ESAB Corporation ESAB
ESAB is a hold after the stock has corrected roughly 27% year-to-date to $78.89, bringing valuation closer to peers even as earnings continue to deteriorate. Q2 2026 results showed record core sales and adjusted EBITDA with double-digit automation growth, but diluted EPS of $1.33 missed the $1.37 consensus and FY2025 EPS fell 13.7% to $3.72 as gross margin compressed from 37.85% to 35.54% and total debt rose to $1.43B.
At 28.9x trailing earnings the stock still trades at a 22.5% premium to the peer median, but the 45% discount on price-to-sales, expanding operating margin of 17.3%, and an RSI of 36 suggest the operational franchise remains intact while much of the bad news is priced in.
What could go wrong
- Margin compression persists. Gross margin fell from 37.85% in FY2024 to 35.54% in FY2025; if input cost inflation or acquisition integration drag continues, profitability may not recover.
- Rising debt burden. Total debt climbed from $1.16B in FY2024 to $1.43B in FY2025, increasing interest expense and pressuring net margin down to 7.98% from 9.66%.
- Free cash flow erosion. FCF dropped from $303.6M in FY2024 to $213.3M in FY2025, a 30% decline that limits financial flexibility for buybacks or further deleveraging.
- Cyclical industrial demand weakening. ESAB's welding and fabrication end markets are tied to industrial capex cycles; a broad manufacturing slowdown could pressure volumes despite automation strength.
What would change my mind
Where this comes from: GuruFocus news (2026-08-21) and technicals last_close as of 2026-08-19 · Zacks Investment Research news (2026-08-06) · MarketBeat news (2026-08-08) · FMP fundamentals FY2025 and derived_metrics. Orin's read on ESAB; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All ESAB filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Price T Rowe Associates /Md/ | $801.5M | 0.1% of fund |
| Invesco | $273.3M | 0.0% of fund |
| Vanguard Capital Management | $257.4M | 0.0% of fund |
| Vanguard Portfolio Management | $244.1M | 0.0% of fund |
| Capital Research Global Investors | $183.7M | 0.0% of fund |
| State Street | $179.8M | 0.0% of fund |
55 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 426 Form 4 filings, net $160.2M. Of the 50 on hand, 0 were open-market purchases and 1 a sale— the rest are grants, option exercises and tax withholding.
Ask Orin about ESAB
Orin answers questions about ESAB from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 24.7× | — | 44.5× |
| EV/EBITDA | 14.2× | — | — |
| P/S | 1.37× | — | — |
| P/B | 1.6× | — | — |
7.2%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $0.2B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$135
$130 – $140 · +103% against today's price
- 9 buy or overweight
- 1 hold
- 0 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| ESABESAB Corporation | $4B | 24.7× | 14.2× | 35.7% | 5.7% | 8% |
| ADTADT Inc. | $5B | 8.2× | 4.6× | 51.4% | 12.0% | 17% |
| FSSFederal Signal Corporation | $7B | 24.1× | 15.2× | 29.2% | 11.7% | 20% |
| MOG-AMoog Inc. | $12B | 31.5× | 21.1× | 27.9% | 8.7% | 18% |
| RRyder System, Inc. | $9B | 19.3× | 6.7× | 18.9% | 3.9% | 17% |
| SAIASaia, Inc. | $9B | 33.1× | 14.8× | 16.1% | 8.2% | 11% |
| SSDSimpson Manufacturing Co., Inc. | $7B | 19.0× | 11.9× | 45.8% | 15.6% | 18% |
The median is of the 6 peers listed above and nothing else — check it against the column. This company trades 13.5% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.