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Esco Technologies
(NYSE:ESE)
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Rating:78Outperform
Price Target:
$374.00
▲(14.10% Upside)
Action:Reiterated
Date:08/07/26
ESE scores well overall primarily due to strong financial performance (high profitability and a very low-leverage balance sheet) and a supportive earnings update with raised FY2026 guidance, record backlog, and strong book-to-bill. The score is tempered by mixed near-term technical momentum, a relatively full P/E with minimal dividend support, and watch-items around cash conversion and some segment/renewables and acquisition-related variability.
Positive Factors
Conservative Balance Sheet
Esco's very low debt-to-equity (~0.07) and steadily growing equity position materially improve financial flexibility. This conservative capital structure reduces interest exposure, supports funding for M&A or working capital needs, and increases resilience versus cyclical downturns over the next several quarters.
Negative Factors
Weaker Cash Conversion
Operating cash flow materially trails net income (≈55%), driven by working-capital and timing effects. Uneven cash conversion limits immediate liquidity despite strong FCF growth; if order timing shifts or acquisition-related outflows spike, free cash availability and covenant headroom could tighten.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative Balance Sheet
Esco's very low debt-to-equity (~0.07) and steadily growing equity position materially improve financial flexibility. This conservative capital structure reduces interest exposure, supports funding for M&A or working capital needs, and increases resilience versus cyclical downturns over the next several quarters.
Read all positive factors
Esco Technologies Key Performance Indicators (KPIs)
Any
Revenue by Geography
Shows where revenue is coming from around the world, revealing exposure to fast-growing markets, currency swings, and geopolitical or supply-chain risks. Helps investors assess which regions are driving growth and where regional downturns could dent overall results.
Shows where revenue is coming from around the world, revealing exposure to fast-growing markets, currency swings, and geopolitical or supply-chain risks. Helps investors assess which regions are driving growth and where regional downturns could dent overall results.
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The Fly
The FlyEsco Technologies (ESE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.94B
Dividend Yield0.11%
Average Volume (3M)257.82K
Price to Earnings (P/E)24.0
Beta (1Y)0.73
Revenue Growth16.55%
EPS Growth23.43%
CountryUS
Employees3,392
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)12.14
Shares Outstanding25,907,566
10 Day Avg. Volume182,618
30 Day Avg. Volume257,816
Financial Highlights & Ratios
PEG Ratio0.10
Price to Book (P/B)3.55
Price to Sales (P/S)4.99
P/FCF Ratio28.82
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$416.50Price Target Upside27.07% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)8.19
Revenue Forecast (FY)$1.32B
Esco Technologies Business Overview & Revenue Model
Company Description
ESCO Technologies Inc. serves global industrial and commercial markets by offering specialized engineered products and sophisticated systems. The company operates through three primary business units: Aerospace & Defense, Utility Solutions Group, ...
How the Company Makes Money
ESCO Technologies makes money primarily by selling engineered products and systems (and associated services) through its operating segments/business units. Revenue is generated from: (1) Product and system sales to industrial and infrastructure cu...
Esco Technologies Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Nov 12, 2026
Earnings Call Sentiment Positive
The call highlighted multiple strong operating and financial metrics — record backlog ($1.54B), robust book-to-bill (1.21), double-digit segment order growth (Test +42%, Doble +30%), margin expansion, large EPS upside (Q3 EPS +37.5%, FY26 guide +38–39%), and materially improved operating cash flow (~$193M YTD). Challenges center on renewables weakness at NRG that pressured Utility margins, comparability impacts from prior-year Maritime backlog ($364M) that yielded negative quarter-over-quarter order growth, and integration/financing risks tied to the pending Megger acquisition. Overall, the positive operational momentum, raised guidance, and cash generation outweigh the cited headwinds, though some near-term lumpiness and integration/timing risks remain.Positive Updates
Record Backlog and Strong Order Momentum
Consolidated book-to-bill of 1.21 (121%) in Q3 drove a record consolidated backlog of $1.54 billion, with Aerospace & Defense backlog of $1.1 billion, indicating robust demand across served end markets.
Negative Updates
Quarterly Order Growth Distorted by Prior-Year Acquisition
Reported order growth for the quarter was negative primarily due to the $364 million of acquired backlog from last year's Maritime acquisition, complicating year-over-year comparisons.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Backlog and Strong Order Momentum
Consolidated book-to-bill of 1.21 (121%) in Q3 drove a record consolidated backlog of $1.54 billion, with Aerospace & Defense backlog of $1.1 billion, indicating robust demand across served end markets.
Read all positive updates
Company Guidance
ESCO raised its fiscal 2026 outlook to adjusted EPS of $8.30–$8.40 (up ~38%–39% vs. FY2025) and called 2026 a record year; management also provided segment revenue ranges of Aerospace & Defense (ex‑Maritime) +8%–10%, Test +10%–12%, Utility +4%–6% with Doble in the low double‑digits. They reiterated plans to close the Megger acquisition in Q1 FY2027 and to fold Megger into the November FY2027 guide if timing holds, expect acquisition debt at roughly a 6% cost (with a contingent hedge slightly below 6%), and pointed to strong underlying metrics supporting the guide: Q3 book‑to‑bill 1.21, record backlog $1.54B, YTD organic order growth 19% and organic sales +11%, operating cash flow ≈$193M YTD, EBITDA leverage ~0.2x, and a target free‑cash‑flow conversion of about 100% of adjusted net earnings.Esco Technologies Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
78
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.29B | 1.10B | 919.13M | 855.79M | 857.50M | 715.44M |
| Gross Profit | 542.19M | 461.08M | 388.57M | 353.11M | 332.05M | 270.39M |
| EBITDA | 278.93M | 245.38M | 198.35M | 166.85M | 159.63M | 124.97M |
| Net Income | 314.81M | 299.22M | 101.88M | 92.55M | 82.32M | 63.50M |
Balance Sheet | ||||||
| Total Assets | 2.42B | 2.41B | 1.84B | 1.68B | 1.65B | 1.58B |
| Cash, Cash Equivalents and Short-Term Investments | 73.24M | 101.35M | 65.96M | 41.87M | 97.72M | 56.23M |
| Total Debt | 129.11M | 230.40M | 156.81M | 138.55M | 177.85M | 182.03M |
| Total Liabilities | 802.74M | 869.52M | 601.27M | 552.07M | 606.30M | 557.65M |
| Stockholders Equity | 1.62B | 1.54B | 1.24B | 1.13B | 1.05B | 1.02B |
Cash Flow | ||||||
| Free Cash Flow | 196.60M | 189.77M | 87.36M | 46.96M | 90.26M | 87.65M |
| Operating Cash Flow | 243.97M | 241.94M | 127.54M | 76.89M | 135.28M | 123.14M |
| Investing Cash Flow | 213.28M | -255.79M | -104.64M | -52.47M | -55.92M | -202.44M |
| Financing Cash Flow | -460.21M | 49.54M | -773.00K | -78.33M | -32.12M | 81.47M |
Esco Technologies Technical Analysis
Negative
327.78
Price Trends
323.62
Negative
313.98
Negative
273.52
Positive
Market Momentum
-6.53
Positive
36.28
Neutral
22.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESE, the sentiment is Negative. The current price of 327.78 is above the 20-day moving average (MA) of 312.01, above the 50-day MA of 323.62, and above the 200-day MA of 273.52, indicating a neutral trend. The MACD of -6.53 indicates Positive momentum. The RSI at 36.28 is Neutral, neither overbought nor oversold. The STOCH value of 22.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ESE.
Esco Technologies Risk Analysis
Esco Technologies disclosed 17 risk factors in its most recent earnings report. Esco Technologies reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Esco Technologies Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $4.21B | 16.26 | 16.52% | ― | -5.69% | 2.02% | |
78 Outperform | $7.94B | 23.95 | 19.97% | 0.10% | 16.55% | 23.43% | |
72 Outperform | $3.65B | 30.52 | 18.03% | 1.27% | 0.80% | -7.04% | |
70 Outperform | $4.33B | 13.57 | 28.25% | 0.32% | 0.88% | -8.19% | |
64 Neutral | $6.27B | 67.89 | 3.18% | 1.05% | 0.32% | -18.53% | |
62 Neutral | $3.61B | 24.55 | 16.74% | ― | 6.98% | 8.41% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
ESE
Esco Technologies
284.57
94.27
49.54%
BMI
Badger Meter
128.13
-53.41
-29.42%
ITRI
Itron
98.43
-24.98
-20.24%
OSIS
OSI Systems
218.09
0.20
0.09%
ST
Sensata
41.93
11.13
36.12%
VNT
Vontier
32.81
-9.35
-22.18%
Esco Technologies Corporate Events
Business Operations and StrategyDividendsFinancial DisclosuresM&A Transactions
Esco Technologies posts strong Q3 results, lifts guidance
Positive
Aug 6, 2026
On August 6, 2026, ESCO Technologies reported strong fiscal 2026 third-quarter results for the period ended June 30, with sales up 14 percent year on year to $339 million and GAAP EPS from continuing operations rising 31 percent to $1.26. Adjusted...
Business Operations and StrategyPrivate Placements and Financing
Esco Technologies Secures New Senior Credit Facilities
Positive
Jun 3, 2026
On May 29, 2026, Esco Technologies and certain subsidiaries agreed a new senior secured credit package with a bank group led by JPMorgan Chase that will replace its existing 2023 facility upon completion of a pending acquisition. The structure inc...
Business Operations and StrategyDividendsFinancial DisclosuresM&A Transactions
Esco Technologies Reports Strong Q2 Results, Raises EPS Outlook
Positive
May 7, 2026
For the quarter ended March 31, 2026, Esco Technologies reported a 33% year-on-year jump in sales to $309 million and a 26% rise in GAAP EPS from continuing operations to $1.29, with adjusted EPS up 63% to $1.91. Orders surged 42% to $378 million,...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.