QualityDipStocks / Industrials · Industrial machinery
Gates Industrial GTES
Outside our quality screen, so we don’t track its dips. It’s 20% below its 52-week high.
Outside our quality screen, trading near our fair value estimate.
Worth knowing
- Share count down 5% in 2 years
From the data on this page, as of the last close. How we pick these
- Fair value est.
- $22.77−5%
- Market Value
- forming
- Off 52-wk high
- −20%
- Risk vs market
- Highbeta 1.75
4 bullish · 5 bearish See why
Repriced or dip?
Dip: business intact
The price is 20% below its 52-week high (Aug 4), but the business held up: net cash (cash minus debt) +0.3% of market cap since the high, shares outstanding fewer shares, each owns more, revenue growth rate +0.6 pts.
Some numbers held up (net cash (cash minus debt) +0.3% of market cap since the high, shares outstanding fewer shares, each owns more, revenue growth rate +0.6 pts), others slipped. The price is 20% below its 52-week high.
The price is 20% below its 52-week high, and the business changed too.
Within 10% of its 52-week high, so there is no dip to judge yet.
The evidence 10 numbers, high vs now
- Revenue, last 12 months$3.5B → $3.6B (+1.4%)about the same
- Revenue growth rate+3.3% → +4.0% a year (+0.6 pts)held up
- Earnings per share, 12 months$1.42 → $1.44 (+1.6%)held up
- Free cash flow, 12 months$405M → $367M (−9.4%)about the same
- Operating margin13.3% → 13.5% (+0.3 pts)held up
- Shares outstanding−0.2% (fewer shares, each owns more)held up
- Net cash (cash minus debt)+0.3% of market cap since the highheld up
- Stock vs its sector (Industrials)stock −20%, sector median −9% since Aug 4held up
- Price fall vs business numbersprice −20%, revenue/EPS/FCF median +1% (shown, not scored)
- Valuation multipleP/FCF 18.9× at the high → 16.7× now (shown, not scored)
Business numbers as reported at the high (12 months to Jun 27, 2026) vs the latest filing (12 months to Sep 26, 2026). Each measure is scored from −1 (business changed) to +1 (business intact) and weighted: revenue, earnings per share, free cash flow, operating margin, revenue growth rate, share count, net cash and the move vs its sector. 60 or more reads as a dip, 40 or less as a repricing. Analyst estimates are not in our data, so they are not used. How to read it
Data-based read, not advice.
Priced in
How much growth the market assumed at the 52-week high, the low and today (a reverse DCF).
At the high ($29.84, Aug 4) the price assumed about 6%/yr free-cash-flow growth; at the low ($21.04, Mar 30) about 0%; today about 4%. The last 3 years delivered 29%/yr (free cash flow).
Dashed line: what the last 3 years delivered, 29%/yr (free cash flow)
| High | Low | Now | |
|---|---|---|---|
| Price | $29.84Aug 4 | $21.04Mar 30 | $24.01 |
| Implied growth | +6% | 0% | +4% |
| P/E | 21.0× | 21.8× | 16.7× |
| P/FCF | 18.9× | 13.5× | 16.7× |
| EV/Sales | 2.6× | 2.0× | 2.1× |
What this means: the higher the implied growth, the more the price already counts on. If today's number sits well below what the business has delivered, the market expects less than its track record.
How it’s computed
Reverse DCF: the same 10-year free-cash-flow model as our fair value estimate (9.5% discount rate, growth for years 1–5 fading to 3% by year 10, 3% after), solved for the growth that makes it equal the market value at each price. For the high and the low we use only the filings that were public on that day, so nothing from a later report leaks back. Market value = that close × diluted shares. P/E = market value / 12-month net income; Price / FCF = market value / 12-month free cash flow; EV / Sales = (market value + debt − cash) / 12-month revenue. Hidden when the share count moved over 20% (split, merger), free cash flow is negative, or the company reports in another currency.
Valuation
What we estimate it's worth, and how it ranks on value vs every stock we cover.
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 3.0% ±2 points. Bear = 10.5% and 1.0%; bull = 8.5% and 5.0% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price sits inside the range.
What the price implies To be worth today’s price, GTES’s free cash flow would need to grow about 4% a year for five years; our estimate uses 3%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 31 to Nov 2, 252 sessions). Beta = how much GTES moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Swings much more than the market, and its own price swings are 3.1× the S&P 500’s.
- Beta vs S&P 500
- 1.75
- Volatility
- 40% vs 13% SPY
- Correlation SPY
- 0.56
- Correlation QQQ
- 0.50
How it ranks
Where GTES stands vs every one of the 1,996 stocks we cover that has the number. Longer bar = better.
Not in the top quarter on any of these 6 measures
- Discount to fair value estimate5% · price above our base caseTop 48%of 1,314
- Free cash flow yield6% · free cash flow vs market capTop 31%of 1,391
- Dividends + buybacks yield3.3% · cash paid out or used to retire shares, vs market capTop 43%of 1,836
- Revenue growth, last 12 months+4% · vs the 12 months beforeLowest 25%of 1,814
- Operating margin14% · of sales kept as operating profitTop 45%of 1,288
- Return on invested capital9.7% · profit per dollar of capitalLowest 47%of 838
From SEC filings and our fair value estimate model. A ranking, not advice.
Valuation details
DCF $22.77 · FCF value $40.02
Assumes 3.0% growth for 5 years (revenue grew -1.1% a year FY22–FY25; floored at 3%), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $1.44 a share (trailing 12 months to Sep 26, 2026), from the 10-Q filed Oct 30, 2026. Net debt $1.4B, not deducted.
Fundamentals
The business itself: sales, profits, cash and debt, from SEC filings.
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 4 of 5
ValuationP/E of 16.7× vs a 26.5× median for the 220 Industrials companies we cover.
ValuationFree-cash-flow yield of 6.0% (price / FCF 16.7×): $367M of free cash in the last 12 months.
GrowthDiluted EPS grew 30% to $0.96 in FY2025.
Cash returnsShare count down 2.3% in a year: $202M of buybacks over 12 months.
Top bearish points 5 of 5
GrowthSales grew only −1.1% a year from FY2022 to FY2025.
GrowthSales grew 4.0% over the last 12 months, below the 9.4% median for the 256 Industrials companies we cover.
ProfitabilityReturn on equity of 11%, below the 13% median for the 234 Industrials companies we cover.
QualityDoesn’t pass our quality screen: ROE under 12% and ROIC under 10%.
RiskSwings hard: beta 1.75 vs the S&P 500 and 40% yearly volatility (SPY 13%).
All fundamentals
P/E 16.7 · FCF yield 6.0% · ROE 11%
Valuation
- P/E
- 16.7×Industrials median 26.5×
- Price / FCF
- 16.7×
- FCF yield
- 6.0%
- EV / EBITDA
- 10.7×
- Price / sales
- 1.73×
- Price / book
- 1.72×
- Market cap
- $6.1Bprice × diluted shares
- Enterprise value
- $7.5B
Growth
- Revenue, 12 months
- $3.6B
- Sales growth, 12 months
- +4.0%vs the 12 months before
- Sales growth, 3 yrs
- −1.1%/yrfrom FY2022
- Diluted EPS, 12 months
- $1.43
- EPS growth, last FY
- +29.7%
- Net income, 12 months
- $368M
- Net income growth
- +56%12 months vs before
Profitability
- Gross margin
- 40.3%
- Operating margin
- 13.5%
- Net margin
- 10.4%
- FCF margin
- 10.3%
- Return on equity
- 11%
- Return on invested capital
- 10%
Balance sheet
- Cash & short-term inv.
- $831M
- Total debt
- $2.2B
- Net cash
- −$1.4B
- Debt / equity
- 0.62×
- Interest coverage
- 3.9×operating income / interest
Cash flow & returns
- Free cash flow, 12 months
- $367M
- FCF growth, 12 months
- +14%
- Dividend yield
- 0%
- Payout ratio
- n/anot reported in its SEC filings
- Buybacks, 12 months
- $202M3.3% of market cap
- Share count, 1 year
- −2.3%diluted shares vs a year ago
- Stock-based comp
- $29M
Trailing 12 months to Sep 26, 2026; balance sheet at Sep 26, 2026. From Gates Industrial’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
The business
FCF $0.4B · Sales +6%
- Free cash flow, 12 months$0.4B
- Free-cash-flow yield6.0%
- Free-cash-flow margin11%
- Gross margin41%
- Operating margin16%
- Return on invested capital9%
- Return on equity10%
- Sales growth (latest quarter vs year-ago quarter)+6%
- Net debt / EBITDA2.0×
Chart & levels
Where the price is vs its key levels and trends.
Key levels
Every level vs today’s $24.01
- 52-wk lowlowest close, 1 year$21.04−12.4%
- Fair value est.base case$22.77−5.2%
- PriceMon Nov 2 close$24.01you are here
- 52-wk highhighest close, 1 year$29.84+24.3%
Momentum & 52-week range
RSI 36 · 5 days −5.8%
Signals
Reversal signal setups, the public ledger and the next earnings date.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only run on companies that pass our quality screen.
GTES is outside our quality screen
One text when a published rule fires on one of the 332 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.
Voices & buzz
Who is talking about it, and how it compares with peers.
Who’s talking about it
Notable investors, executives, analysts and public figures on Gates Industrial in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 3, 1:01 PM ET.
Compare with peers
Closest in size in Industrial machinery
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.