One-glance verdict
Undervalued
$92.94 our estimate vs market $76.84
Wall Street consensus: $91.29 (-1.8% lower than our fair-value estimate)
17% below our estimate, below the bear case
Fundamentals snapshot
Graco Inc.
GGG · NYQ · Industrials · Specialty Industrial Machinery
Current price
$76.84
52-week range
$72.51 - $95.69
Market cap
$12.44B
Balance sheet
Healthy
211.11x Strong cushion
Net cash $455.36M. 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 1.4% last year.
- Reward Returns 21.2% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Insider ownership is only 0.8% (peer median: 1.2%).
What this company does
Graco Inc.
Graco makes specialized pumps and sprayers that handle everything from paint for houses to fluids used in factories and oil fields. By selling to many different industries, including construction, manufacturing, and technology, the company spreads its risk so it isn't overly dependent on the health of any single one. This diverse customer base helps provide more stable business performance over time.
How the company got here
Graco was started in 1926 by two brothers, Russell and Leil Gray, who invented an air-powered grease gun because the hand-powered ones were too hard to use in cold Minneapolis winters. The company grew by making equipment to move fluids, like paint pumps, especially after introducing the first airless paint sprayer in 1958. Over the years, it expanded from serving local garages to supplying major industries worldwide, eventually becoming a publicly traded company in 1969. Key moments include developing new spray technologies and expanding into international markets, which helped it become a leader in handling fluids and powders.
What it actually does
Graco makes the equipment that moves, measures, and sprays all sorts of fluids and powders. Think of the paint sprayers professional painters use to paint a house, the machines that put stripes on roads and parking lots, or even the pumps that dispense peanut butter into jars at a factory. The company's products are used in many industries you see every day, like construction, car manufacturing, and food production. Essentially, if a thick liquid or powder needs to be moved, mixed, or applied with precision, Graco likely makes a tool for the job.
Contractor
This is Graco's largest business segment, making up nearly half of its sales. It provides equipment for professionals in the building and maintenance trades. This includes the paint sprayers used by professional painters, machines for applying texture to walls, and line stripers for marking roads and athletic fields. The customers are contractors who rely on this equipment to be durable and efficient for their jobs.
Industrial
The Industrial segment provides equipment to factories and manufacturing plants and accounts for a little less than half of the company's revenue. These products are used on assembly lines to apply everything from paint on cars to the sealants that hold parts together. This division also makes systems for powder coating, which is a type of durable finish you might find on appliances, and pumps for moving chemicals or other fluids within a factory. Customers are manufacturers who need precise and reliable ways to apply materials as part of their production process.
Expansion Markets
This is a smaller but important part of Graco's business that focuses on newer and specialized areas. It includes pumps and valves for the oil and gas industry, equipment for monitoring and cleaning up the environment, and highly specialized pumps used in making semiconductors (the chips in our electronics). This segment represents Graco's effort to grow by entering new, specialized markets and acquiring companies with unique technologies.
What management is betting on now
Graco's leadership is focused on inventing new products and expanding its business around the world, especially in growing markets in Asia and Latin America. They are also making strategic acquisitions (buying other companies) to enter new markets and gain new technologies. The company is also investing in making its products more efficient and environmentally friendly to meet modern demands. A key part of their strategy is the "razor and blades" model, where the initial sale of equipment leads to ongoing revenue (money coming in) from high-margin (very profitable) replacement parts and accessories.
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 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
FY2026 Q2
$161.34M
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
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Sources
Revenue
$519.21M
Net income
$122.20M
Diluted EPS
0.71
Operating cash flow
$178.56M
Free cash flow
$159.22M
Fetching…
Sources
Is it cheap or expensive?
Fair value $92.94 vs current price $76.84
Wall Street consensus is the average analyst price target: $91.29 (-1.8% lower than our fair-value estimate).
Our most-likely fair value is $92.94 a share — about 20.9% above today's price of $76.84, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $455.4M - more cash than debt. Interest coverage 211.1x.
Net debt
$-455.36M
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 $52.21M 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 $1.89B Interest coverage 11.18x -95% vs GGG Carries about 18.9x less debt cushion than GGG.
Total debt $9.69B 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 1.4% last year.
-
Returns 21.2% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Insider ownership is only 0.8% (peer median: 1.2%).
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)
24.09x
Forward P/E
21.98x
P/B
4.93x
P/S
5.49x
EV/EBITDA
16.31x
PEG ratio
2.28x
Profitability
How much profit each dollar creates
Gross margin
52.6%
Operating margin
29.7%
Net margin
23.5%
ROE
21.2%
ROA
12.7%
Health
Liquidity and balance-sheet strength
Debt / equity
0.02x
Current ratio
2.99x
Quick ratio
2.03x
Total debt
$52.21M
Total cash
$507.58M
Growth
How the business has been compounding
Revenue TTM
$2.27B
Revenue 5Y CAGR
3.0%
EPS TTM
3.19
EPS 5Y CAGR
5.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$673.45M
Free CF TTM
$637.92M
FCF margin
28.1%
Dividend
Shareholder payout
Yield
1.5%
Payout ratio
35.9%
Last ex-div date
2026-10-19