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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#1424
Positioning
Market Dominance
Manufacturing
Machinery
$7.1B
Shyam P. Kambeyanda
ESAB Corporation formulates, develops, manufactures, and supplies consumable products and equipment for use in cutting, joining, and automated welding, as well as gas control equipment. The company sells its products under the ESAB brand to various end markets, including general industry, construction, infrastructure, transportation, energy, renewable energy, and medical and life sciences.
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Dates updated upon official exchange announcement.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = ESAB ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$UL UNILEVER PLC | 78 | 96 | 98 | 59 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$ASML ASML HOLDING NV | 77 | 89 | 86 | 83 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$ESLT ELBIT SYSTEMS LTD | 76 | 81 | 87 | 85 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$MT ArcelorMittal | 75 | 71 | 98 | 85 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$AMAT APPLIED MATERIALS INC /DE | 75 | 85 | 87 | 84 | 20.9x | 13.6x | 32.9% | 20.5% | 48.8% | 30.6% | 24.4% | 7.7% | 0.9% | 32.0x | $148.6B | VS | |
$SIMO Silicon Motion Technology CORP | 75 | 84 | 86 | 85 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$CODA Coda Octopus Group, Inc. | 74 | 83 | 90 | 79 | 16.3x | 11.9x | 7.4% | 7.5% | 68.3% | 19.5% | 18.2% | 29.0% | 0.0% | 0.0x | $84M | VS | |
$GSK GSK plc | 74 | 84 | 90 | 70 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$EFXT Enerflex Ltd. | 74 | 80 | 91 | 83 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$BUD Anheuser-Busch InBev SA/NV | 74 | 84 | 97 | 63 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$ESAB ESAB Corp | 54 | 56 | 60 | 48 | 30.2x | 15.7x | 11.9% | 5.5% | 37.4% | 15.5% | 9.5% | 2.9% | 0.3% | 116.0x | $7.1B | ||
| SECTOR BENCH | - | - | - | - | - | 22.3x | 11.5x | -1.9% | 0.9% | 44.1% | 2.5% | 1.0% | 6.7% | 0.0% | 0.2x | - | REF |
ESAB Corp (ESAB) receives a "Hold" rating with a composite score of 53.8/100. It ranks #1424 out of 7,333 stocks in our coverage universe and carries a 3-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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In-line with peers — no strong momentum signal
Fair valuation relative to peers
Average quality profile
Low volatility — smoother ride and historically better risk-adjusted returns
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Manufacturing sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for ESAB.
View All Ratings| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 56 | 54 | +2NEUTRAL |
| MOMENTUM | 48 | 41 | +7ALPHA |
| VALUATION | 60 | 51 | +9ALPHA |
| INVESTMENT | 29 | 36 | -7DRAG |
| STABILITY | 73 | 75 | -2NEUTRAL |
| SHORT INT | 45 | 42 | +3NEUTRAL |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC 30.3% vs WACC 8.6% (spread +21.7%)
GM 37% vs sector 44%, OM 15% vs sector 3%
Capital turnover 2.54x, R&D intensity 1.5%
Rev growth 3%, 4yr history
Interest coverage 17.5x, Net debt/EBITDA 2.3x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
We rate ESAB Corp (ESAB) as a Hold with a composite score of 53.8/100 at a current price of $125.12. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling.
ESAB Corp holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 53.8/100 places it at rank #1424 in our full universe.
Narrow
Medium
Poor
Fair Value
Stable competitive position in a defensive sector.
Leverage of 116% D/E amplifies downside risk.
Vulnerability to macroeconomic shocks and interest rate volatility.
ESAB Corp represents a hold based on multi-factor quantitative performance.
Our model assigns ESAB Corp a Hold rating, with a composite score of 53.8/100 and 3 out of 5 stars. Ranked #1424 of 7,333 stocks, ESAB presents a mixed quantitative picture — neither compelling enough to initiate new positions nor weak enough to warrant selling. Investors already holding may consider maintaining their position while monitoring for changes in the factor profile.
With a quality score of 56/100, ESAB shows adequate but unremarkable business quality. The company reports a return on equity of 11.9% (sector avg: -1.9%), gross margins of 37.4% (sector avg: 44.1%), net margins of 9.5% (sector avg: 1.0%). This suggests the company generates acceptable returns but may lack the competitive positioning or operational efficiency to stand out from peers.
ESAB's value score of 60/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include a P/E ratio of 30.16x, an EV/EBITDA of 15.71x, a P/B ratio of 3.60x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
ESAB Corp's investment score of 29/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 2.9% vs. a sector average of 6.7% and a return on assets of 5.5% (sector: 0.9%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
ESAB is currently showing below-average momentum at 48/100, which may indicate weakening institutional interest or negative sentiment shifts. Revenue growth stands at 2.9% year-over-year, while a beta of 1.04 reflects its sensitivity to broader market moves. Investors should note that declining momentum can precede further price weakness, though contrarian opportunities sometimes emerge at these levels.
ESAB shows good financial stability with a score of 73/100. Key stability metrics include a beta of 1.04 and a debt-to-equity ratio of 116.00x (sector avg: 0.2x). This suggests manageable leverage and moderate price volatility, making it appropriate for investors seeking a balance between growth potential and capital preservation.
The short interest score of 45/100 for ESAB suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include elevated leverage (D/E: 116.00x). With a $7.1B market cap (mid-cap), ESAB Corp may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
ESAB offers a modest dividend yield of 0.3%. While the income contribution is relatively small, even a small dividend signals management's commitment to shareholder returns and can serve as a signal of financial discipline.
ESAB Corp is a mid-cap company in the Manufacturing sector, ranked #0 of 50 in its sector (100th percentile) and #1424 of 7,333 overall (81st percentile). Key comparisons include ROE of 11.9% exceeding the -1.9% sector median and operating margins of 15.5% above the 2.5% sector average. This top-quartile standing reflects exceptional competitive strength relative to Manufacturing peers.
While ESAB currently exhibits a HOLD profile, superior opportunities exist within the MANUFACTURING sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Manufacturing Alpha →Quant Factor Profile
Key factor gap
Stability (73) vs Investment (29) — closing this gap could shift the rating.
EV/EBITDA 37% ABOVE SECTOR MEDIAN
ROE 729% BELOW SECTOR MEDIAN
Gross Margin 15% BELOW SECTOR MEDIAN
Above 50MA
37.18%
Net New Highs
+51081
ESAB reported Q2 2025 revenue of $715.6 million, exceeding analyst estimates. The company saw strong performance in EMEA and Asia-Pacific regions, while experiencing volume declines in the Americas. Management raised full-year guidance and continues to focus on strategic acquisitions and gas control segment growth.
ESAB Corporation announced the acquisition of Canada-based Eddyfi Technologies for $1.45 billion to expand its total addressable market by approximately $5 billion. The deal, expected to close mid-2026, will create a comprehensive workflow solution spanning fabrication, inspection and monitoring. Eddyfi is projected to generate $270 million in revenue and $80 million in adjusted EBITDA in 2026, with $20 million in anticipated synergies. However, ESAB shares declined 7.84% following the announcement, and FY26 EPS guidance came in below consensus expectations.
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