ESCO TECHNOLOGIES INC

Aerospace/defense/utility test-and-filtration maker with strong growth and returns; net margin is one-off-boosted.

Strengths

• Strong growth and returns — revenue +19.2% (68th), ROE 19.4% (73rd), ROA 12.4% (84th)
• Low leverage, good coverage — D/E 0.12 (26th), interest coverage 9.73
• Diversified A&D/utility/test end-markets — qualitative (per 10-K)

Risks

• Net margin one-off-boosted — 27.3% (91st) and net income +193.7% likely reflect a divestiture gain, not run-rate
• Government/defense funding exposure (~23% of revenue) — qualitative (per 10-K)
• Tight quick liquidity — 0.93 (21st)

Notable findings

• Customer concentration~34% of revenue from one customer/distributor — In 2025, approximately 34% of our net sales from continuing operations were to customers outside the United States
• Fund exitedNotable fund(s) exited this quarter: VANGUARD GROUP INC, RENAISSANCE TECHNOLOGIES LLC
• Strong balance sheetStrong balance sheet — $101M cash & investments
• New fund positionNotable fund(s) opened this quarter: CITADEL ADVISORS LLC
• Notable holderHeld by 5 notable fund(s): STATE STREET CORP, GOLDMAN SACHS GROUP INC, CITADEL ADVISORS LLC +2 more (as of 2026-03-31)
• China exposure● Imposition of domestic and international taxes, export controls, tariffs, embargoes, sanctions (such as those imposed on Russia and Iran) and other trade restrictions; ● Compliance with a variety
• AccumulatingInstitutional holders rose 8→9 QoQ (2025-12-31→2026-03-31)