Start here if you're new
what it is
Donaldson makes filters and air-cleaning gear that keep machines, factories, and labs from choking on their own mess.
how it gets paid
Last year Donaldson made $3.7B in revenue. Mobile Solutions was the main engine at $2.3B, or 62% of sales.
why it's growing
Revenue grew 2.9% last year. In the industrial solutions segment, air filtration products sold to the power generation sector are expected to remain strong for the foreseeable future due to.
what just happened
Donaldson's latest quarter had a record sales print, but $0.83 EPS missed the $0.90 bar.
At a glance
A balance sheet — strong enough to weather a downturn
95/100 earnings predictability — you can trust these numbers
30.4x trailing p/e — you're paying up for this one
1.3% dividend yield — cash in your pocket every quarter
25.5% return on capital — every dollar works hard here
xvary composite: 81/100 — above average
What they do
Donaldson makes filters and air-cleaning gear that keep machines, factories, and labs from choking on their own mess.
You buy the filter once, then keep buying parts. That is boring, and it is the point. Mobile Solutions is 62% of FY'25 sales, so your replacement cycles and installed base do the heavy lifting.
How they make money
$3.7B
annual revenue · their business grew +2.9% last year
Mobile Solutions
$2.3B
Industrial Solutions
$1.1B
Life Sciences
$0.3B
The products that matter
filters for engines and equipment
Mobile Solutions
$2.3B · 62% of revenue
This is the core business at $2.3B, or 62% of sales. If you want the one number that explains Donaldson, start here.
62% of revenue
filters for factories and process lines
Industrial Solutions
$1.1B · 30% of revenue
At $1.1B, this segment gives you exposure beyond vehicles and heavy equipment. It matters because 30% is big enough to help the mix, but not big enough to rewrite it.
30% of revenue
filtration for life sciences customers
Life Sciences
$0.3B · 8% of revenue
At $0.3B, this is the smallest segment by far. You should treat it as useful diversification, not the engine of the story.
small but strategic
Key numbers
$98
18-mo target
That is only $5.41 above $92.59, so the upside is real but small.
22.0%
op margin
You keep $22 of every $100 of sales before interest and tax.
25.5%
return on capital
The business turns invested money into profit well, which helps justify a premium.
95
predictability
The earnings path is steadier than most industrial names, so the numbers are easier to trust.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 2 — safer than 80% of stocks
- price stability 95 / 100
- long-term debt $672M (6% of capital)
- net profit margin 14.4% — keeps 14 cents of every dollar in revenue
- return on equity 27% — $0.27 profit for every $1 investors have put in
A with balance sheet grade and risk rank standing out. your money faces less risk here than at most public companies.
Total return vs. market
You invested $10,000 in DCI 3 years ago → it's now worth $16,330.
The index would have given you $13,920.
source: institutional data · total return
What just happened
missed estimates
Donaldson's latest quarter had a record sales print, but $0.83 EPS missed the $0.90 bar.
VL said sales hit a quarterly record of $935M, up 4%, and adjusted EPS was $0.94, up 13%. Yahoo consensus showed $0.83 actual versus $0.90 expected, so the market focused on the miss.
$0.9B
revenue
$0.83
eps
34.3%
gross margin
the number that mattered
The $0.83 EPS print mattered most because it missed the $0.90 estimate by 7.8%, even with record sales.
-
donaldson is off to a good start in fiscal 2026 (year began august 1st).
-
sales at this global leader in filtration products reached a record level of $935 million, up 4% from the prior year.demand was strongest for products used in the mobile aftermarket, power generation, food and beverage, and disk drives.
-
operating margins widened due to higher volume and cost-optimization initiatives.
-
earnings per share rose 13% to $0.94, also a new quarterly high. (we have adopted adjusted earnings starting this fiscal year and will not be restating prior years.) the company has plenty of opportunities for continued growth.in the industrial solutions segment, air filtration products sold to the power generation sector are expected to remain strong for the foreseeable future due to demand from data centers and the ai infrastructure build out. the life sciences business has a strong position in the alternative protein category, which is benefiting from consumers who are adopting a vegan lifestyle.
-
donaldson makes filtration products that reduce contaminants in plant-based proteins.management is also focusing on gaining share in the independent distribution channel, where gains with suppliers, like napa auto parts, fueled nearly double-digit sales growth in the category in the latest quarter. meantime, the company is making good progress on mitigating the effects of higher tariffs through supply-chain optimization, production transfers, and selected price increases.
source: company earnings report, 2026
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What could go wrong
Donaldson's risk is not balance-sheet stress. It is paying 30.4x earnings for a business that just showed 3% revenue growth and a 1% EPS decline.
high
cost pressure is already showing up in the quarterly math
Latest quarterly revenue grew 3%, but EPS fell 1% to $0.78.
if that pattern sticks, the 30.4x multiple is the first thing investors question
med
Mobile Solutions still carries most of the company
Mobile Solutions contributes $2.3B, or 62% of total revenue.
a slowdown in trucks or heavy equipment would hit the majority of the income statement
med
valuation leaves less room for a normal industrial wobble
Revenue grew 2.9% last year, but the stock trades at 30.4x trailing earnings.
you are not paying a market multiple, so even modest disappointment can matter
med
Life Sciences helps the mix, but it cannot rescue a weak core
Life Sciences is $0.3B, or 8% of revenue.
the diversification story is real, but it is still too small to offset a Mobile slowdown
Between Mobile Solutions at 62% of sales and a 30.4x earnings multiple, DCI needs margin stability more than it needs heroic growth. If profits keep lagging revenue, both earnings and the valuation get less forgiving.
source: institutional data · regulatory filings · risk analysis
Pay attention to
key metric
does EPS recover faster than revenue grows
The latest quarter was 3% revenue growth and a 1% EPS decline. You want that relationship to flip, because premium multiples forgive slow growth more easily than falling earnings.
risk
gross margin holding above 34.1%
This is the cleanest stress test for the thesis. If margins slide while sales stay slow, the stock gets harder to defend.
earnings
the next update on the $4.00 EPS path
Full-year 2026 consensus sits at $4.00 per share. That makes each quarter a referendum on whether this year is back-end loaded or simply too optimistic.
trend
whether Mobile Solutions stays near 62% of revenue
If the mix gets even more dependent on the mobile business, the company looks more cyclical. If the mix broadens, the quality story gets stronger.
Analyst rankings
short-term outlook
top 20%
outlook rank 2 — analysts expect above-average price performance in the year ahead. in human-speak, they still like the stock.
risk profile
above average
risk rank 2 — safer than roughly 80% of stocks. You are not taking balance-sheet risk here.
chart momentum
top 20%
momentum rank 2 — the tape has been supportive, which helps explain why the stock sits near the top of its $57–$95 range.
earnings predictability
95 / 100
management usually delivers a narrow range of outcomes. That consistency is part of why investors tolerate the rich multiple.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 248 buyers vs. 238 sellers in 3q2025. total institutional holdings: 99.7M shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$78
$118
$93
current price
$98
target midpoint · +6% from current · 3-5yr high: $150 (+60% · 14% ann'l return)
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