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Esco Technologies
(NYSE:ESE)
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Rating:76Outperform
Price Target:
$305.00
▲(10.18% Upside)
Action:Reiterated
Date:10/03/26
Score is driven primarily by strong financial performance (profitability and conservative balance sheet) and an upbeat earnings outlook with raised guidance supported by record backlog and solid order momentum. Offsetting factors are weaker technical setup (below key moving averages with negative MACD) and added leverage/integration considerations following the Megger acquisition, while valuation is acceptable but not notably discounted and the dividend yield is minimal.
Positive Factors
Backlog and order momentum
A book-to-bill ratio above one and record backlog provide meaningful revenue visibility across ESCO’s served markets. This demand cushion supports production planning, future sales conversion, and sustained utilization over the next several quarters.
Negative Factors
Megger acquisition leverage
The Megger transaction materially changes ESCO’s balance-sheet risk by replacing low leverage with substantial secured borrowing. Higher interest costs, financial covenants, and integration demands could reduce flexibility and make execution more important over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Backlog and order momentum
A book-to-bill ratio above one and record backlog provide meaningful revenue visibility across ESCO’s served markets. This demand cushion supports production planning, future sales conversion, and sustained utilization 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.
Data provided by:
The Fly
The FlyEsco Technologies (ESE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.99B
Dividend Yield0.12%
Average Volume (3M)249.57K
Price to Earnings (P/E)21.2
Beta (1Y)0.71
Revenue Growth16.55%
EPS Growth23.43%
CountryUS
Employees3,392
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)12.14
Shares Outstanding31,007,566
10 Day Avg. Volume255,330
30 Day Avg. Volume249,570
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 Cap1.15
Enterprise Value/Revenue7.11
Enterprise Value/Gross Profit16.92
Enterprise Value/Ebitda30.00
Forecast
1Y Price Target
$416.50Price Target Upside50.46% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)9.32
Revenue Forecast (FY)$1.55B
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 makes money primarily by selling engineered products, components, and systems to OEMs, governments/defense customers, utilities, and industrial/laboratory customers, with revenue generally recognized at shipment/delivery (or over time for cer...
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 | 305.68M | 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
276.82
Price Trends
279.20
Negative
299.66
Negative
284.33
Negative
Market Momentum
-4.67
Negative
42.93
Neutral
23.30
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 276.82 is above the 20-day moving average (MA) of 264.16, below the 50-day MA of 279.20, and below the 200-day MA of 284.33, indicating a bearish trend. The MACD of -4.67 indicates Negative momentum. The RSI at 42.93 is Neutral, neither overbought nor oversold. The STOCH value of 23.30 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 | $3.75B | 14.08 | 16.52% | ― | -5.69% | 2.02% | |
77 Outperform | $28.45B | 29.55 | 9.13% | ― | 7.70% | 13.95% | |
76 Outperform | $7.99B | 21.24 | 19.97% | 0.12% | 16.55% | 23.43% | |
75 Outperform | $65.16B | 52.70 | 20.11% | ― | 25.54% | 131.92% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $17.29B | 33.29 | 8.52% | 0.54% | -29.80% | -23.46% | |
45 Neutral | $8.10B | -6.70 | -60.82% | 0.27% | ― | ― |
* Technology Sector Average
ESE
Esco Technologies
257.83
45.42
21.38%
ITRI
Itron
85.58
-42.70
-33.29%
TDY
Teledyne Technologies
613.66
45.84
8.07%
KEYS
Keysight Technologies
382.75
219.40
134.31%
FTV
Fortive
57.26
8.89
18.39%
RAL
Ralliant Corporation
73.20
31.52
75.61%
Esco Technologies Corporate Events
Business Operations and StrategyExecutive/Board ChangesM&A TransactionsPrivate Placements and Financing
Esco Technologies Closes Megger Acquisition and Governance Changes
Positive
Oct 2, 2026
On October 1, 2026, ESCO Technologies completed the previously announced acquisition of the entire share capital of U.K.-based Megger Group Limited from TBG AG for about $2.3 billion in cash and stock. The deal included a post-closing price adjust...
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...
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.