One-glance verdict
Within fair range
$24.43 our estimate vs market $26.25
Wall Street consensus: $33.25 (36.1% higher than our fair-value estimate)
7% above our estimate
Fundamentals snapshot
Gates Industrial Corporation Ltd.
GTES · NYQ · Industrials · Specialty Industrial Machinery
Current price
$26.25
52-week range
$20.88 - $30.34
Market cap
$6.65B
Balance sheet
Watch
4.19x Stretched
Net debt $1.54B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 1.8% last year.
- Reward Returns 10.4% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 8/10 years.
What this company does
Gates Industrial Corporation Ltd.
Gates Industrial Corporation makes and sells essential parts for machines that move power, like belts and hoses. Most of their money comes from selling these parts to businesses that make or fix vehicles and industrial equipment, which matters because these are the backbone of many industries.
How the company got here
Gates Industrial Corporation Ltd. has a long history, tracing its roots back to 1911 when it was founded. Over the decades, it evolved from its early beginnings into a global manufacturer of specialized industrial products. A key turning point was its transition from Gates Industrial Corporation plc to Gates Industrial Corporation Ltd. in July 2026, reflecting its ongoing corporate development. The company's journey has been marked by consistent innovation in power transmission and fluid power solutions, establishing its presence across diverse markets worldwide.
What it actually does
Gates Industrial Corporation Ltd. designs and manufactures essential components that help power and move machinery and vehicles. Think of the belts that keep your car's engine running smoothly or the hoses that carry fluids in heavy construction equipment. These engineered parts are critical for the reliable operation of a vast array of machines, from everyday appliances to complex industrial systems. The company's products are vital for ensuring that power is transmitted efficiently and fluids are managed effectively in countless applications.
Power Transmission
This segment focuses on products that transfer power from one part of a machine to another, much like the chain on a bicycle transfers your pedaling effort to the wheel. Gates offers a wide range of belts, including elastomer and synchronous belts, as well as metal components like tensioners and pulleys. These parts are crucial for stationary equipment in factories, engines in vehicles, and even personal mobility devices like motorcycles. This business line represents a significant portion of Gates' overall operations, serving both manufacturers building new equipment and the aftermarket for repairs.
Fluid Power
The Fluid Power segment deals with systems that use liquids or gases to transmit power, similar to how hydraulic brakes work on a car. Gates provides hydraulic hoses, tubing, couplings, and fittings that are essential for machinery requiring high-pressure fluid systems. These components are used in demanding environments, such as heavy-duty trucks, construction and agricultural equipment, and industrial applications like automated manufacturing and data centers. This part of the business is key to enabling the movement and control of powerful machinery across various industries.
What management is betting on now
Gates Industrial Corporation Ltd. is focused on leveraging its expertise in engineered power transmission and fluid power solutions to drive future growth. A key strategy involves continuing to innovate and develop advanced products that meet the evolving needs of its diverse customer base. The company aims to strengthen its position in both the original equipment manufacturer (OEM) market, where its parts are installed in new machinery, and the aftermarket, where they are used for maintenance and repairs. By focusing on these core areas, Gates seeks to maintain its competitive edge and expand its global reach.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$94.00M
FY2024 Q4
$167.60M
FY2025 Q1
$-10.20M
FY2025 Q2
$83.60M
FY2025 Q3
$80.50M
FY2025 Q4
$251.00M
FY2026 Q1
$13.50M
FY2026 Q2
$60.30M
Revenue
$941.60M
Net income
$170.90M
Diluted EPS
0.67
Operating cash flow
$78.60M
Free cash flow
$60.30M
Fetching…
Sources
Revenue
$851.10M
Net income
$59.70M
Diluted EPS
0.23
Operating cash flow
$30.20M
Free cash flow
$13.50M
Fetching…
Sources
Revenue
$856.20M
Net income
$51.30M
Diluted EPS
0.19
Operating cash flow
$269.80M
Free cash flow
$251.00M
Fetching…
Sources
Revenue
$855.70M
Net income
$81.60M
Diluted EPS
0.31
Operating cash flow
$98.00M
Free cash flow
$80.50M
Fetching…
Sources
Revenue
$883.70M
Net income
$56.50M
Diluted EPS
0.22
Operating cash flow
$103.00M
Free cash flow
$83.60M
Fetching…
Sources
Revenue
$847.60M
Net income
$62.00M
Diluted EPS
0.24
Operating cash flow
$7.30M
Free cash flow
$-10.20M
Fetching…
Sources
Revenue
$829.40M
Net income
$36.60M
Diluted EPS
0.15
Operating cash flow
$190.90M
Free cash flow
$167.60M
Fetching…
Sources
Revenue
$830.70M
Net income
$47.60M
Diluted EPS
0.18
Operating cash flow
$115.90M
Free cash flow
$94.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $24.43 vs current price $26.25
Wall Street consensus is the average analyst price target: $33.25 (36.1% higher than our fair-value estimate).
Our most-likely fair value is $24.43 a share — about 6.9% away from today's price of $26.25, so the stock currently looks fairly priced.
Is it drowning in debt?
Watch
Net debt $1.5B. Interest coverage 4.2x.
Net debt
$1.54B
Interest coverage
4.19x
Gates Industrial Corporation Ltd.'s profit covers its interest bill about 4.2 times over.
Watch
Worse cushion
Baseline
Better cushion
GTES
BASELINE
Gates Industrial Corporation Ltd.
Total debt $2.36B Interest coverage 4.19x This is the baseline the peer rows are being compared against.
Total debt $2.20B Interest coverage 5.13x +22% vs GTES Carries about 1.2x more debt cushion than GTES.
Total debt $4.77B Interest coverage 1.96x -53% vs GTES Carries about 2.1x less debt cushion than GTES.
Total debt $2.32B Interest coverage 6.68x +59% vs GTES Carries about 1.6x more debt cushion than GTES.
Total debt $4.06B Interest coverage 13.36x +219% vs GTES Carries about 3.2x more debt cushion than GTES.
Total debt $1.75B Interest coverage 11.18x +167% vs GTES Carries about 2.7x more debt cushion than GTES.
What you should know
The case for and against GTES
3 Rewards
0 Risks
Rewards
-
Revenue grew 1.8% last year.
-
Returns 10.4% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 8/10 years.
Risks
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)
18.36x
Forward P/E
13.69x
P/B
1.89x
P/S
1.90x
EV/EBITDA
11.56x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
40.5%
Operating margin
15.3%
Net margin
10.4%
ROE
10.4%
ROA
4.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.61x
Current ratio
3.24x
Quick ratio
2.12x
Total debt
$2.36B
Total cash
$826.50M
Growth
How the business has been compounding
Revenue TTM
$3.50B
Revenue 5Y CAGR
-0.2%
EPS TTM
1.43
EPS 5Y CAGR
7.6%
Cash flow
How much cash the business throws off
Operating CF TTM
$476.60M
Free CF TTM
$404.90M
FCF margin
11.6%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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