ESAB CORP (ESAB) Stock Fundamental Analysis
NYSE:ESAB - New York Stock Exchange, Inc. - US29605J1060 - Common Stock - Currency: USD
ESAB gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 128 industry peers in the Machinery industry. While ESAB has a great profitability rating, there are some minor concerns on its financial health. While showing a medium growth rate, ESAB is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
ESAB had positive earnings in the past year.
ESAB had a positive operating cash flow in the past year.
In the past 5 years ESAB has always been profitable.
In the past 5 years ESAB always reported a positive cash flow from operatings.
1.2 Ratios
ESAB has a Return On Assets of 6.42%. This is in the better half of the industry: ESAB outperforms 67.19% of its industry peers.
Looking at the Return On Equity, with a value of 14.17%, ESAB is in the better half of the industry, outperforming 70.31% of the companies in the same industry.
ESAB has a better Return On Invested Capital (9.66%) than 65.63% of its industry peers.
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 10.31%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.42% | ||
| ROE | 14.17% | ||
| ROIC | 9.66% |
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's Profit Margin of 9.92% is fine compared to the rest of the industry. ESAB outperforms 67.97% of its industry peers.
In the last couple of years the Profit Margin of ESAB has grown nicely.
With a decent Operating Margin value of 16.83%, ESAB is doing good in the industry, outperforming 79.69% of the companies in the same industry.
In the last couple of years the Operating Margin of ESAB has grown nicely.
Looking at the Gross Margin, with a value of 38.02%, ESAB is in the better half of the industry, outperforming 70.31% of the companies in the same industry.
ESAB's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.83% | ||
| PM (TTM) | 9.92% | ||
| GM | 38.02% |
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 below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for ESAB has been increased compared to 1 year ago.
ESAB has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.34 indicates that ESAB is not in any danger for bankruptcy at the moment.
ESAB's Altman-Z score of 3.34 is in line compared to the rest of the industry. ESAB outperforms 57.03% of its industry peers.
ESAB has a debt to FCF ratio of 3.64. This is a good value and a sign of high solvency as ESAB would need 3.64 years to pay back of all of its debts.
ESAB has a better Debt to FCF ratio (3.64) than 61.72% of its industry peers.
A Debt/Equity ratio of 0.55 indicates that ESAB is somewhat dependend on debt financing.
ESAB's Debt to Equity ratio of 0.55 is in line compared to the rest of the industry. ESAB outperforms 42.97% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 3.64 | ||
| Altman-Z | 3.34 |
ROIC/WACC0.98
WACC9.89%
2.3 Liquidity
ESAB has a Current Ratio of 1.91. 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 Current ratio (1.91) which is comparable to the rest of the industry.
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.
Looking at the Quick ratio, with a value of 1.24, ESAB is in line with its industry, outperforming 53.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.91 | ||
| Quick Ratio | 1.24 |
3. Growth
3.1 Past
ESAB shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.39%, which is quite good.
The Earnings Per Share has been growing by 8.40% on average over the past years. This is quite good.
Looking at the last year, ESAB shows a decrease in Revenue. The Revenue has decreased by -1.84% in the last year.
Measured over the past years, ESAB shows a small growth in Revenue. The Revenue has been growing by 4.05% on average per year.
EPS 1Y (TTM)10.39%
EPS 3Y3.21%
EPS 5Y8.4%
EPS Q2Q%4.17%
Revenue 1Y (TTM)-1.84%
Revenue growth 3Y4.12%
Revenue growth 5Y4.05%
Sales Q2Q%-1.68%
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 9.46% on average per year.
Based on estimates for the next years, ESAB will show a small growth in Revenue. The Revenue will grow by 2.91% on average per year.
EPS Next Y4.81%
EPS Next 2Y8.01%
EPS Next 3Y9.27%
EPS Next 5Y9.46%
Revenue Next Year1.8%
Revenue Next 2Y3.28%
Revenue Next 3Y3.7%
Revenue Next 5Y2.91%
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 stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 24.16, which indicates a rather expensive current valuation of ESAB.
Compared to the rest of the industry, the Price/Earnings ratio of ESAB is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 25.82, ESAB is valued at the same level.
The Price/Forward Earnings ratio is 20.91, which indicates a rather expensive current valuation of ESAB.
ESAB's Price/Forward Earnings ratio is in line with the industry average.
ESAB is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.16 | ||
| Fwd PE | 20.91 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ESAB.
ESAB's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.35 | ||
| EV/EBITDA | 15.65 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ESAB does not grow enough to justify the current Price/Earnings ratio.
ESAB has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)5.02
PEG (5Y)2.88
EPS Next 2Y8.01%
EPS Next 3Y9.27%
5. Dividend
5.1 Amount
ESAB has a yearly dividend return of 0.32%, which is pretty low.
ESAB's Dividend Yield is comparable with the industry average which is at 1.88.
Compared to an average S&P500 Dividend Yield of 2.39, ESAB's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.32% |
5.2 History
ESAB has been paying a dividend for less than 5 years, so it still needs to build a track record.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
ESAB pays out 6.73% of its income as dividend. This is a sustainable payout ratio.
DP6.73%
EPS Next 2Y8.01%
EPS Next 3Y9.27%
123.22
-1.69 (-1.35%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners96.05%
Inst Owner Change3.16%
Ins Owners6.32%
Ins Owner Change39.11%
Market Cap7.47B
Analysts82.5
Price Target138.49 (12.39%)
Short Float %1.87%
Short Ratio2.91
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.32% |
Yearly Dividend0.28
Dividend Growth(5Y)N/A
DP6.73%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.01%
Min EPS beat(2)2.31%
Max EPS beat(2)7.72%
EPS beat(4)4
Avg EPS beat(4)5.33%
Min EPS beat(4)2.1%
Max EPS beat(4)9.18%
EPS beat(8)8
Avg EPS beat(8)7.8%
EPS beat(12)12
Avg EPS beat(12)8.17%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)2.04%
Min Revenue beat(2)1.4%
Max Revenue beat(2)2.68%
Revenue beat(4)2
Avg Revenue beat(4)0.86%
Min Revenue beat(4)-0.51%
Max Revenue beat(4)2.68%
Revenue beat(8)6
Avg Revenue beat(8)2.73%
Revenue beat(12)10
Avg Revenue beat(12)3.74%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0.95%
PT rev (3m)-0.89%
EPS NQ rev (1m)-2.09%
EPS NQ rev (3m)-6.65%
EPS NY rev (1m)-0.17%
EPS NY rev (3m)-3.61%
Revenue NQ rev (1m)1.87%
Revenue NQ rev (3m)-2.49%
Revenue NY rev (1m)1.61%
Revenue NY rev (3m)-1.92%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.16 | ||
| Fwd PE | 20.91 | ||
| P/S | 2.74 | ||
| P/FCF | 25.35 | ||
| P/OCF | 21.57 | ||
| P/B | 3.91 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.65 |
EPS(TTM)5.1
EY4.14%
EPS(NY)5.89
Fwd EY4.78%
FCF(TTM)4.86
FCFY3.95%
OCF(TTM)5.71
OCFY4.64%
SpS45.02
BVpS31.5
TBVpS-4.59
PEG (NY)5.02
PEG (5Y)2.88
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.42% | ||
| ROE | 14.17% | ||
| ROCE | 12.96% | ||
| ROIC | 9.66% | ||
| ROICexc | 10.53% | ||
| ROICexgc | 32.12% | ||
| OM | 16.83% | ||
| PM (TTM) | 9.92% | ||
| GM | 38.02% | ||
| FCFM | 10.8% |
ROA(3y)5.92%
ROA(5y)5.84%
ROE(3y)14.67%
ROE(5y)11.97%
ROIC(3y)9.72%
ROIC(5y)8.68%
ROICexc(3y)10.17%
ROICexc(5y)8.99%
ROICexgc(3y)31.04%
ROICexgc(5y)29.46%
ROCE(3y)13.04%
ROCE(5y)11.64%
ROICexcg growth 3Y2.55%
ROICexcg growth 5YN/A
ROICexc growth 3Y8.34%
ROICexc growth 5YN/A
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%
F-Score7
Asset Turnover0.65
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 3.64 | ||
| Debt/EBITDA | 2 | ||
| Cap/Depr | 76.09% | ||
| Cap/Sales | 1.89% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 65.68% | ||
| Profit Quality | 108.89% | ||
| Current Ratio | 1.91 | ||
| Quick Ratio | 1.24 | ||
| Altman-Z | 3.34 |
F-Score7
WACC9.89%
ROIC/WACC0.98
Cap/Depr(3y)67.55%
Cap/Depr(5y)60.38%
Cap/Sales(3y)1.73%
Cap/Sales(5y)1.74%
Profit Quality(3y)110.75%
Profit Quality(5y)118.94%
High Growth Momentum
Growth
EPS 1Y (TTM)10.39%
EPS 3Y3.21%
EPS 5Y8.4%
EPS Q2Q%4.17%
EPS Next Y4.81%
EPS Next 2Y8.01%
EPS Next 3Y9.27%
EPS Next 5Y9.46%
Revenue 1Y (TTM)-1.84%
Revenue growth 3Y4.12%
Revenue growth 5Y4.05%
Sales Q2Q%-1.68%
Revenue Next Year1.8%
Revenue Next 2Y3.28%
Revenue Next 3Y3.7%
Revenue Next 5Y2.91%
EBIT growth 1Y4.26%
EBIT growth 3Y12.39%
EBIT growth 5Y10.82%
EBIT Next Year13.16%
EBIT Next 3Y10.63%
EBIT Next 5Y8.73%
FCF growth 1Y51.59%
FCF growth 3Y12.18%
FCF growth 5Y8.14%
OCF growth 1Y46.51%
OCF growth 3Y12.34%
OCF growth 5Y7.31%