One-glance verdict
Overvalued
$27.02 our estimate vs market $68.12
Wall Street consensus: $131.18 (385.6% higher than our fair-value estimate)
152% above our estimate, beyond the bull case
Fundamentals snapshot
ESAB Corporation
ESAB · NYQ · Industrials · Metal Fabrication
Current price
$68.12
52-week range
$67.52 - $137.42
Market cap
$4.23B
Balance sheet
Stretched
5.24x Adequate
Net debt $2.32B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 5.6% last year.
- Reward Free cash flow was positive in 6/10 years.
- Reward Trades at 21.4x P/E vs peer median 24.5x (12.8% cheaper).
- Risk Operating margin compressed from 13.6% to 12.0% over 3 years.
What this company does
ESAB Corporation
ESAB Corporation sells professional welding and cutting equipment, but a large part of its business comes from the supplies that get used up, like welding wire and gas nozzles. This is important because customers have to keep buying these "consumable" products, which can create a more predictable stream of revenue (money the company earns from sales). This business model of selling items that require regular replacement helps make the company's income more stable over time.
How the company got here
ESAB's story starts in Sweden in 1904, when its founder, Oscar Kjellberg, invented the first coated welding electrode, a key innovation that dramatically improved the quality of welding. [6, 7, 12] For over a century, the company grew into a global leader in welding and cutting. [2, 4] After being part of other industrial companies for several decades, including Colfax Corporation, ESAB became a standalone, publicly traded company in 2022. [2, 7, 12] This move allowed it to focus entirely on its core business of fabrication and gas control technology. [2, 7]
What it actually does
At its core, ESAB makes the tools and materials needed to join or cut metal, a process known as fabrication. [4] Think of the sparks you see at a construction site or in a car repair shop—chances are ESAB's products are involved, from the welding machine itself to the wires that are melted to create the bond. [2] Beyond welding, the company also produces highly specialized equipment for controlling the flow of gases, which is critical in industries ranging from manufacturing to healthcare. [7] Their products are sold worldwide to everyone from individual welders to large industrial manufacturers. [2]
Fabrication Technology
This is ESAB's largest and original business, providing everything needed for welding and cutting. [2, 5] It sells equipment like welding power sources and cutting machines, but a huge part of this business is in consumables (the materials that get used up during the process, like welding wires and electrodes). [2] Because these consumables need to be constantly replaced by customers, it creates a steady, repeat business for the company. [2] This segment serves a wide range of industries, including automotive, construction, shipbuilding, and general manufacturing. [12]
Gas Control
This part of the company focuses on equipment that manages and controls gases. [2, 5] This includes products like regulators and valves that ensure the safe and precise delivery of gases for industrial applications, such as welding, but also for specialty areas like healthcare and scientific research. [2, 7] For example, the oxygen regulators used in hospitals are a product from this segment. [7] This business is important because it diversifies ESAB into markets that are less connected to the ups and downs of the heavy industrial economy. [2]
What management is betting on now
ESAB's main strategy is to grow by acquiring other companies that add new technologies or give them access to new markets, a tactic known as bolt-on acquisitions. [2, 14] They are also focused on expanding their Gas Control business to be less dependent on traditional industrial markets and move further into areas like healthcare. [2] The company consistently invests in creating new products that make welding and cutting safer and more efficient for workers. [2, 15] Internally, they use a system called ESAB Business Excellence to continuously improve their operations and increase their margins (the amount of profit they make from their sales). [2, 12]
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$102.17M
FY2025 Q2
$28.12M
FY2025 Q3
$37.45M
FY2025 Q4
$70.30M
FY2026 Q2
$33.21M
FY2026 Q3
$15.68M
Revenue
$807.63M
Net income
$32.35M
Diluted EPS
0.50
Operating cash flow
$33.42M
Free cash flow
$15.68M
Fetching…
Sources
Revenue
$745.60M
Net income
$47.64M
Diluted EPS
0.78
Operating cash flow
$46.91M
Free cash flow
$33.21M
Fetching…
Sources
Revenue
$727.85M
Net income
$54.85M
Diluted EPS
0.90
Operating cash flow
$81.48M
Free cash flow
$70.30M
Fetching…
Sources
Revenue
$715.59M
Net income
$66.88M
Diluted EPS
1.09
Operating cash flow
$46.63M
Free cash flow
$37.45M
Fetching…
Sources
Revenue
$678.14M
Net income
$67.36M
Diluted EPS
1.10
Operating cash flow
$35.41M
Free cash flow
$28.12M
Fetching…
Sources
Revenue
$670.76M
Net income
$53.74M
Diluted EPS
0.87
Operating cash flow
$126.88M
Free cash flow
$102.17M
Fetching…
Sources
Is it cheap or expensive?
Fair value $27.02 vs current price $68.12
Wall Street consensus is the average analyst price target: $131.18 (385.6% higher than our fair-value estimate).
Our most-likely fair value is $27.02 a share — about 60.3% below today's price of $68.12, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Stretched
Net debt $2.3B. Interest coverage 5.2x.
Net debt
$2.32B
Interest coverage
5.24x
ESAB Corporation's profit covers its interest bill about 5.2 times over. which is weaker than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
ESAB
BASELINE
ESAB Corporation
Total debt $2.54B Interest coverage 5.24x This is the baseline the peer rows are being compared against.
Total debt $1.20B Interest coverage 14.28x +172% vs ESAB Carries about 2.7x more debt cushion than ESAB.
Total debt $9.69B Interest coverage 14.44x +175% vs ESAB Carries about 2.8x more debt cushion than ESAB.
Total debt $763.71M Interest coverage 16.86x +222% vs ESAB Carries about 3.2x more debt cushion than ESAB.
Total debt $52.21M Interest coverage 211.11x +3,927% vs ESAB Carries about 40.3x more debt cushion than ESAB.
Total debt $1.82B Interest coverage 6.95x +33% vs ESAB Carries about 1.3x more debt cushion than ESAB.
What you should know
The case for and against ESAB
3 Rewards
1 Risk
Rewards
-
Revenue grew 5.6% last year.
-
Free cash flow was positive in 6/10 years.
-
Trades at 21.4x P/E vs peer median 24.5x (12.8% cheaper).
Risks
-
Operating margin compressed from 13.6% to 12.0% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
21.35x
Forward P/E
10.43x
P/B
1.79x
P/S
1.41x
EV/EBITDA
12.87x
PEG ratio
0.69x
Profitability
How much profit each dollar creates
Gross margin
37.0%
Operating margin
12.0%
Net margin
5.7%
ROE
8.7%
ROA
5.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.98x
Current ratio
1.96x
Quick ratio
0.99x
Total debt
$2.54B
Total cash
$217.49M
Growth
How the business has been compounding
Revenue TTM
$3.00B
Revenue 5Y CAGR
4.0%
EPS TTM
3.19
EPS 5Y CAGR
-0.2%
Cash flow
How much cash the business throws off
Operating CF TTM
$258.87M
Free CF TTM
$213.28M
FCF margin
7.1%
Dividend
Shareholder payout
Yield
0.7%
Payout ratio
13.2%
Last ex-div date
2026-10-02