Esco Technologies (ESE) AI Stock Analysis

• Market Cap: $4.79B
• Dividend Yield: 0.17%
• Average Volume (3M): 182.39K
• Price to Earnings (P/E): 40.6
• Beta (1Y): 0.95
• Revenue Growth: 8.40%
• EPS Growth: 20.03%
• Country: US
• Employees: 3,242
• Sector: Technology
• Sector Strength: 77
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 1.35
• Shares Outstanding: 25,824,492
• 10 Day Avg. Volume: 225,359
• 30 Day Avg. Volume: 182,390
• PEG Ratio: 4.84
• Price to Book (P/B): 3.48
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 39.02
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $200.00
• Price Target Upside: 12.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Esco Technologies demonstrates strong financial performance with robust revenue growth and profitability, supported by strategic acquisitions and positive earnings guidance. While the technical analysis indicates potential short-term bearish trends and the valuation suggests possible overvaluation, the company's solid operational and strategic execution supports a strong overall score.

Positive Factors

Acquisition Impact

The successful acquisition of Maritime Solutions has increased the company's exposure to global Naval expansion and power transmission trends.

Guidance and Performance

ESE raised its FY25 EPS guidance expectations, driven by improved organic performance across the Aerospace & Defense, USG, and Test segments.

Segment Growth

Aerospace & Defense sales grew significantly, driven by strength in the Navy and commercial aerospace.

Negative Factors

Leverage Profile

While the acquisition of Maritime Solutions improved the company's leverage profile, it also brings additional financial obligations.

Market Concerns

Despite strong Navy sales, concerns about the Boeing strikes remain a potential risk factor.

Esco Technologies Business Overview & Revenue Model

Company Description

ESCO Technologies Inc. produces and supplies engineered products and systems for industrial and commercial markets worldwide. It operates through Aerospace & Defense, Utility Solutions Group, and RF Shielding and Test segments. The Aerospace & Defense segment designs and manufactures filtration products, including hydraulic filter elements and fluid control devices used in commercial aerospace applications; filter mechanisms used in micro-propulsion devices for satellites; and custom designed filters for manned aircraft and submarines. It also designs, develops, and manufactures elastomeric-based signature reduction solutions for U.S. naval vessels; and mission-critical bushings, pins, sleeves, and precision-tolerance machined components for landing gear, rotor heads, engine mounts, flight controls, and actuation systems for the aerospace and defense industries. The Utility Solutions Group segment provides diagnostic testing solutions that enable electric power grid operators to assess the integrity of high-voltage power delivery equipment; and decision support tools for the renewable energy industry, primarily wind and solar. The RF Shielding and Test segment designs and manufactures RF test and secure communication facilities, acoustic test enclosures, RF and magnetically shielded rooms, RF measurement systems, and broadcast and recording studios; and RF absorptive materials and filters, active compensation systems, antennas, antenna masts, turntables, electric and magnetic probes, RF test cells, proprietary measurement software, and other test accessories to perform various tests. It also provides services, such as calibration for antennas and field probes, chamber certification, field surveys, customer training, and various product tests. The company distributes its products through a network of distributors, sales representatives, direct sales teams, and in-house sales personnel. The company was incorporated in 1990 and is based in St. Louis, Missouri.

How the Company Makes Money

Esco Technologies makes money through the sale of its specialized products and solutions across its three main business segments. The Aerospace & Defense segment generates revenue by providing filtration and fluid control products for commercial aerospace and military applications. The Utility Solutions Group (USG) segment earns income by offering advanced metering infrastructure (AMI) and other communication systems to utilities, focusing on improving operational efficiency and resource management. The RF Shielding & Test segment contributes to revenue by supplying RF shielding and electromagnetic compatibility (EMC) test solutions to various industries. Esco Technologies' earnings are bolstered by strategic acquisitions, continuous innovation, and maintaining strong relationships with key clients and partners in their respective sectors.

Esco Technologies Financial Statement Overview

Summary

Esco Technologies demonstrates robust financial health with strong growth in revenue and profitability. The company maintains a solid balance sheet with low leverage and effective cost and cash flow management, positioning it well for future growth.

Income Statement

Esco Technologies has shown strong revenue growth with a 10.34% increase from the previous year. The gross profit margin is robust at 52.9%, indicating efficient cost management. The net profit margin has improved to 10.4%, reflecting enhanced profitability. Both EBIT and EBITDA margins are strong, at 26.9% and 15.7% respectively, highlighting effective operational performance.

Balance Sheet

The company's balance sheet reflects a solid equity position with an equity ratio of 70.8%. The debt-to-equity ratio is low at 0.10, suggesting low financial leverage and reduced risk of financial distress. Return on equity is a healthy 8.7%, demonstrating satisfactory returns for shareholders.

Cash Flow

Esco Technologies exhibits a strong cash flow position with a notable free cash flow growth rate of 20.76%. The operating cash flow to net income ratio is 1.39, pointing to efficient cash generation from operations. The free cash flow to net income ratio stands at 1.00, supporting a balanced cash flow profile.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
1.06B	1.03B	956.03M	857.50M	715.44M	732.91M
	Gross Profit
409.67M	404.02M	375.66M	332.05M	270.39M	275.50M
	EBIT
127.42M	147.20M	145.55M	111.29M	82.93M	87.07M
	EBITDA
211.38M	200.54M	178.24M	159.63M	124.97M	132.20M
	Net Income Common Stockholders
110.19M	101.88M	92.55M	82.32M	63.50M	25.46M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
71.28M	65.96M	41.87M	97.72M	56.23M	52.56M
	Total Assets
1.80B	1.84B	1.68B	1.65B	1.58B	1.37B
	Total Debt
148.40M	156.81M	138.55M	177.85M	182.03M	79.15M
	Net Debt
77.12M	90.85M	96.69M	80.13M	125.80M	26.59M
	Total Liabilities
558.13M	601.27M	552.07M	606.30M	557.65M	411.93M
	Stockholders Equity
1.24B	1.24B	1.13B	1.05B	1.02B	961.60M
Cash Flow		Free Cash Flow
110.30M	91.38M	42.12M	90.26M	87.65M	41.15M
	Operating Cash Flow
152.97M	127.54M	76.89M	135.28M	123.14M	82.28M
	Investing Cash Flow
-45.47M	-104.64M	-52.47M	-55.92M	-202.44M	140.95M
	Financing Cash Flow
-85.37M	-773.00K	-78.33M	-32.12M	81.47M	-236.22M

Esco Technologies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 178.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESE, the sentiment is Positive. The current price of 178.47 is above the 20-day moving average (MA) of 162.61, above the 50-day MA of 158.71, and above the 200-day MA of 139.68, indicating a bullish trend. The MACD of 6.68 indicates Negative momentum. The RSI at 64.94 is Neutral, neither overbought nor oversold. The STOCH value of 86.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ESE.

Esco Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SANM	78 Outperform	$4.46B	19.73	11.03%	―	-1.50%	1.84%
PLXS	75 Outperform	$3.61B	25.68	10.93%	―	-0.69%	42.26%
OSIS	75 Outperform	$3.87B	27.52	16.73%	―	14.93%	12.89%
ESE	74 Outperform	$4.79B	40.62	9.66%	0.17%	8.40%	20.03%
MKSI	72 Outperform	$6.26B	27.81	9.50%	0.94%	-1.14%	―
Sector *	60 Neutral	$11.60B	10.64	-6.04%	2.94%	7.87%	-11.74%
LFUS	60 Neutral	$5.44B	51.01	4.39%	1.25%	-3.43%	-50.48%

Esco Technologies Corporate Events

ESCO Technologies Reports Strong Q2 2025 Results

On May 7, 2025, ESCO Technologies announced its fiscal 2025 second-quarter results, reporting a 7% increase in sales to $266 million and a 33% rise in GAAP EPS to $1.20. The company also highlighted a 22% increase in orders, resulting in a record backlog of $932 million. The recent acquisition of SM&P, now ESCO Maritime Solutions, is expected to expand ESCO’s naval product offerings. The company raised its full-year guidance, anticipating continued growth driven by strong performance across its segments and the integration of Maritime.

Spark’s Take on ESE Stock

According to Spark, TipRanks’ AI Analyst, ESE is a Outperform.

Esco Technologies scores highly due to strong financial performance and strategic growth initiatives, highlighted by positive earnings guidance and recent acquisitions. While technical analysis and valuation present some concerns, the company’s solid operational and strategic execution supports a strong overall score.

To see Spark’s full report on ESE stock, click here.

ESCO Technologies Finalizes Major Acquisition for Navy Expansion

On April 25, 2025, ESCO Technologies completed the acquisition of Ultra PMES Limited, Measurement Systems, Inc., EMS Development Corporation, and DNE Technologies, Inc. from Ultra Electronics Holdings Limited for approximately $550 million in cash. This acquisition, which was finalized on April 28, 2025, includes the Signature Management & Power (SM&P) business, enhancing ESCO’s Navy businesses with increased content on US Navy submarine and surface ship programs and expansion into UK and AUKUS navy platforms. The acquisition supports ESCO’s long-term objective of expanding its leadership in high-growth markets, particularly benefiting from increasing global naval defense spending as the US and its allies upgrade their naval defense programs. The impact of this acquisition will be reflected in ESCO’s updated FY 2025 guidance, to be announced on May 7, 2025.

Spark’s Take on ESE Stock

According to Spark, TipRanks’ AI Analyst, ESE is a Outperform.

Esco Technologies has a strong financial standing with robust revenue and profitability growth, effective cost management, and low leverage, which are significant strengths. The recent earnings call and corporate events further support positive future performance with raised guidance and strategic expansions. However, the technical analysis indicates short-term bearish trends, and the high P/E ratio suggests potential overvaluation concerns. Overall, the company’s strong financial performance and positive strategic outlook outweigh the valuation and technical analysis concerns, resulting in a solid overall score.

To see Spark’s full report on ESE stock, click here.