Education
About Us
Working with TipRanks
Follow Us
Gates Industrial Corp Plc (GTES)
NYSE:GTES
Top Page
Gates Industrial
(NYSE:GTES)
Select Model
Select Model
Rating:65Neutral
Price Target:
$23.00
▼(-0.22% Downside)
Gates Industrial's overall stock score is driven by strong financial performance and strategic initiatives highlighted in the earnings call. However, bearish technical indicators and moderate valuation limit the score. The company's restructuring plans and market challenges also present short-term risks.
Positive Factors
Strong Cash Flow Generation
Robust cash flow generation supports operational flexibility and strategic investments, enhancing long-term financial stability.
Operational Efficiency
High operational efficiency indicates effective cost management and competitive positioning, supporting sustainable profitability.
Improved Leverage
Reduced leverage enhances financial flexibility and reduces risk, positioning the company for future growth and resilience.
Negative Factors
Subdued Industrial Demand
Weak demand in key markets like North America and Europe could hinder revenue growth and impact future earnings potential.
Restructuring Costs
Restructuring efforts may lead to short-term margin pressures, affecting profitability and requiring careful cost management.
Lowered Cash Flow Outlook
Reduced cash flow conversion due to restructuring outlays may limit available capital for growth initiatives and shareholder returns.
Gates Industrial (GTES) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.89B
Dividend YieldN/A
Average Volume (3M)1.88M
Price to Earnings (P/E)25.4
Beta (1Y)1.34
Revenue Growth-0.75%
EPS Growth9.22%
CountryUS
Employees14,100
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.39
Shares Outstanding258,280,400
10 Day Avg. Volume1,572,543
30 Day Avg. Volume1,883,896
Financial Highlights & Ratios
PEG Ratio-2.15
Price to Book (P/B)1.78
Price to Sales (P/S)1.58
P/FCF Ratio18.12
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue1.70
Enterprise Value/Gross Profit4.21
Enterprise Value/Ebitda8.40
Forecast
1Y Price Target
$27.13Price Target Upside17.70% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)1.61
Revenue Forecast (FY)$3.55B
Gates Industrial Business Overview & Revenue Model
Company DescriptionGates Industrial Corporation plc manufactures and sells engineered power transmission and fluid power solutions worldwide. It operates in two segments, Power Transmission and Fluid Power. The company offers synchronous or asynchronous belts, including V-belts, CVT belts, and Micro-V belts, as well as related components, such as sprockets, pulleys, water pumps, tensioners, or other accessories; solutions for stationary and mobile drives, engine systems, personal mobility, and vertical lifts application platforms; metal drive components; and kits for automotive replacement channels. It also provides fluid power solutions comprising stationary hydraulics, mobile hydraulics, engine systems, and other industrial application platforms; and hydraulics, including hoses, tubing, and fittings, as well as assemblies. The company serves construction, agriculture, energy and resources, automotive, transportation, mobility and recreation, consumer products, and various industrial applications, such as automated manufacturing and logistics systems. It sells its engineered products under the Gates brand. The company offers its products to replacement channel customers, as well as to original equipment manufacturers. Gates Industrial Corporation plc was founded in 1911 and is headquartered in Denver, Colorado.
How the Company Makes MoneyGates Industrial generates revenue primarily through the sale of its core products, which include power transmission belts, hydraulic hoses, and related components. The company operates on a direct sales model, reaching customers through a network of distributors and suppliers across multiple industries. Key revenue streams include OEM (original equipment manufacturer) sales, aftermarket sales for replacement parts, and custom-engineered solutions tailored to specific customer needs. Additionally, Gates benefits from strategic partnerships with other manufacturers and suppliers, which expand its market reach and product offerings. The company also invests in research and development to innovate and improve its product lines, helping to maintain a competitive edge and drive sales growth.
Gates Industrial Key Performance Indicators (KPIs)
Gates Industrial Earnings Call Summary
Earnings Call Date:Oct 29, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 05, 2026
Earnings Call Sentiment Neutral
Gates Industrial Corporation's earnings call highlighted solid execution and margin improvements despite a challenging macroeconomic environment. While there were notable achievements in adjusted EBITDA margin and Personal Mobility growth, the company faced subdued demand in key markets and outlined significant restructuring plans that could impact short-term margins. The sentiment reflects cautious optimism with strategic initiatives expected to drive future growth.Q3-2025 Updates
Positive Updates
Record Adjusted EBITDA Margin
Gates achieved a record third-quarter adjusted EBITDA margin of 22.9%, an increase of 90 basis points year-over-year.
Net Leverage Improvement
The company's net leverage ratio declined to 2.0x, a reduction of 0.4x compared to last year's third quarter, with expectations to reduce it further by year-end.
Personal Mobility Growth
The Personal Mobility segment reported year-on-year growth exceeding 20%, contributing significantly to overall performance.
Updated 2025 Guidance
Gates raised its adjusted EPS midpoint to $1.50 per share and maintained its full-year 2025 adjusted EBITDA midpoint of $780 million.
New Share Repurchase Authorization
The Board approved a new $300 million share repurchase authorization, replacing the prior authorization.
Negative Updates
Subdued Macro Industrial Demand
Overall macro industrial demand conditions remain subdued, affecting growth, particularly in North American and European agriculture.
Commercial On-Highway Decline
Commercial On-Highway sales declined mid-single digits due to decreasing production rates in North America.
Restructuring and Increased Costs
The company plans to close multiple factories and execute an ERP conversion, leading to expected unfavorable year-over-year impacts on adjusted EBITDA margin in the first half of 2026.
Challenges in Agriculture Market
The agriculture market experienced incremental declines in North America and Europe, with OEM production cuts affecting performance.
Lowered Free Cash Flow Conversion Outlook
The free cash flow conversion outlook was lowered to 80%-90% from 90%+ due to increased restructuring cash outlays.
Company Guidance
During Gates Industrial Corporation's third quarter 2025 earnings call, the company provided a comprehensive update on its financial performance and guidance. Gates achieved a core revenue growth of 1.7% and a total revenue increase of 3%, benefiting from favorable foreign currency effects. The adjusted EBITDA margin reached a record for a third quarter at 22.9%, contributing to an 18% year-over-year increase in adjusted earnings per share to $0.39. The company reduced its net leverage ratio to 2.0x and expects it to be below 2x by year-end. Gates has adjusted its 2025 guidance by raising the adjusted EPS midpoint to $1.50 per share but slightly lowered its core sales growth outlook. The adjusted EBITDA midpoint remains at $780 million. Additionally, the company announced a new $300 million share repurchase authorization and outlined its ongoing restructuring and strategic system conversion plans aimed at optimizing its footprint. Gates anticipates these efforts to impact adjusted EBITDA margins in early 2026 but expects improvements in the latter half of the year, targeting a 23.5% run rate. The company remains optimistic about its end market demand stabilizing or improving in 2026, supported by growth in Personal Mobility and data center opportunities.Gates Industrial Financial Statement Overview
Summary
Gates Industrial demonstrates strong financial health with impressive revenue growth and profitability improvements. The company effectively manages its debt levels, enhancing financial stability. However, attention is needed on cash flow management to ensure sustainable growth.Income Statement
Gates Industrial shows a strong income statement with a consistent increase in gross profit margin and net profit margin over the years, indicating improved efficiency and profitability. The TTM data reveals a significant revenue growth rate of 73.7%, suggesting robust sales performance. EBIT and EBITDA margins are also healthy, reflecting effective cost management. However, the net profit margin, while improving, remains relatively modest compared to industry leaders.82
Very Positive
Balance Sheet
The balance sheet is solid with a low debt-to-equity ratio of 0.046 in the TTM period, demonstrating strong financial leverage management. The return on equity is improving, indicating effective use of equity to generate profits. The equity ratio is stable, showing a balanced asset structure. However, historical data shows higher leverage, which could pose risks if not managed carefully.75
Positive
Cash Flow
Cash flow analysis reveals a mixed picture. The operating cash flow to net income ratio is healthy, indicating good cash generation relative to net income. However, the free cash flow growth rate is negative in the TTM period, suggesting potential challenges in maintaining cash reserves. The free cash flow to net income ratio remains strong, reflecting efficient cash utilization.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.42B | 3.41B | 3.57B | 3.55B | 3.47B | 2.79B |
| Gross Profit | 1.38B | 1.36B | 1.36B | 1.25B | 1.34B | 1.03B |
| EBITDA | 692.80M | 677.60M | 656.90M | 614.40M | 705.80M | 443.90M |
| Net Income | 236.70M | 194.90M | 232.90M | 220.80M | 297.10M | 79.40M |
Balance Sheet | ||||||
| Total Assets | 7.15B | 6.79B | 7.25B | 7.19B | 7.53B | 7.43B |
| Cash, Cash Equivalents and Short-Term Investments | 689.40M | 682.00M | 720.60M | 581.40M | 660.90M | 524.10M |
| Total Debt | 2.36B | 2.48B | 2.56B | 2.61B | 2.71B | 2.84B |
| Total Liabilities | 3.43B | 3.45B | 3.71B | 3.75B | 4.05B | 4.24B |
| Stockholders Equity | 3.37B | 3.02B | 3.22B | 3.11B | 3.10B | 2.81B |
Cash Flow | ||||||
| Free Cash Flow | 295.40M | 296.50M | 409.60M | 178.80M | 295.40M | 241.60M |
| Operating Cash Flow | 399.20M | 379.60M | 481.00M | 265.80M | 382.40M | 309.00M |
| Investing Cash Flow | -111.00M | -104.40M | -81.80M | -90.70M | -86.00M | -77.50M |
| Financing Cash Flow | -168.10M | -286.70M | -258.30M | -253.10M | -148.60M | -353.80M |
Gates Industrial Technical Analysis
Positive
23.05
Price Trends
22.03
Positive
23.65
Negative
22.69
Positive
Market Momentum
0.12
Negative
55.84
Neutral
65.62
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GTES, the sentiment is Positive. The current price of 23.05 is above the 20-day moving average (MA) of 22.07, above the 50-day MA of 22.03, and above the 200-day MA of 22.69, indicating a bullish trend. The MACD of 0.12 indicates Negative momentum. The RSI at 55.84 is Neutral, neither overbought nor oversold. The STOCH value of 65.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GTES.
Gates Industrial Risk Analysis
Gates Industrial disclosed 42 risk factors in its most recent earnings report. Gates Industrial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Gates Industrial Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $9.55B | 21.86 | 20.97% | 1.17% | 3.19% | 69.89% | |
77 Outperform | $10.45B | 45.57 | 12.76% | ― | 12.60% | 24.02% | |
76 Outperform | $5.36B | 37.73 | 13.29% | 0.26% | 14.87% | 15.63% | |
66 Neutral | $6.66B | 229.20 | 1.58% | ― | 7.81% | ― | |
65 Neutral | $5.89B | 25.35 | 7.33% | ― | -0.75% | 9.22% | |
64 Neutral | $4.84B | 56.43 | 5.80% | 0.56% | 6.44% | 101.24% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
GTES
Gates Industrial
23.05
2.56
12.49%
NPO
Enpro
241.74
69.43
40.29%
FLS
Flowserve
76.62
14.07
22.50%
SPXC
SPX
213.61
65.11
43.85%
CSW
CSW Industrials
328.94
-59.85
-15.39%
MIR
Mirion Technologies
27.00
10.45
63.14%
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.