Gates Industrial (NYSE:GTES) Posts Earnings Results, Beats Expectations By $0.03 EPS

Gates Industrial (NYSE:GTES) posted its quarterly earnings results on Friday. The company reported $0.47 earnings per share for the quarter, beating analysts’ consensus estimates of $0.44 by $0.03, FiscalAI reports. Gates Industrial had a return on equity of 10.11% and a net margin of 10.37%. The company had revenue of $903.60 million for the quarter, compared to analysts’ expectations of $904.77 million. During the same period last year, the firm earned $0.39 earnings per share. Gates Industrial’s quarterly revenue was up 5.6% on a year-over-year basis.

Here are the key takeaways from Gates Industrial’s conference call:

• Gates reported solid third-quarter execution, with core sales up 5.5%, adjusted EBITDA up 10%, and record adjusted EBITDA margin of 23.8% and adjusted EPS of $0.47. Growth was led by industrial markets, commercial on-highway, and personal mobility.
• Management raised full-year adjusted EBITDA guidance to $809 million–$823 million and adjusted EPS guidance to $1.66–$1.72, while maintaining its 3.5% midpoint for core sales growth. Fourth-quarter core revenue growth is expected to accelerate to approximately 6.5%.
• Industrial demand continued to broaden, with North American industrial OEM sales up more than 20%, industrial aftermarket sales accelerating, and global book-to-bill remaining above 1.0. Management said the improving cycle provides a favorable setup for 2027, including a potential recovery in agriculture.
• Strategic growth areas are gaining traction: personal mobility sales rose approximately 35% and data-center revenue increased about 2.5 times year over year. Gates is adding products, commercial resources, and capacity in data-center applications, while targeting sustained 20%–30% growth in personal mobility over the next several years.
• Fourth-quarter margins are expected to face normal seasonal pressure, less favorable price-cost timing, and roughly a 100-basis-point year-over-year headwind from higher variable compensation. Fluid Power margins are also being weighed down by investments in data centers and broader product-development and commercial initiatives.

Gates Industrial Stock Down 9.8%

Shares of Gates Industrial stock traded down $2.57 during midday trading on Friday, hitting $23.68. The company’s stock had a trading volume of 2,396,364 shares, compared to its average volume of 2,147,599. The stock has a 50-day simple moving average of $26.10 and a 200-day simple moving average of $25.75. The company has a quick ratio of 2.36, a current ratio of 3.24 and a debt-to-equity ratio of 0.58. The firm has a market capitalization of $5.99 billion, a P/E ratio of 16.76 and a beta of 1.28. Gates Industrial has a 1-year low of $20.88 and a 1-year high of $30.34.

Analysts Set New Price Targets

A number of equities research analysts have weighed in on the company. JPMorgan Chase & Co. lifted their price objective on Gates Industrial from $32.00 to $34.00 and gave the company an “overweight” rating in a report on Monday, August 3rd. KeyCorp lifted their price objective on Gates Industrial from $31.00 to $34.00 and gave the stock an “overweight” rating in a research report on Monday, August 3rd. Citigroup upped their target price on shares of Gates Industrial from $33.00 to $35.00 and gave the company a “buy” rating in a report on Monday, August 3rd. Weiss Ratings downgraded shares of Gates Industrial from a “buy (b)” rating to a “buy (b-)” rating in a research note on Friday, October 23rd. Finally, Wells Fargo & Company raised their price objective on Gates Industrial from $26.00 to $30.00 and gave the stock an “equal weight” rating in a report on Monday, August 3rd. Nine analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company’s stock. Based on data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and a consensus target price of $32.45.

Insider Buying and Selling

In other Gates Industrial news, Director Peifang Zhang sold 6,000 shares of the business’s stock in a transaction dated Wednesday, August 5th. The stock was sold at an average price of $29.56, for a total value of $177,360.00. Following the completion of the sale, the director owned 44,044 shares of the company’s stock, valued at $1,301,940.64. The trade was a 11.99% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Corporate insiders own 2.80% of the company’s stock.

Gates Industrial Company Profile

Gates Industrial Corporation plc (NYSE: GTES) is a manufacturer of engineered power transmission and fluid power products. The company develops solutions designed to transfer power, control motion, and manage the flow of fluids in industrial and mobile applications.

Its product portfolio includes synchronous and V-belts, belt drives, hoses, hydraulic assemblies, couplings, tensioners, pulleys, and related components. Gates serves original equipment manufacturers, distributors, and aftermarket customers across industries such as automotive, agriculture, construction, energy, manufacturing, and general industrial equipment.

The company traces its roots to the Gates Rubber Company, founded in 1911 in Denver, Colorado.