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$7.5B
Market Cap
18.3
P/E
2.32
PEG
8.8%
ROCE
8.4%
ROE
0.14
D/E
15.8%
OPM
-20.2%
% from 52W High
67
α RS
🔍 ESE is showing a high-conviction setup because it matches 3 of 37 tracked screener presets and RS Rating is 67. Net: Partial signal stack, not a recommendation. ? Conviction RS Rating
Sources
Conviction 3/37 · RS Rating 67
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📈 Price History
Ratio Health
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About

ESCO Technologies Inc. provides engineered components and systems for aviation, navy, defense, and industrial customers.

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📈 Growth Pattern
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Manager Shares Value % of Fund Period
Steve Cohen Point72 Asset Management 4.5K $1.3M 0.00% Mar 2026

SEC Form 13F data. 45-day lag from quarter end.

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📊 MIXED ESCO Q2 2026: Orders up 42%, adjusted EPS up 63% to $1.91, record backlog, raised guidance
Revenue & Profitability
Q2 2026 orders increased 42% (22% organic), sales grew 33.5% (13% organic). Adjusted EBIT margins improved 370 bps to 21.7%. Adjusted EPS rose 63% to $1.91. Year-to-date operating cash flow reached nearly $135 million, up from $46 million in the prior year. Full-year adjusted EPS guidance raised to $8.00-$8.25.
Outlook
Management is optimistic about long-term demand across served markets. In commercial aerospace, deliveries are expected to rise from ~1,400 aircraft in 2025 to over 2,000 per year by 2028. Defense aero benefits from higher budgets and new programs like F-47. Utility capital spending remains elevated due to aging infrastructure and rising electricity demand. Test demand is supported by favorable regulatory and standards environment.
Growth Drivers
Key growth drivers include commercial aerospace recovery (OEMs raising build rates), U.S. and U.K. Navy submarine programs (Virginia-class orders of $24 million in Q2), Doble condition monitoring (double-digit growth), and Test business (EMC and filter orders for government data centers and industrial projects). The Megger acquisition will create a scaled utility solutions platform.
Balance Sheet & CapEx
Capital spending in the first six months was down slightly compared to the prior year. No specific CapEx guidance was provided. The company is positioned well for the debt requirements of the Megger acquisition, which is expected to close in Q1 2027.
Margins
Adjusted EBIT margins improved 370 bps to 21.7% in Q2. A&D margins increased 160 bps to 28.6%, Test margins rose 300 bps to 15.4%, and Utility adjusted EBIT dollars grew nearly 11% (margin improvement at Doble offset by NRG declines). Management sees further margin expansion through volume leverage and pricing.
Key Risks
Risks flagged include volatility in the renewables market (NRG) due to policy changes and tax credit sunsets, potential deeper declines in renewables demand, and delays in U.S. surface ship programs affecting Maritime. Commercial aerospace recovery could be impacted by airline disruptions, though no material impact seen yet. Inflation and pricing pressure are monitored.
Generated by AI · Q2 2026 results · Not investment advice
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✓ 📞 Earnings Call Transcripts (5 quarters) submit a missing quarter
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📞 Earnings Call Transcripts (5)
Q3 2026 Q3 2026 2026-08-06
Q3 delivered strong revenue and earnings growth, with record backlog and robust demand across all segments. Full-year 2026 adjusted EPS guidance was raised to $8.30–$8.40, and the Megger acquisition remains on track for Q1 FY 2027 close.
Q2 2026 Q2 2026 2026-05-07
Record orders and sales growth driven by strong performance across all segments, with improved margins and cash flow. Raised 2026 EPS guidance and highlighted the accretive Megger acquisition, while managing renewables volatility and maintaining profitability.
Q1 2026 Q1 2026 2026-02-05
Q1 2026 saw record orders and strong sales growth, with adjusted EPS up 73% year-over-year and robust performance across all segments. Full-year guidance was raised for sales and earnings, driven by outperformance in the Test business and continued strength in Aerospace & Defense.
Q4 2025 Q4 2025 2025-11-20
Q4 and FY25 delivered record results, driven by the Maritime acquisition, strong organic growth, and margin expansion. FY26 guidance calls for continued double-digit sales and EPS growth, with robust order backlogs and a strong balance sheet supporting future M&A.
Q3 2025 Q3 2025 2025-08-07
Q3 delivered record backlog, 27% sales growth, and 25% higher adjusted EPS, driven by strong A&D and Test segments and the Maritime acquisition. Full-year guidance was raised, with adjusted EPS now expected to grow 21%-24% year-over-year.
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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

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Investment Risk:
Investing in securities, including US equities and ETFs, involves inherent risks including the potential loss of principal. All investments are subject to market fluctuations, economic conditions, regulatory changes, and other factors that may affect their value. Past performance is not indicative of future results. This analysis is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

No Investment Recommendation:
This analysis does not constitute, nor should it be interpreted as, an offer, solicitation, or recommendation to buy, sell, or hold any securities or financial products. Investors are strongly advised to conduct their own independent research and due diligence and to consult with a licensed financial advisor or an SEC-registered investment adviser before making any investment decisions, taking into account their individual financial situation, risk tolerance, and investment objectives.

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Information Sources:
The analysis is based on publicly available information including SEC filings (10-K, 10-Q), annual reports, management commentary, and publicly available financial data. Information is believed to be accurate as of the date of publication but may be subject to change without notice. Readers are encouraged to independently verify all information before acting upon it.

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