Esco Technologies (ET7) AI Stock Analysis

Esco Technologies

(Frankfurt:ET7)

Rating:―N/A

Action:N/A

Date:―

No summary available

Positive Factors

Backlog and demand visibilityA book-to-bill above one and record backlog provide meaningful forward revenue visibility across ESCO’s served markets. This supports production planning, capacity utilization, and sustained growth over coming quarters, while reducing reliance on immediate order activity.

Negative Factors

Acquisition-driven leverageThe Megger transaction materially changes ESCO’s balance-sheet risk by adding substantial secured debt, leverage covenants, and interest expense. Successful integration and cash generation will be important because financing obligations reduce flexibility if operating performance weakens.

Esco Technologies (ET7) vs. iShares MSCI Germany ETF (EWG)

Market Cap: EUR 6.16B
Dividend Yield: 0.13%
Average Volume (3M): 10
Price to Earnings (P/E): 19.6
Beta (1Y): 0.62
Revenue Growth: 8.81%
EPS Growth: 14.97%
Country: Germany
Employees: 3,392
Sector: Technology
Sector Strength: 61
Industry: Hardware, Equipment & Parts

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, and...

Esco Technologies Earnings Call Summary

Earnings Call Date:Aug 05, 2026(Q3-2026)|% Change Since:-25.51%|Next Earnings Date:Nov 18, 2026

Earnings Call SentimentPositive

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.

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 Risk Analysis

Esco Technologies disclosed 17 risk factors in its most recent earnings report. Esco Technologies reported the most risks in the "Production" category.

Production - Risks related to the company’s ability to manufacture goods and services

Latest Risks Added

0 New Risks

Esco Technologies Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

DE:ET7 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KEYS	80Outperform	$52.30B	42.31	20.11%	―	25.54%	131.92%
TDY	77Outperform	$30.30B	30.08	9.49%	―	8.43%	26.65%
ITRI	76Outperform	$4.20B	15.26	16.85%	―	-3.63%	10.84%
FTV	73Outperform	$19.42B	30.77	10.62%	0.47%	-22.06%	19.92%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
RAL	47Neutral	$7.44B	-6.15	-60.82%	0.30%	―	―

* Technology Sector Average

Performance Comparison

DE:ET7 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
DE:ET7	Esco Technologies	210.00	22.23	11.84%
ITRI	Itron Inc	95.82	-10.74	-10.08%
TDY	Teledyne	658.23	147.03	28.76%
KEYS	Keysight Technologies Inc	307.20	128.10	71.52%
FTV	Fortive	65.23	15.11	30.16%
RAL	Ralliant Corporation	67.21	24.19	56.23%

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.

Esco Technologies AI Stock Analysis