ESAB Corporation
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
ESAB is a hold.
The prior sell thesis has largely played out in the price — the stock has fallen to $66.39 as of 12 Oct, sitting 31% below its 200-day moving average of $96.69 — but the fundamental picture is genuinely mixed. Revenue growth is accelerating (Q2 2026 revenue rose 12.9% YoY to $807.6M, Q1 2026 up 9.9% to $745.6M), yet profitability is deteriorating sharply: Q2 2026 operating income fell to $78.7M from $109.1M in the year-ago quarter despite the revenue gain, and FY2025 net income declined 14.4% to $226.8M with gross margin compressing to 35.5% from 37.9%. The September 21 South Carolina asbestos ruling adds unquantified legal liability, and insiders are net sellers (152,308 shares disposed over 24 months), but the stock's PS ratio of 1.35x — a 50% discount to the peer median of 2.69x — and a 24.3x PE only modestly above the peer median of 21.9x suggest much of the bad news is now priced in.
What could go wrong
- Asbestos liability escalation. The September 21, 2026 South Carolina court ruling found ESAB responsible for Cape Asbestos's historical operations; the financial exposure remains unquantified and could materially exceed expectations.
- Margin compression continues. Q2 2026 operating income fell to $78.7M from $109.1M in Q2 2025 despite 12.9% revenue growth, and FY2025 gross margin compressed to 35.5% from 37.9% — if this trend persists, earnings quality will deteriorate further.
- Rising leverage. Total debt increased to $1.43B in FY2025 from $1.16B in FY2024, while FCF declined to $213.3M from $303.6M, reducing financial flexibility.
- Insider selling pressure. Over the trailing 24 months insiders net disposed 152,308 shares worth $18.8M, with only 1 open-market acquisition against 31 dispositions.
What would change my mind
Where this comes from: technicals, 12 Oct · Q2 2026 and Q2 2025 results · FY25 fundamentals · peer comparison. Orin's read on ESAB; not advice.
How has the share price moved?
Down 43.0% over twelve months, from $121.47 on 27 Oct 2025 to $69.29 at the Tue 27 Oct 2026 close. Its highest close in that time was $134.82 on 13 Feb 2026; the last close is 48.6% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 2.5M, on 8 Oct 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All ESAB filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| T. Rowe Price Associates | $801.5M | 0.1% |
| BlackRock | $524.5M | 0.0% |
| Invesco | $273.3M | 0.0% |
| Vanguard Capital Management | $257.4M | 0.0% |
| Vanguard Portfolio Management | $244.1M | 0.0% |
| Capital Research Global Investors | $183.7M | 0.0% |
| State Street | $179.8M | 0.0% |
| FMR | $151.9M | 0.0% |
| JPMorgan Chase | $138.5M | 0.0% |
| Geode Capital Management | $107.7M | 0.0% |
56 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 402 Form 4 filings; open-market trades net −$10.3M. 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 →How is it priced, against its own past and its sector?
Priced at 32.8× its last 12 months of profit (Thu 5 Nov close); the typical Industrials company on the NYSE is at 33.7×. It has too few years of its own for a usual level.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 32.8× | — | 33.7× |
| P/S | 1.59× | — | — |
| EV/EBITDA | 15.0× | — | — |
| P/B | 1.9× | — | — |
- Listed on 29 Mar 2022 — earlier years are not shown.
- So it has no full fiscal year of its own on file yet — no usual level.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $122 (from $110 to $133) — 76% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$122
$110 – $133 · +76% against the last close
- 7 buy or overweight
- 1 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 32.8× its last 12 months of profit; the middle P/E of the 6 companies it is compared to that made a profit is 23.0×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| ESABESAB Corporation | $5B | 32.8× | 15.0× | 36.3% | 5.1% | 7% |
| ADTADT Inc. | $5B | 8.9× | 4.7× | 51.4% | 12.0% | 17% |
| FSSFederal Signal Corporation | $7B | 24.7× | 15.5× | 29.2% | 11.7% | 20% |
| MOG-AMoog Inc. | $11B | 29.7× | 19.8× | 27.9% | 8.7% | 18% |
| RRyder System, Inc. | $11B | 21.3× | 4.9× | 18.7% | 4.0% | 18% |
| SAIASaia, Inc. | $9B | 32.8× | 14.7× | 16.1% | 8.2% | 11% |
| SSDSimpson Manufacturing Co., Inc. | $8B | 20.6× | 12.2× | 45.6% | 15.6% | 18% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 32.8× its last 12 months of profit (Thu 5 Nov close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now32.8×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Industrials companies on the NYSE were priced at a typical 33.7× their yearly profit (Tue 27 Oct close).
- Now33.7×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $67 a share — 1% below the $67.89 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $67 | 1% below $67.89 |
| Levered | $40 | 41% below $67.89 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.