ESAB Corporation's (NYSE:ESAB) Popularity With Investors Is Clear

With a price-to-earnings (or "P/E") ratio of 26.4x ESAB Corporation (NYSE:ESAB) may be sending bearish signals at the moment, given that almost half of all companies in the United States have P/E ratios under 19x and even P/E's lower than 11x are not unusual. However, the P/E might be high for a reason and it requires further investigation to determine if it's justified. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. ESAB could be doing better as it's been growing earnings less than most other companies lately. One possibility is that the P/E is high because investors think this lacklustre earnings performance will improve markedly. If not, then existing shareholders may be very nervous about the viability of the share price. View our latest analysis for ESAB NYSE:ESAB Price to Earnings Ratio vs Industry January 9th 2026 If you'd like to see what analysts are forecasting going forward, you should check out our free report on ESAB. Does Growth Match The High P/E? ESAB's P/E ratio would be typical for a company that's expected to deliver solid growth, and importantly, perform better than the market. Taking a look back first, we see that there was hardly any earnings per share growth to speak of for the company over the past year. Although pleasingly EPS has lifted 31% in aggregate from three years ago, notwithstanding the last 12 months. Accordingly, shareholders would have probably welcomed those medium-term rates of earnings growth. Turning to the outlook, the next three years should generate growth of 17% per year as estimated by the ten analysts watching the company. That's shaping up to be materially higher than the 12% per annum growth forecast for the broader market. In light of this, it's understandable that ESAB's P/E sits above the majority of other companies. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future. The Final Word Using the price-to-earnings ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects. We've established that ESAB maintains its high P/E on the strength of its forecast growth being higher than the wider market, as expected. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. Unless these conditions change, they will continue to provide strong support to the share price. You always need to take note of risks, for example - ESAB has 1 warning sign we think you should be aware of. If P/E ratios interest you, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.