ESAB CORP (ESAB) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ESAB - US29605J1060 - Common Stock
120.72 USD
-0.68 (-0.56%)
120.72 USD
0 (0%)
ESAB gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 132 industry peers in the Machinery industry. While ESAB is still in line with the averages on profitability rating, there are concerns on its financial health. ESAB is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year ESAB was profitable.
- ESAB had a positive operating cash flow in the past year.
- In the past 5 years ESAB has always been profitable.
- Each year in the past 5 years ESAB had a positive operating cash flow.
1.2 Ratios
- With a Return On Assets value of 4.94%, ESAB perfoms like the industry average, outperforming 59.09% of the companies in the same industry.
- ESAB's Return On Equity of 11.37% is fine compared to the rest of the industry. ESAB outperforms 67.42% of its industry peers.
- ESAB has a Return On Invested Capital (7.96%) which is comparable to the rest of the industry.
- ESAB had an Average Return On Invested Capital over the past 3 years of 9.72%. This is in line with the industry average of 10.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.94% | ||
| ROE | 11.37% | ||
| ROIC | 7.96% |
ROA(3y)5.92%
ROA(5y)5.84%
ROE(3y)14.67%
ROE(5y)11.97%
ROIC(3y)9.72%
ROIC(5y)8.68%
1.3 Margins
- ESAB has a Profit Margin of 8.61%. This is in the better half of the industry: ESAB outperforms 68.18% of its industry peers.
- In the last couple of years the Profit Margin of ESAB has grown nicely.
- ESAB's Operating Margin of 16.06% is fine compared to the rest of the industry. ESAB outperforms 75.76% of its industry peers.
- ESAB's Operating Margin has improved in the last couple of years.
- The Gross Margin of ESAB (37.56%) is better than 71.21% of its industry peers.
- In the last couple of years the Gross Margin of ESAB has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.06% | ||
| PM (TTM) | 8.61% | ||
| GM | 37.56% |
OM growth 3Y7.94%
OM growth 5Y6.5%
PM growth 3Y-0.24%
PM growth 5Y4.55%
GM growth 3Y3.13%
GM growth 5Y1.32%
2. Health
2.1 Basic Checks
- ESAB has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- The number of shares outstanding for ESAB has been increased compared to 1 year ago.
- Compared to 1 year ago, ESAB has a worse debt to assets ratio.
2.2 Solvency
- ESAB has an Altman-Z score of 2.87. This is not the best score and indicates that ESAB is in the grey zone with still only limited risk for bankruptcy at the moment.
- With a Altman-Z score value of 2.87, ESAB perfoms like the industry average, outperforming 46.21% of the companies in the same industry.
- The Debt to FCF ratio of ESAB is 5.64, which is a neutral value as it means it would take ESAB, 5.64 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 5.64, ESAB is in line with its industry, outperforming 50.76% of the companies in the same industry.
- ESAB has a Debt/Equity ratio of 0.63. This is a neutral value indicating ESAB is somewhat dependend on debt financing.
- ESAB has a Debt to Equity ratio (0.63) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.63 | ||
| Debt/FCF | 5.64 | ||
| Altman-Z | 2.87 |
ROIC/WACC0.83
WACC9.64%
2.3 Liquidity
- ESAB has a Current Ratio of 1.99. This is a normal value and indicates that ESAB is financially healthy and should not expect problems in meeting its short term obligations.
- ESAB's Current ratio of 1.99 is in line compared to the rest of the industry. ESAB outperforms 46.21% of its industry peers.
- ESAB has a Quick Ratio of 1.24. This is a normal value and indicates that ESAB is financially healthy and should not expect problems in meeting its short term obligations.
- ESAB has a Quick ratio of 1.24. This is comparable to the rest of the industry: ESAB outperforms 52.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.99 | ||
| Quick Ratio | 1.24 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 6.33% over the past year.
- Measured over the past years, ESAB shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.40% on average per year.
- ESAB shows a small growth in Revenue. In the last year, the Revenue has grown by 1.19%.
- The Revenue has been growing slightly by 4.05% on average over the past years.
EPS 1Y (TTM)6.33%
EPS 3Y3.21%
EPS 5Y8.4%
EPS Q2Q%5.6%
Revenue 1Y (TTM)1.19%
Revenue growth 3Y4.12%
Revenue growth 5Y4.05%
Sales Q2Q%14.51%
3.2 Future
- Based on estimates for the next years, ESAB will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.14% on average per year.
- Based on estimates for the next years, ESAB will show a small growth in Revenue. The Revenue will grow by 5.82% on average per year.
EPS Next Y6.79%
EPS Next 2Y9.81%
EPS Next 3Y10.61%
EPS Next 5Y11.14%
Revenue Next Year6.15%
Revenue Next 2Y7.26%
Revenue Next 3Y6.44%
Revenue Next 5Y5.82%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 23.17, which indicates a rather expensive current valuation of ESAB.
- Based on the Price/Earnings ratio, ESAB is valued a bit cheaper than 65.15% of the companies in the same industry.
- When comparing the Price/Earnings ratio of ESAB to the average of the S&P500 Index (27.21), we can say ESAB is valued inline with the index average.
- A Price/Forward Earnings ratio of 19.83 indicates a rather expensive valuation of ESAB.
- 61.36% of the companies in the same industry are more expensive than ESAB, based on the Price/Forward Earnings ratio.
- ESAB's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.17 | ||
| Fwd PE | 19.83 |
4.2 Price Multiples
- ESAB's Enterprise Value to EBITDA is on the same level as the industry average.
- ESAB's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.94 | ||
| EV/EBITDA | 16.19 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The decent profitability rating of ESAB may justify a higher PE ratio.
PEG (NY)3.41
PEG (5Y)2.76
EPS Next 2Y9.81%
EPS Next 3Y10.61%
5. Dividend
5.1 Amount
- ESAB has a yearly dividend return of 0.33%, which is pretty low.
- ESAB's Dividend Yield is comparable with the industry average which is at 0.98.
- With a Dividend Yield of 0.33, ESAB pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.33% |
5.2 History
- ESAB has paid a dividend for less than 5 years, so there is no long track record yet.
Dividend Growth(5Y)N/A
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
- 8.66% of the earnings are spent on dividend by ESAB. This is a low number and sustainable payout ratio.
DP8.66%
EPS Next 2Y9.81%
EPS Next 3Y10.61%
ESAB CORP / ESAB FAQ
What is the ChartMill fundamental rating of ESAB CORP (ESAB) stock?
ChartMill assigns a fundamental rating of 4 / 10 to ESAB.
Can you provide the valuation status for ESAB CORP?
ChartMill assigns a valuation rating of 3 / 10 to ESAB CORP (ESAB). This can be considered as Overvalued.
What is the profitability of ESAB stock?
ESAB CORP (ESAB) has a profitability rating of 6 / 10.
Can you provide the PE and PB ratios for ESAB stock?
The Price/Earnings (PE) ratio for ESAB CORP (ESAB) is 23.17 and the Price/Book (PB) ratio is 3.46.
What is the earnings growth outlook for ESAB CORP?
The Earnings per Share (EPS) of ESAB CORP (ESAB) is expected to grow by 6.79% in the next year.