Gates Corporation (GTES)
NYSEIndustrialsIndustrial - MachinerySnapshot 2026-09-09
$26.32+2.61%
Close 2026-09-09 · 1-day change
NYSEIndustrialsIndustrial - MachinerySnapshot 2026-09-09
Warn: Primary pillar under pressure — EPS between $1.52 and $1.68 in fiscal 2026: FY26 EPS guidance $1.62-$1.70 vs $1.52 target.
Gates Industrial keeps steady revenue near $800 million in 2026. EPS guidance stays between $1.52 and $1.68. Free cash flow remains strong above 80%. The stock trades cheap versus peers with a PE of 17.3 versus 31.3.
Revenue growth is flat and EPS guidance was cut recently. Earnings and revenue face pressure from market headwinds. The stock price fell 10% from highs and risks further downside.
The price is about 19% below our fair value near $33. Analysts expect about 6% revenue growth. Our view aligns with cautious growth but sees risk from recent guidance cuts.
Breaks if: EPS falls below $1.52 in FY26
Continue to uphold the EPS guidance range of $1.52 to $1.68 for fiscal year 2026.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a focus on steady growth. The current thesis state is intact, supported by recent earnings beats and management's commitment to guidance upgrades.
The market currently prices GTES as cheap compared to its peers, reflecting a low expectations gap. There is a sense of fragility due to weak execution quality, but overall valuation remains justified.
Management is on track with its priorities, particularly in raising guidance for sales and profitability. However, there are mixed signals regarding capital expenditures and free cash flow conversion, which could impact future performance.
The long-term thesis hinges on the performance of sector bellwethers like GEV, PH, and TT. If these companies continue to perform well, GTES may benefit from positive sector momentum. Conversely, any negative guidance from these peers could create headwinds for GTES.
The most important moves since the prior daily snapshot.
Yes, our read has strengthened. The latest earnings beat supports this improved outlook. There are no new threats identified that could weaken the thesis.
as of 2026-09-09
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Breaks if: free cash flow margin falls below 80% in FY26
Breaks if: revenue falls below $775 million in FY26
Breaks if: PE rises above 25 without fundamental improvement
Overall, GTES is navigating a challenging environment with a stable management approach and a focus on growth. Not investment advice.