One-glance verdict
Undervalued
$111.01 our estimate vs market $67.20
Wall Street consensus: $83.29 (-25.0% lower than our fair-value estimate)
39% below our estimate, below the bear case
Fundamentals snapshot
Graco Inc.
GGG · NYQ · Industrials · Specialty Industrial Machinery
Current price
$67.20
52-week range
$65.96 - $95.69
Market cap
$10.78B
Balance sheet
Healthy
211.11x Strong cushion
Net debt $24.85M. 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 3.3% last year.
- Reward Returns 20.4% on equity, ahead of 60% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Operating margin compressed from 26.7% to 25.3% over 3 years.
What this company does
Graco Inc.
Graco makes specialized equipment that pumps, mixes, and sprays fluids, from the paint sprayers used by building contractors to the precision pumps used in factories that make computer chips. The company primarily earns money by selling these essential tools across many different industries like construction, manufacturing, and energy. This matters because having a broad customer base can lead to more stable sales, helping protect the company even if one specific industry has a slow year.
How the company got here
Graco started in 1926 when two brothers, Russell and Leil Gray, invented an air-powered grease gun because the hand-powered ones didn't work well in the cold Minneapolis winters. The company, originally called Gray Company, initially focused on lubrication equipment for cars. Over the years, it expanded into handling other materials like paint and industrial fluids, and in 1957, the introduction of the airless spray gun was a major turning point. The company went public in 1969, changing its name to Graco, and has since grown by developing new products and acquiring other companies to become a global leader in fluid-handling systems.
What it actually does
Graco makes equipment that moves, measures, controls, and sprays a wide variety of fluids and powders. Think of the paint sprayers used by professional painters, the machines that put stripes on roads, or the pumps that move chemicals in a factory. Their products are used in many industries, from construction and manufacturing to automotive and food production. Essentially, if a liquid or powder needs to be moved or applied in a precise way, there's a good chance a Graco product is involved.
Contractor
This is Graco's largest business area, making up almost half of its sales. It provides equipment for professional painters and construction workers, such as airless paint sprayers for walls, machines for painting lines on roads and parking lots, and sprayers for applying texture to ceilings. The customers are typically contractors and do-it-yourself homeowners who buy these products through distributors and retail stores. This segment puts the Graco brand directly in the hands of professional users.
Industrial
The Industrial segment provides equipment for factories and manufacturing plants, and it accounts for a significant portion of Graco's revenue. This includes systems for applying paint, sealants, and adhesives in automated production lines, like those used in making cars or furniture. They also make pumps for moving various fluids like chemicals and food ingredients within a manufacturing facility. The customers are other businesses that need precise and reliable equipment for their production processes.
Expansion Markets
This segment is a smaller but important part of Graco's business, focusing on specialized markets. It produces pumps and valves for the oil and natural gas industry, equipment for monitoring and cleaning up the environment, and pumps used in making semiconductors. This division also includes equipment for automatically lubricating machinery in factories and on vehicles. The customers in this segment are in highly specialized industries that require very specific fluid handling solutions.
What management is betting on now
Graco's current strategy focuses on a few key areas to keep the company growing. They are heavily invested in creating new products to solve customer problems and drive what's known as organic growth (growth from its own business activities, not from buying other companies). The company also plans to continue making strategic acquisitions (buying other companies) to enter new markets and add new technologies. Finally, they are focused on a concept they call "One Graco," which aims to make their global operations more efficient and work together more smoothly to better serve customers.
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 Q4
$171.26M
FY2025 Q1
$114.82M
FY2025 Q2
$163.10M
FY2025 Q3
$175.70M
FY2025 Q4
$184.31M
FY2026 Q1
$108.11M
FY2026 Q2
$161.34M
FY2026 Q3
$146.34M
Revenue
$586.38M
Net income
$121.56M
Diluted EPS
0.75
Operating cash flow
$165.47M
Free cash flow
$146.34M
Fetching…
Sources
Revenue
$590.55M
Net income
$144.93M
Diluted EPS
0.87
Operating cash flow
$177.72M
Free cash flow
$161.34M
Fetching…
Sources
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
Is it cheap or expensive?
Fair value $111.01 vs current price $67.20
Wall Street consensus is the average analyst price target: $83.29 (-25.0% lower than our fair-value estimate).
Our most-likely fair value is $111.01 a share — about 65.2% above today's price of $67.20, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net debt $24.9M. Interest coverage 211.1x.
Net debt
$24.85M
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 $164.67M Interest coverage 211.11x This is the baseline the peer rows are being compared against.
Total debt $1.82B Interest coverage 6.95x -97% vs GGG Carries about 30.4x less debt cushion than GGG.
Total debt $1.75B Interest coverage 11.18x -95% vs GGG Carries about 18.9x less debt cushion than GGG.
Total debt $9.37B Interest coverage 14.44x -93% vs GGG Carries about 14.6x less debt cushion than GGG.
Total debt $3.26B Interest coverage 12.51x -94% vs GGG Carries about 16.9x 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.
What you should know
The case for and against GGG
3 Rewards
1 Risk
Rewards
-
Revenue grew 3.3% last year.
-
Returns 20.4% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Operating margin compressed from 26.7% to 25.3% 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)
21.68x
Forward P/E
19.43x
P/B
4.36x
P/S
4.66x
EV/EBITDA
15.06x
PEG ratio
2.06x
Profitability
How much profit each dollar creates
Gross margin
52.0%
Operating margin
25.3%
Net margin
22.4%
ROE
20.4%
ROA
12.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.07x
Current ratio
2.12x
Quick ratio
1.12x
Total debt
$164.67M
Total cash
$139.82M
Growth
How the business has been compounding
Revenue TTM
$2.31B
Revenue 5Y CAGR
3.0%
EPS TTM
3.10
EPS 5Y CAGR
5.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$659.77M
Free CF TTM
$637.92M
FCF margin
27.6%
Dividend
Shareholder payout
Yield
1.7%
Payout ratio
37.4%
Last ex-div date
2026-10-19