ESAB (NYSE:ESAB) Posts Earnings Results

Key Points

• Revenue exceeded expectations: ESAB reported quarterly revenue of $807.6 million, up 12.9% year over year and well above the $749.1 million consensus estimate, although EPS of $1.33 missed expectations by $0.04 and declined from $1.36 a year earlier.
• 2026 guidance was raised: The company now expects adjusted EPS of $5.40–$5.50, core sales of approximately $3.0–$3.1 billion and adjusted EBITDA of $615–$625 million. The Eddyfi acquisition, which closed ahead of schedule, is expected to provide a significant growth and synergy opportunity.
• Margins remain under pressure: Adjusted EBITDA margin fell 90 basis points to 19.5% due to logistics and commodity inflation and commercial investments; management expects roughly $15 million of price-cost headwinds for the full year, while its EPS outlook remains below analyst consensus.

ESAB (NYSE:ESAB - Get Free Report) released its quarterly earnings results on Thursday. The company reported $1.33 EPS for the quarter, missing analysts' consensus estimates of $1.37 by ($0.04), Zacks reports. The company had revenue of $807.63 million for the quarter, compared to the consensus estimate of $749.05 million. ESAB had a return on equity of 14.48% and a net margin of 5.75%.The firm's quarterly revenue was up 12.9% compared to the same quarter last year. During the same quarter last year, the firm posted $1.36 earnings per share. ESAB updated its FY 2026 guidance to 5.400-5.500 EPS.

Here are the key takeaways from ESAB's conference call:

• Strong second-quarter performance: Sales rose 13% year over year to $766 million, including 2.5% organic growth, while Adjusted EBITDA increased 8% to a record $150 million. Both the Americas and EMEA/APAC segments returned to organic growth.
• Eddyfi acquisition closed ahead of schedule and is expected to add approximately nine percentage points of sales growth in 2026. Management highlighted Eddyfi’s roughly 65% gross margin, 30% EBITDA margin, and potential for workflow-related revenue synergies.
• ESAB raised its 2026 outlook to approximately $3.0 billion-$3.1 billion in core sales and $615 million-$625 million in Adjusted EBITDA, with adjusted EPS guided to $5.40-$5.50 and free-cash-flow conversion near 90%.
• Second-quarter Adjusted EBITDA margin declined 90 basis points to 19.5% due to logistics and commodity inflation, along with targeted commercial investments in equipment. Management expects about $15 million of price-cost headwinds for the full year, although it anticipates gradual improvement in pricing.
• Management expects organic growth to remain flat to slightly better sequentially in the second half, supported by equipment, automation, defense, and general fabrication, while consumables growth is expected to remain in the low single digits. Middle East operations, representing roughly 7%-8% of sales, were down double digits amid conflict-related disruption, though potential reconstruction demand could provide a future tailwind.

ESAB Price Performance

NYSE:ESAB traded down $2.27 during trading hours on Friday, reaching $92.24. 501,215 shares of the company's stock were exchanged, compared to its average volume of 601,778. The company has a market capitalization of $5.62 billion, a P/E ratio of 33.06, a price-to-earnings-growth ratio of 1.85 and a beta of 1.19. ESAB has a 12 month low of $82.18 and a 12 month high of $137.42. The company has a quick ratio of 2.26, a current ratio of 1.96 and a debt-to-equity ratio of 0.99. The business's 50-day simple moving average is $91.83 and its two-hundred day simple moving average is $102.27.

Institutional Investors Weigh In On ESAB

Hedge funds have recently modified their holdings of the stock. Price T Rowe Associates Inc. MD raised its position in ESAB by 11.7% during the fourth quarter. Price T Rowe Associates Inc. MD now owns 5,852,692 shares of the company's stock valued at $653,864,000 after buying an additional 613,327 shares during the period. Durable Capital Partners LP grew its stake in ESAB by 40.5% during the 3rd quarter. Durable Capital Partners LP now owns 1,945,854 shares of the company's stock valued at $217,430,000 after acquiring an additional 560,678 shares in the last quarter. Dimensional Fund Advisors LP increased its holdings in shares of ESAB by 3.1% in the 4th quarter. Dimensional Fund Advisors LP now owns 1,181,526 shares of the company's stock valued at $132,008,000 after purchasing an additional 35,782 shares during the period. Northern Trust Corp increased its holdings in shares of ESAB by 0.3% in the 3rd quarter. Northern Trust Corp now owns 518,241 shares of the company's stock valued at $57,908,000 after purchasing an additional 1,652 shares during the period. Finally, FIL Ltd increased its holdings in shares of ESAB by 2.9% in the 4th quarter. FIL Ltd now owns 494,727 shares of the company's stock valued at $55,271,000 after purchasing an additional 14,000 shares during the period. 91.13% of the stock is owned by hedge funds and other institutional investors.

ESAB News Summary

Here are the key news stories impacting ESAB this week:

• Positive Sentiment: Second-quarter revenue rose 12.9% year over year to $807.6 million, substantially exceeding analysts’ $749.1 million estimate. The company highlighted strength in its equipment business and continued operational improvements. ESAB Corporation Announces Second Quarter 2026 Results
• Positive Sentiment: ESAB said the Eddyfi acquisition is closing ahead of schedule, supporting its strategy to expand into inspection and testing markets. Management also forecast 2026 core sales of approximately $3.0 billion to $3.1 billion. ESAB forecasts 2026 core sales and adjusted EPS
• Neutral Sentiment: Management’s earnings call emphasized equipment-market momentum and Eddyfi integration as drivers of a strategic shift, but investors will likely look for evidence that the acquisition produces the expected growth and synergies. ESAB Q2 deep dive
• Negative Sentiment: Adjusted earnings were $1.33 per share, below the $1.37 consensus estimate and down from $1.36 a year earlier. ESAB Q2 Earnings Lag Estimates
• Negative Sentiment: ESAB’s 2026 adjusted EPS guidance of $5.40–$5.50 is below the approximately $5.77 analyst consensus, creating a concern that integration costs, business conditions, or other pressures could limit near-term earnings growth. ESAB Q2 2026 Earnings Call Transcript

Analysts Set New Price Targets

Several equities research analysts recently commented on ESAB shares. JPMorgan Chase & Co. dropped their target price on ESAB from $148.00 to $135.00 and set an "overweight" rating on the stock in a report on Friday, April 10th. Oppenheimer decreased their price target on ESAB from $140.00 to $135.00 and set an "outperform" rating for the company in a research note on Tuesday, July 21st. Stifel Nicolaus lowered their price target on ESAB from $141.00 to $137.00 and set a "buy" rating on the stock in a research report on Monday, July 20th. Roth Capital upped their price objective on ESAB from $142.00 to $151.00 and gave the company a "buy" rating in a report on Tuesday, July 7th. Finally, Weiss Ratings reaffirmed a "hold (c)" rating on shares of ESAB in a research note on Friday, July 24th. Eight investment analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company. Based on data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and an average target price of $138.38.

ESAB Company Profile

ESAB Corporation is a global leader in welding, cutting and gas control technologies, offering a comprehensive portfolio of equipment, consumables and automation solutions. The company's products include welding power sources, cutting machines, torches, electrodes, filler metals and gas regulating equipment designed to meet the needs of diverse industries. ESAB serves sectors such as construction, shipbuilding, automotive, energy, infrastructure and manufacturing, providing both standard and customized solutions to enhance productivity and quality in metal fabrication and processing.

Founded in 1904 by Swedish inventor Oscar Kjellberg, ESAB pioneered the development of coated welding electrodes, laying the groundwork for modern welding practices.

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