Esab Corp

ESAB

General Industrial Machinery & Equipment, NEC

Mkt Cap

$6.03B

PE

25.84

Debt

$993.3M

Cash

$76.5M

EV

$6.946B

FCF

$289M

Market Cap

$6.03B

P/E Ratio

25.84

Debt

$993.3M

Cash

$76.5M

EV

$6.946B

FCF

$289M

Charts data: {"Earnings":[{"time":"2020-12-30","value":157414000},{"time":"2021-12-30","value":235110000},{"time":"2022-12-30","value":223747000},{"time":"2023-12-30","value":205285000}],"Sales":[{"time":"2020-12-30","value":1950069000},{"time":"2021-12-30","value":2428115000},{"time":"2022-12-30","value":2593480000},{"time":"2023-12-30","value":2774766000}],"Net Margins":[{"time":"2020-12-30","value":0.08072227187858481},{"time":"2021-12-30","value":0.09682819800544867},{"time":"2022-12-30","value":0.08627288430988479},{"time":"2023-12-30","value":0.07398281512747382}],"Assets":[{"time":"2021-12-30","value":3461262000},{"time":"2022-12-30","value":3754015000},{"time":"2023-12-30","value":3828629000}],"Stockholders Equity":[{"time":"2020-12-30","value":2544767000},{"time":"2021-12-30","value":2921623000},{"time":"2022-12-30","value":1388458000},{"time":"2023-12-30","value":1647657000}],"ROE":[{"time":"2020-12-30","value":0.061857922552438},{"time":"2021-12-30","value":0.08047239496677018},{"time":"2022-12-30","value":0.16114783450417658},{"time":"2023-12-30","value":0.12459207225775754}],"ROA":[{"time":"2021-12-30","value":0.09218834055324329},{"time":"2022-12-30","value":0.08765681543627289},{"time":"2023-12-30","value":0.10556415886731256}]}

ESAB Corporation engages in the formulation, development, manufacture, and supply of consumable products and equipment for use in cutting, joining, and automated welding; and control equipment. Its comprehensive range of welding consumables includes electrodes, cored and solid wires, and fluxes using a range of specialty and other materials; and cutting consumables comprising electrodes, nozzles, shields, and tips. The company's equipment ranges from portable welding machines to large customized automated cutting and welding systems. It also offers a range of software and digital solutions to help its customers increase their productivity, remotely monitor their welding operations, and digitize their documentation. The company sells its products under the ESAB brand to various end markets, such as general industry, infrastructure, renewable energy, medical and life sciences, transportation, construction, and energy. It offers its products through independent distributors and direct salespeople. The company operates in North America, South America, Europe, the Middle East, India, Africa, and the Asia Pacific. ESAB Corporation was founded in 1904 and is headquartered in North Bethesda, Maryland.

Sector

NDSN

10-Q
9/29/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
10-Q
9/30/22
10-Q
7/1/22
10-Q
4/1/22

DCF

Discounted Cash Flow Valuation of Esab Corp

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$289M	$375.7M	$478M	$594.8M	$723.7M	$860.4M	$999M	$1.132B	$1.252B	$1.349B	$1.417B	$14.17B
DCF		$326.7M	$361.4M	$391.1M	$413.8M	$427.8M	$431.9M	$425.7M	$409.2M	$383.5M	$350.2M	$3.502B
Value	$7.423B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth -2%

Earnings Stability -90%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	8.1%	9.7%	8.6%	7.4%	8.4%
ROA	-	9.2%	8.8%	11%	11%
ROE	6.2%	8%	16%	12%	14%

What is the average Net Margin?

The average Net Margin over the past 5 years is +8.01%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -1.23%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +9.66%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +1.79%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +14.29%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -3.66%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate reliability of earnings, and consideration about the future are more dependable.

Years	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	-	0.00	7.01	3.61	3.44
Debt Equity	-	0.00	0.88	0.62	0.59
MIN
Graham Stability	-	-	-	100%	100%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 3.44.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -3.40.

What is the Graham’s Stability?

Graham’s Stability measure stands at 1.00.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2020	12-2022	Trend
Revenue	12%	7%	-8.8%
Net Income	9.3%	-8.3%	-29%
Stockholders Equity	-13%	19%	1.9%
FCF	1.6%	62%	41%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is -.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -8.76%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -28.8%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is -.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +1.93%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +41.09%.