlying demand variability and reliance on acquisitions/currency for headline growth. Persistent organic weakness would challenge the sustainability of revenue expansion and increase execution risk for management's medium-term growth targets.

Tariff-Related Margin Pressure

A 100bp gross margin hit from tariffs shows exposure to trade-policy and input-cost shifts. If such tariffs or related supply-cost pressures persist, margin recovery will require price increases, sourcing changes, or productivity gains that can take multiple quarters and may pressure competitiveness.

China Licensing & Import Constraints

Regulatory and import licensing hurdles in China constrain market access and complicate supply chains for a key industrial market. Structural barriers can slow revenue penetration, delay project execution, and raise compliance and logistics costs over the medium term.

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

Strong, high-quality fundamentals: standout margins (TTM gross ~52%, net ~23%), very conservative leverage (debt-to-equity ~0.02), and robust cash generation (OCF > net income; FCF close to net income). The main offset is uneven top-line momentum (2024 decline followed by modest ~2% TTM growth).

Income Statement

Profitability is a standout: TTM (Trailing-Twelve-Months) gross margin (~52%) and net margin (~23%) remain strong, with operating profitability also holding near the high end of its multi-year range. Revenue growth is modest in TTM (about +2%) after a decline in 2024, suggesting a slower growth profile and some demand variability. Overall, earnings power is very solid, but top-line momentum is not consistently strong year to year.

Balance Sheet

The balance sheet is very conservatively structured with extremely low leverage (TTM debt-to-equity ~0.02) and a large equity base relative to assets. Returns on equity remain healthy (~19–25% across the period; ~20% in TTM), indicating strong profitability without relying on debt. The main watch item is that ROE has eased from prior-year peaks, but financial risk remains low given minimal debt.

Cash Flow

Cash generation is strong and high quality: TTM (Trailing-Twelve-Months) operating cash flow exceeds net income (coverage ~1.44) and free cash flow is close to net income (~0.93), supporting durability of reported earnings. Free cash flow rebounded materially versus 2024 and is far above the softer 2022 level, though historical volatility (notably the 2022 drop) is a reminder that cash conversion can fluctuate.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.24B	2.11B	2.20B	2.14B	1.99B
Gross Profit	1.17B	1.12B	1.16B	1.06B	1.03B
EBITDA	751.53M	678.86M	686.59M	641.62M	578.00M
Net Income	521.84M	486.08M	506.51M	460.64M	439.87M
Balance Sheet
Total Assets	3.27B	3.14B	2.72B	2.44B	2.44B
Cash, Cash Equivalents and Short-Term Investments	624.08M	675.34M	537.95M	339.20M	624.30M
Total Debt	60.96M	48.65M	50.06M	126.59M	226.11M
Total Liabilities	620.34M	555.08M	497.78M	579.25M	733.86M
Stockholders Equity	2.65B	2.58B	2.22B	1.86B	1.71B
Cash Flow
Free Cash Flow	637.92M	514.96M	466.24M	176.23M	323.33M
Operating Cash Flow	683.59M	621.70M	651.02M	377.39M	456.90M
Investing Cash Flow	-172.80M	-342.81M	-185.27M	-226.82M	-153.30M
Financing Cash Flow	-576.05M	-139.86M	-268.01M	-434.40M	-57.14M

Graco Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 87.33
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 87.33 is above the 20-day moving average (MA) of 85.91, above the 50-day MA of 83.71, and above the 200-day MA of 83.52, indicating a bullish trend. The MACD of 1.11 indicates Negative momentum. The RSI at 58.19 is Neutral, neither overbought nor oversold. The STOCH value of 50.65 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
GGG	81 Outperform	$14.48B	28.35	19.92%	1.32%	2.85%	3.09%
NDSN	79 Outperform	$15.29B	32.25	16.21%	1.64%	3.78%	4.85%
IEX	75 Outperform	$14.86B	31.39	12.21%	1.56%	7.09%	-2.29%
ITT	72 Outperform	$15.69B	30.29	17.85%	0.79%	8.01%	2.67%
CR	65 Neutral	$10.52B	29.18	17.92%	0.49%	-0.37%	21.77%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
GNRC	59 Neutral	$9.86B	31.98	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.

The most recent analyst rating on (GGG) stock is a Buy with a $90.00 price target. To see the full list of analyst forecasts on Graco stock, see the GGG Stock Forecast page.