One-glance verdict
Undervalued
$88.25 our estimate vs market $76.27
Wall Street consensus: $92.00 (4.2% higher than our fair-value estimate)
14% below our estimate, below the bear case
Fundamentals snapshot
Graco Inc.
GGG · NYQ · Industrials · Specialty Industrial Machinery
Current price
$76.27
52-week range
$73.26 - $95.69
Market cap
$12.66B
Balance sheet
Healthy
211.11x Strong cushion
Net cash $659.28M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 0.5% last year.
- Reward Returns 19.8% on equity, ahead of 50% of its peers.
- Risk Operating margin compressed from 26.7% to 25.5% over 3 years.
- Risk Insider ownership is only 0.7% (peer median: 1.1%).
What this company does
Graco Inc.
Graco makes specialized pumps and sprayers used for a huge variety of tasks, from a contractor painting a house to a factory making computer chips. The company makes most of its money selling this essential equipment to industrial businesses and professional contractors who need to precisely move, mix, or spray fluids and powders. Because its products are used in so many different industries around the world, the business can often remain steady even if one part of the economy slows down.
How the company got here
Graco was started in 1926 by two brothers, Russell and Leil Gray, who invented an air-powered grease gun to solve the problem of hand-powered grease guns not working in the cold Minneapolis winters. The company grew by making lubrication equipment, and during World War II, it supplied this equipment for the war effort. After the war, Graco expanded into making pumps for paint and other industrial fluids, introducing the first airless paint sprayer in 1957, which was a major turning point. The company went public in 1969, changing its name from Gray Company to Graco Inc., and has since grown by developing new products and acquiring other companies.
What it actually does
Graco makes equipment that moves, measures, mixes, and sprays a wide variety of fluids and powders. You might see their paint sprayers at a hardware store, used by both professional painters and do-it-yourself homeowners for painting houses. Their equipment is also used to put the lines on roads and parking lots. In factories, Graco's systems might be used to dispense sealants and adhesives for assembling cars or to move food products like peanut butter.
Contractor
This is Graco's largest business segment, making up almost half of the company's sales. It sells equipment to professionals in the construction and maintenance industries. This includes the paint sprayers you might see painters using, as well as machines for spraying texture on walls, marking lines on roads, and applying coatings to roofs.
Industrial
The Industrial segment provides equipment to factories and manufacturing plants. This part of the business makes systems for finishing products, like applying paint to cars or powder coatings to appliances. It also produces pumps for moving various fluids and equipment that automatically lubricates machinery.
Expansion Markets
This is a newer segment for Graco, focused on growing in different and emerging areas. It includes equipment for the semiconductor industry, pumps and valves for the oil and natural gas industry, and environmental equipment for monitoring and cleaning up groundwater. This segment is a key part of Graco's strategy to grow by acquiring companies in new or related markets.
What management is betting on now
Graco's current strategy focuses on growth through innovation and buying other companies (a strategy known as inorganic growth). They are investing in new product development, including more automated and data-driven systems. The company is also focused on expanding its business in international markets, particularly in Asia and Europe. A key part of their plan is the "Expansion Markets" segment, which is designed to enter new and related industries through strategic acquisitions.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$102.74M
FY2024 Q3
$159.22M
FY2024 Q4
$171.26M
FY2025 Q1
$114.82M
FY2025 Q2
$163.10M
FY2025 Q3
$175.70M
FY2025 Q4
$184.31M
FY2026 Q1
$108.11M
Revenue
$540.14M
Net income
$118.51M
Diluted EPS
0.70
Operating cash flow
$120.25M
Free cash flow
$108.11M
Fetching…
Sources
Revenue
$593.16M
Net income
$132.49M
Diluted EPS
0.78
Operating cash flow
$196.33M
Free cash flow
$184.31M
Fetching…
Sources
Revenue
$543.36M
Net income
$137.63M
Diluted EPS
0.82
Operating cash flow
$179.16M
Free cash flow
$175.70M
Fetching…
Sources
Revenue
$571.81M
Net income
$127.62M
Diluted EPS
0.76
Operating cash flow
$182.69M
Free cash flow
$163.10M
Fetching…
Sources
Revenue
$528.28M
Net income
$124.10M
Diluted EPS
0.72
Operating cash flow
$125.42M
Free cash flow
$114.82M
Fetching…
Sources
Revenue
$548.67M
Net income
$108.71M
Diluted EPS
0.63
Operating cash flow
$185.21M
Free cash flow
$171.26M
Fetching…
Sources
Revenue
$519.21M
Net income
$122.20M
Diluted EPS
0.71
Operating cash flow
$178.56M
Free cash flow
$159.22M
Fetching…
Sources
Revenue
$553.24M
Net income
$132.98M
Diluted EPS
0.77
Operating cash flow
$139.00M
Free cash flow
$102.74M
Fetching…
Sources
Is it cheap or expensive?
Fair value $88.25 vs current price $76.27
Wall Street consensus is the average analyst price target: $92.00 (4.2% higher than our fair-value estimate).
Our most-likely fair value is $88.25 a share — about 15.7% above today's price of $76.27, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $659.3M - more cash than debt. Interest coverage 211.1x.
Net debt
$-659.28M
Interest coverage
211.11x
Graco Inc.'s profit covers its interest bill about 211.1 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
GGG
BASELINE
Graco Inc.
Total debt $52.89M Interest coverage 211.11x This is the baseline the peer rows are being compared against.
Total debt $1.97B Interest coverage 6.95x -97% vs GGG Carries about 30.4x less debt cushion than GGG.
Total debt $1.90B Interest coverage 11.18x -95% vs GGG Carries about 18.9x less debt cushion than GGG.
Total debt $1.36B Interest coverage 14.28x -93% vs GGG Carries about 14.8x less debt cushion than GGG.
Total debt $2.89B Interest coverage 12.77x -94% vs GGG Carries about 16.5x less debt cushion than GGG.
Total debt $305.00M Interest coverage 43.69x -79% vs GGG Carries about 4.8x less debt cushion than GGG.
What you should know
The case for and against GGG
3 Rewards
2 Risks
Rewards
-
Revenue grew 0.5% last year.
-
Returns 19.8% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Operating margin compressed from 26.7% to 25.5% over 3 years.
-
Insider ownership is only 0.7% (peer median: 1.1%).
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)
24.92x
Forward P/E
22.56x
P/B
4.61x
P/S
5.63x
EV/EBITDA
16.39x
PEG ratio
2.53x
Profitability
How much profit each dollar creates
Gross margin
52.3%
Operating margin
25.5%
Net margin
23.0%
ROE
19.8%
ROA
12.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.02x
Current ratio
3.56x
Quick ratio
2.50x
Total debt
$52.89M
Total cash
$712.17M
Growth
How the business has been compounding
Revenue TTM
$2.25B
Revenue 5Y CAGR
3.0%
EPS TTM
3.06
EPS 5Y CAGR
5.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$678.42M
Free CF TTM
$637.92M
FCF margin
28.4%
Dividend
Shareholder payout
Yield
1.6%
Payout ratio
36.6%
Last ex-div date
2026-07-20