XVARY Composite Score
52
/ 100
Below Average
Combines growth, value, risk, and momentum factors into a single institutional-grade score.
Start here if you're new
What it is
ESAB sells the machines, filler metal, and gas-control gear factories need to weld, cut, and keep production moving.
How it gets paid
Last year Esab made $2.8B in revenue. filler metals was the main engine at $1.20B, or 43% of sales.
Why it's growing
Revenue grew 3.7% last year. Gross margin at 37.3% matters because it shows ESAB is still pricing like a specialized manufacturer.
What just happened
Revenue hit $2.1B and EPS reached $3.07, but the most recent reported quarter also came in light versus expectations at $1.35 against $1.38.
At a Glance
B+ balance sheet — decent shape, but not bulletproof
21.1x trailing p/e — priced about right
0.4% dividend yield — cash in your pocket every quarter
11.5% return on capital — nothing to write home about
XVARY composite: 52/100 — below average
What They Do
ESAB sells the machines, filler metal, and gas-control gear factories need to weld, cut, and keep production moving.
Consumables are 67% of 2024 sales. Recurring revenue (customers reorder filler metal, tips, and nozzles again and again → sales come back without a new pitch → your revenue base gets stickier) is why this business holds a 21.5% operating margin. ESAB also gets 78% of sales outside the U.S., so you are not betting on one factory cycle in one country.
How They Make Money
$2.8B
annual revenue · their business grew +3.7% last year
filler metals
$1.20B
replacement parts
$0.68B
portable welding equipment
$0.50B
automated cutting systems
$0.30B
gas control equipment
$0.12B
The Products That Matter
Industrial welding systems
Welding & Cutting Equipment
$2.8B revenue base
it's the core $2.8B revenue engine, so your bet rises and falls with fabrication and industrial end-market demand.
core
Gas regulation hardware
Gas Control Equipment
inside the $2.8B business
segment detail is thin here, which tells you the real story: this line matters because it supports the same $2.8B installed industrial base.
supporting line
Heavy industrial welding
EWM Heavy Industrial
$325M deal · $140M added revenue
the €275M ($325M) acquisition adds about €120M ($140M) of annual revenue and gives ESAB more exposure to heavy industrial welding and automation.
integration bet
Key Numbers
67%
consumables mix
Most of ESAB's sales come from repeat-purchase parts, which makes revenue less one-and-done than a pure equipment maker.
21.5%
operating margin
Operating margin means profit after running the business but before interest and taxes, so what: ESAB has room for mistakes.
$1.3B
long-term debt
Debt is only 16% of capital today, but that cushion matters more with a $2 billion cash acquisition on deck.
11.5%
return on capital
Return on capital means profit earned on the money tied up in the business, so what: good, but not elite.
Financial Health
B+
Strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 50 / 100
- long-term debt $1.3B (16% of capital)
- net profit margin 14.0% — keeps 14 cents of every dollar in revenue
- return on equity 14% — $0.14 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total Return vs. Market
source: institutional data · return history unavailable
What Just Happened
missed estimates
Revenue hit $2.1B and EPS reached $3.07, but the most recent reported quarter also came in light versus expectations at $1.35 against $1.38.
EDGAR shows annual revenue of $2.8 billion, up 3.7%, with gross margin at 37.3%. The quarter's huge from a year ago jump reflects deal activity more than a sudden welding boom.
$2.1B
revenue
$3.07
eps
37.3%
gross margin
the number that mattered
Gross margin at 37.3% matters because it shows ESAB is still pricing like a specialized manufacturer, not a commodity tool seller.
-
Esab corp. has sealed the deal.indeed, in the september quarter, the maker of welding and gas control equipment completed its previously announced, 275million-euro ($325 miilion) acquisition of ewm gmbh. founded in 1957, germanybased ewm is now a leading manufacturer of heavy industrial welding equipment and advanced automation.
-
It adds about 120 million euros ($140 million) in annual revenues to esab’s top line.
-
The company’s legacy operations are performing a bit better these days.
-
To wit, excluding the contribution from both acquisitions and a russian division that management has long promised to wind down, the core business returned to growth on a currency-neutral basis in the third quarter, with sales rising 2%, versus a 1% decline in the june interim.
-
The long-term picture here still seems pretty good.
source: company earnings report, 2026
Get this snapshot in your inbox
This page, delivered free — plus weekly updates when the numbers change. Plain English, no spam.
Weekly updates
Earnings alerts
Plain English
No spam
What Could Go Wrong
The top threat is an industrial demand slowdown hitting welding-equipment orders before the EWM integration has time to pay off.
Med
Single-business end-market exposure
All $2.8B of revenue comes from welding, cutting, and gas-control equipment. If fabrication demand weakens, there is no separate software-like segment to cushion the blow.
Last year's revenue growth was only 3.7%. It does not take a deep slowdown to flatten that.
Med
EWM integration risk
ESAB paid €275M ($325M) for EWM to add about €120M ($140M) of annual revenue. If integration drags, you get the cost now and the benefit later.
That added revenue is meaningful, but it is not big enough to hide a stumble.
Med
Valuation leaves less room for error
The stock trades at 21.1x trailing earnings while return on capital sits at 11.5%. That is fine if execution keeps tightening. It gets awkward if growth stalls.
When the market pays up for competence, a small miss matters more.
with $1.3B of debt, 11.5% return on capital, and just 3.7% annual revenue growth, ESAB needs steady execution more than heroic assumptions.
Source: institutional data · regulatory filings · risk analysis
Pay Attention To
Earnings
Next quarterly print
Watch whether quarterly revenue can stay around the current $728M run rate while EPS builds on the latest $0.90 print.
Core demand
Organic growth staying positive
The key operating signal is simple: third-quarter currency-neutral core sales were up 2% after a 1% decline in the June interim. You want that direction to hold.
Integration
Ewm proving it was worth $325M
The deal adds about $140M of annual revenue. The question is whether that revenue shows up as better earnings quality, not just a bigger denominator.
Valuation
Multiple versus growth
$1.3B of debt is fine if return on capital starts moving above 11.5%. If it does not, the stock stops being a quiet compounder and starts being a debate.
Analyst Rankings
short-term outlook
average
momentum score 3. in human-speak, analysts see a normal industrial stock here, not a short-term standout.
risk profile
average
stability score 3 means the risk profile is middle-of-the-pack. not a bunker stock, not a wreck.
chart momentum
average
technical score 3 says the tape is acting like an industrial name. that is a clean read, not a thrilling one.
Source: institutional data
Institutional Activity
156 buyers vs. 195 sellers in 3q2025. total institutional holdings: 56.9M shares.
Source: institutional data
Price Targets
3-5 year target range
$89
$202
$115
Current price
$146
Target midpoint · +27% from current · 3-5yr high: $150 (+30% · 8% ann'l return)
Want the deeper analysis?
The full deep dive: DCF model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
See plans from $5/moThe Deep Dive