ESCO Technologies Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
ESCO Technologies posts strong fundamentals — FY2025 revenue growth of 19.2%, a 17.3% FCF margin, and low leverage with total debt of $230M against equity of $1.54B as of the fiscal year ended 30 Sep 2025 — but the headline P/E of 20.9x is distorted by a large non-operating gain that lifted FY2025 net income to $299M versus operating income of only $173M, meaning normalized earnings power is far lower than the multiple implies.
Quarterly revenue growth has decelerated from 35.0% in Q1 FY2026 to 14.4% by Q3 FY2026 (quarter ended 30 Jun), and the stock at $254.06 trades well below both its 50-day ($281.4) and 200-day ($283.9) moving averages as of 8 Oct, though RSI at 33.8 signals oversold conditions. The just-completed Megger acquisition (announced 1 Oct) could diversify revenue and provide accretion, but integration uncertainty plus insider net selling of $8.4M over 24 months argues for patience until growth reacceleration or a technical reclaim confirms the turnaround.
What could go wrong
- Valuation distortion from non-operating gain. FY2025 net income of $299M materially exceeds operating income of $173M, meaning the headline P/E of 20.9x understates the true earnings multiple on a normalized basis.
- Revenue growth deceleration. Quarterly YoY revenue growth slowed from 35.0% in Q1 FY2026 to 16.5% in Q2 and 14.4% in Q3 FY2026 (quarter ended 30 Jun), suggesting the post-FY2025 surge is fading.
- Megger integration risk. The acquisition of Megger Group Limited closed 1 Oct; execution risk around integration, debt assumption, and synergy realization could pressure near-term margins.
- Technical downtrend and insider selling. Stock at $254.06 is below both 50-day ($281.4) and 200-day ($283.9) moving averages as of 8 Oct, with insider net dispositions of $8.4M over 24 months and zero open-market acquisitions.
What would change my mind
Where this comes from: FY25 fundamentals · peer comparison · quarterly results · technicals. Orin's read on ESE; not advice.
How has the share price moved?
Up 8.7% over twelve months, from $219.19 on 27 Oct 2025 to $238.23 at the Tue 27 Oct 2026 close. Its highest close in that time was $354.90 on 25 Jun 2026; the last close is 32.9% 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, 1.0M, on 26 Jun 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 ESE filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $1.4B | 0.0% |
| Vanguard Portfolio Management | $555.7M | 0.0% |
| Invesco | $527.1M | 0.0% |
| Vanguard Capital Management | $408.9M | 0.0% |
| State Street | $381.1M | 0.0% |
| Geode Capital Management | $264.2M | 0.0% |
| T. Rowe Price Associates | $192.1M | 0.0% |
| Capital World Investors | $166.2M | 0.0% |
| Morgan Stanley | $159.2M | 0.0% |
| Norges Bank | $109.1M | 0.0% |
60 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 161 Form 4 filings; open-market trades net −$8.4M. Of the 50 on hand, none was an open-market trade — the rest are grants, option exercises and tax withholding.
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Start 3 free days →How is it priced, against its own past and its sector?
Priced at 19.6× its last 12 months of profit (Tue 27 Oct close) — higher than in 1 of its last 5 fiscal years (middle 29.1×); the typical Technology company on the NYSE is at 39.5×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 19.6×below usual | 29.1× | 39.5× |
| P/S | 4.78×above usual | 3.15× | — |
| EV/EBITDA | 20.4×above usual | 17.1× | — |
| P/B | 3.8×above usual | 2.4× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
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?
Few analysts publish on it: 3 firms rated it in the last 18 months. Every 12-month price target on file is $413 (the low and the high are the same, so it may be a single analyst's) — 73% above the Tue 27 Oct close price. With so few, it is not a consensus; it is their published opinion, not Orin's.
$413
$413 – $413 · +73% against the last close
- 3 buy or overweight
- 0 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 19.6× its last 12 months of profit; the middle P/E of the 8 companies it is compared to that made a profit is 34.4×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| ESEESCO Technologies Inc. | $6B | 19.6× | 20.4× | 42.0% | 24.4% | 20% |
| AMEAMETEK, Inc. | $56B | 35.8× | 24.0× | 36.6% | 20.0% | 15% |
| CRCrane Company | $11B | 32.9× | 20.9× | 30.1% | 12.4% | 16% |
| DCODucommun Incorporated | $2B | 38.9× | 21.0× | 27.8% | 6.1% | 8% |
| MOG-AMoog Inc. | $11B | 29.7× | 19.8× | 27.9% | 8.7% | 18% |
| NOVTNovanta Inc. | $6B | 93.9× | 33.8× | 42.5% | 6.0% | 5% |
| OSISOSI Systems, Inc. | $3B | 21.7× | 14.7× | 33.2% | 8.7% | 18% |
| TDYTeledyne Technologies Incorporated | $30B | 29.9× | 19.3× | 38.5% | 15.8% | 9% |
| VICRVicor Corporation | $10B | 53.9× | 53.5× | 60.6% | 32.2% | 22% |
| VPGVishay Precision Group, Inc. | $507M | lost money | 27.8× | 38.7% | −0.9% | −1% |
- VPG: lost money over the last 12 months, so no P/E.
- 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 19.6× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now19.6×
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?
Technology companies on the NYSE were priced at a typical 39.5× their yearly profit (Tue 27 Oct close).
- Now39.5×
- 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 $83 a share — 65% below the $238.12 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $83 | 65% below $238.12 |
| Levered | $113 | 53% below $238.12 |
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.