ESCO Technologies Inc. ESE
ESCO Technologies has pulled back to the 200-day moving average ($274.83) with RSI at 32.1, creating an attractive entry after the stock's decline from the $321 area. Q3 FY2026 results confirmed continued momentum—sales up 14% to $339M with adjusted EPS up 38% to $2.20 and a record backlog—while EV/EBITDA of 25.9x sits below the peer median of 28.66x.
The FY2025 P/E of 22.8x is distorted by a non-operating gain that lifted net income to $299M against only $173M of operating income, but the underlying business shows 19.2% revenue growth, a 17.3% FCF margin, and a smart money fund count that has risen from 34 to 49 over two years as of the quarter ended 2026-06-30.
What could go wrong
- Earnings quality distortion. FY2025 net income of $299M far exceeds operating income of $173M due to a non-operating gain, meaning the headline P/E of 22.8x understates the true normalized earnings multiple.
- Elevated price-to-sales. P/S of 5.56x is 31.9% above the peer median of 4.21x, limiting upside if revenue growth decelerates from the 19.2% FY2025 pace.
- Persistent insider selling. Over the trailing 24 months insiders net sold approximately 9,190 shares worth $9.9M, with no cluster buy signal; recent transactions are small RSU accruals rather than open-market purchases.
- Technical breakdown risk. Stock is trading at $276.82, just above the 200-day MA of $274.83; a decisive close below this level with bearish MACD (line -10.6 vs signal -7.66) could trigger further selling.
What would change my mind
Where this comes from: GlobeNewsWire press release 2026-08-06 · FMP fundamentals FY2025 and derived_metrics · peer_relative composite · technicals as of 2026-08-25. Orin's read on ESE; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All ESE filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Portfolio Management | $555.7M | 0.0% of fund |
| Invesco | $527.1M | 0.0% of fund |
| Vanguard Capital Management | $408.9M | 0.0% of fund |
| State Street | $381.1M | 0.0% of fund |
| Geode Capital Management | $264.2M | 0.0% of fund |
| Price T Rowe Associates /Md/ | $192.1M | 0.0% of fund |
59 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 172 Form 4 filings, net −$9.4M. 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 →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 21.9× | — | 53.3× |
| EV/EBITDA | 24.9× | — | — |
| P/S | 5.34× | — | — |
| P/B | 4.3× | — | — |
15.8%
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
$413
$413 – $413 · +56% against today's price
- 9 buy or overweight
- 6 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 |
|---|---|---|---|---|---|---|
| ESEESCO Technologies Inc. | $7B | 21.9× | 24.9× | 42.0% | 24.4% | 20% |
| BMIBadger Meter, Inc. | $4B | 31.0× | 19.0× | 41.3% | 14.3% | 18% |
| CAMTCamtek Ltd. | $7B | 183.8× | 239.7× | 50.1% | 7.4% | 6% |
| CGNXCognex Corporation | $10B | 55.4× | 33.9× | 68.9% | 16.1% | 11% |
| ITRIItron, Inc. | $4B | 15.0× | 8.5× | 39.9% | 11.9% | 17% |
| LFUSLittelfuse, Inc. | $11B | — | 38.5× | 39.3% | -0.3% | -0% |
| NOVTNovanta Inc. | $5B | 90.8× | 33.7× | 42.5% | 6.0% | 5% |
| OSISOSI Systems, Inc. | $3B | 22.0× | 18.2× | 33.2% | 8.7% | 18% |
| TTMITTM Technologies, Inc. | $13B | 55.2× | 27.7× | 20.7% | 7.0% | 13% |
| VICRVicor Corporation | $13B | 88.8× | 97.1× | 56.6% | 30.6% | 20% |
| VNTVontier Corporation | $4B | 12.9× | 10.4× | 46.6% | 11.3% | 28% |
The median is of the 9 peers listed above and nothing else — check it against the column. This company trades 60.3% below 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.