ESAB Corporation Fundamental Analysis (NYSE: ESAB)
ESAB Corporation (NYSE: ESAB) shows weak financial fundamentals with a PE ratio of 28.80, profit margin of 5.75%, and ROE of 7.66%. The company generates $3.0B in annual revenue with moderate year-over-year growth of 3.71%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 40.8/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ESAB's fundamental strength across five key dimensions:
Efficiency Score
WeakESAB struggles to generate sufficient returns from assets.
Valuation Score
ModerateESAB shows balanced valuation metrics.
Growth Score
WeakESAB faces weak or negative growth trends.
Financial Health Score
ExcellentESAB maintains a strong and stable balance sheet.
Profitability Score
WeakESAB struggles to sustain strong margins.
Key Financial Metrics
Is ESAB Expensive or Cheap?
P/E Ratio
ESAB trades at 28.80 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, ESAB's PEG of -0.82 indicates potential undervaluation.
Price to Book
The market values ESAB Corporation at 1.90 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 5.82 times EBITDA. This is generally considered low.
How Well Does ESAB Make Money?
Net Profit Margin
For every $100 in sales, ESAB Corporation keeps $5.75 as profit after all expenses.
Operating Margin
Core operations generate 15.06 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $7.66 in profit for every $100 of shareholder equity.
ROA
ESAB Corporation generates $2.63 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
ESAB Corporation generates limited operating cash flow of $256.96M, signaling weaker underlying cash strength.
Free Cash Flow
ESAB Corporation produces free cash flow of $195.16M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $3.21 in free cash annually.
FCF Yield
ESAB converts 4.09% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
28.80
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.82
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.90
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.59
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.95
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.96
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.08
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.08
vs 25 benchmark
How ESAB Stacks Against Its Sector Peers
| Metric | ESAB Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 28.80 | 30.00 | Neutral |
| ROE | 7.66% | 1114.00% | Weak |
| Net Margin | 5.75% | -25183.00% (disorted) | Weak |
| Debt/Equity | 0.95 | 0.94 | Neutral |
| Current Ratio | 1.96 | 21.63 | Neutral |
| ROA | 2.63% | -1320911.00% (disorted) | Weak |
ESAB outperforms its industry in 0 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews ESAB Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
43.60%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
41.91%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
-16.98%
Industry Style: Cyclical, Value, Infrastructure
Declining