Gates Industrial Corporation plc Ordinary Shares (GTES)

FairStock Score: 55/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

At $25.96 on 2026-10-13, Gates Industrial is a $6.6B industrial machinery company making engineered power transmission and fluid power products. I see a decent business with global scale and 13,000 employees, though not a wide-moat compounder. The latest filed quarter, fiscal Q2 2026 ended 2026-06-27, showed revenue of $941.6M and net income of $170.9M, or diluted EPS of $0.67; that compares with revenue of $883.7M and net income of $56.5M, or diluted EPS of $0.22, in fiscal Q2 2025. The profit jump is striking, but I want to know how much is durable. FairStock calls it a stalwart: 25.9% annual profit growth over five years and 4.3% revenue growth. Financial health is mixed: Piotroski 7/9 and D/E 0.61 are supportive, and free cash flow is $378.1M, a 5.8% FCF yield. But ROCE is only 4.44%, and Altman Z-score 1.96 is not comfortably safe. Valuation: P/E 18.41, P/B 1.87, EV/EBITDA 11.84. The Graham Number is $21.01, so the price carries a negative 23.56% margin of safety. PEG 0.09 looks cheap, but that ratio is distorted by a one-period profit spike. I would call this fair, maybe slightly full, unless the earnings step-up proves persistent and returns on capital improve. At this price, I see more value than speculation, but not the fat margin of safety I demand.

In plain English: Gates makes power transmission and fluid power parts used in machines and vehicles around the world. The business looks reasonably strong because sales are growing and it produces solid cash, but the profit generated from its assets is not high. At the recent price near $26, the shares look fair at best rather than clearly cheap, based on the numbers provided.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-27) · fiscal Q1 2026 10-Q (period ended 2026-03-28) · fiscal Q3 2025 10-Q (period ended 2025-09-27) · fiscal Q2 2025 10-Q (period ended 2025-06-28) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-28) · FY2023 10-K (period ended 2023-12-30)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer