# Gates Industrial (GTES.US)

Canonical: https://gigainvestors.com/s/GTES

Analysis as of: 2026-10-16T07:28:54.453Z. Financial observations: FY2014–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $26.34 per share; close as of 2026-10-15.

Estimated value: low $19.04 per share, central $21.25 per share, high $24.20 per share. Buy at or below the central value $21.25 per share. Valuation as of 2026-10-16T07:28:54.453Z; scenarios are not confidence intervals.

Expected annual return: 8.4% at the stated quote. About 8.4% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 4 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 0

- Operating margin variation: 0.23×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.07×

- FY2017: 0.13×

- FY2018: 0.15×

- FY2019: 0.11×

- FY2020: 0.08×

- FY2021: 0.14×

- FY2022: 0.11×

- FY2023: 0.13×

- FY2024: 0.14×

- FY2025: 0.15×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 12.6%

- ROIC, second-lowest year: 7.6%

- Typical minus recent gross margin: -1.6 pp

- Typical gross margin (annual median): 38.3%

- Recent gross margin (lower of latest and 3-year median): 39.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.5%

- ROIC including acquisitions, ten-year median: 6.7%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 7.6%

- FY2017: 17.4%

- FY2018: 17.9%

- FY2019: 11.4%

- FY2020: 7.0%

- FY2021: 14.9%

- FY2022: 11.5%

- FY2023: 13.8%

- FY2024: 11.1%

- FY2025: 14.4%

### economics: pass

- Owner earnings / net income, 5-yr: 1.56×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $1.9B

- Net income, five-year total: $1.2B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 0.4 pp

- Working capital / revenue, change between three-year averages: 2.9 pp

- Working capital / revenue, final three-year average: 29.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.41×

- FY2022: 1.59×

- FY2023: 1.63×

- FY2024: 1.69×

- FY2025: 1.56×

### management: pass

- Historical market-dollar context (not the management verdict): 2018 to 2025 (7 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 17.4% vs 13.8%

- Per-share earnings: 0.10 to 0.84 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.5%

- Ordinary dilution, 5-year annual growth: -2.3%

- Market cap gain: $1.6B

- Cumulative retained earnings: $1.3B

- Diluted shares, 10-year annual growth: 0.5%

- Diluted shares, 5-year annual growth: -2.3%

- $1 test, starting fiscal year: FY2018

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 30.5%

- Per-share value change: $0.74

- Per-share value, starting three-year median: $0.10

- Per-share value, ending three-year median: $0.84

- Buybacks concentrated in cheaper years (correlation): 0.54

- Average buyback yield: 3.1%

- Buyback history: 6 years

- Debt-funded buybacks: No

- Acquisition spending: $70M

- Cumulative net income, 10 years: $2.4B

- ROIC, first three-year median: 17.4%

- ROIC, last three-year median: 13.8%

Chart: Earnings per share; fiscal year observations.

- FY2016: $0.10

- FY2017: $0.60

- FY2018: $0.84

- FY2019: $2.37

- FY2020: $0.27

- FY2021: $1.00

- FY2022: $0.77

- FY2023: $0.84

- FY2024: $0.74

- FY2025: $0.96

### accounting: pass

- Sloan accruals: -3.2%

- Receivables to sales index (DSRI): 1.04×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 5.7%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.90×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.97×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -3.8%

- FY2017: -2.4%

- FY2018: -1.0%

- FY2019: 4.6%

- FY2020: -3.1%

- FY2021: -1.1%

- FY2022: -0.6%

- FY2023: -3.4%

- FY2024: -2.7%

- FY2025: -3.2%

## Holders

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 4% a year for ten years · "Gates Industrial Raises 2026 Outlook as Industrial Demand Strengthens" (finance.yahoo.com, Aug 2026) · sales +1%

Story as of 2026-10-16T09:58:51.068Z; price observation 2026-10-15.

Price needs cash profits to grow 4% a year for ten years

- 2025-08-29: Surging Earnings Estimates Signal Upside for Gates Industrial (GTES) Stock ([finance.yahoo.com](https://finance.yahoo.com/news/surging-earnings-estimates-signal-upside-162002125.html))

- 2025-10-30: Gates Industrial (GTES) Falls 12.86% on Lower Sales Growth ([finance.yahoo.com](https://finance.yahoo.com/news/gates-industrial-gtes-falls-12-153134434.html))

- 2025-11-06: Should Gates Industrial's (GTES) Strong Earnings and Buyback Offset Lowered 2025 Revenue Outlook? ([finance.yahoo.com](https://finance.yahoo.com/news/gates-industrials-gtes-strong-earnings-171754832.html))

- 2026-02-13: GTES Q4 Deep Dive: Data Center and Mobility Growth Offset Industrial Caution ([finance.yahoo.com](https://finance.yahoo.com/news/gtes-q4-deep-dive-data-053429904.html))

### Sales · FY2024–2025

sales +1%; source https://www.sec.gov/Archives/edgar/data/1718512/000162828026007719/gtes-20251231.htm; observed 2026-02-12.

- FY2016: $2.7B 

- FY2017: $3.0B 

- FY2018: $3.3B 

- FY2019: $3.1B 

- FY2020: $2.8B 

- FY2021: $3.5B 

- FY2022: $3.6B 

- FY2023: $3.6B 

- FY2024: $3.4B 

- FY2025: $3.4B 

### Gross margin · FY2025

gross margin 40.5%; source https://www.sec.gov/Archives/edgar/data/1718512/000162828026007719/gtes-20251231.htm; observed 2026-02-12.

- FY2016: 37.7% 

- FY2017: 40.0% 

- FY2018: 39.7% 

- FY2019: 37.0% 

- FY2020: 37.0% 

- FY2021: 38.5% 

- FY2022: 35.2% 

- FY2023: 38.1% 

- FY2024: 39.9% 

- FY2025: 40.5% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in specialty industrial machinery; annual sales are USD 3.4 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1718512/000162828026007719/gtes-20251231.htm (filed 2026-02-12); FY2025: revenue 3443200000; grossProfit 1394200000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); GTES.US: Gates Industrial Corporation Ltd. manufactures and sells engineered power transmission and fluid power solutions in the United States, rest of North America, South America, the United Kingdom, Luxembourg, rest of Europe, the Middle East, Africa, India, East Asia, and Greater China. It operates through two segments, Power Transmission and Fluid Power. The company offers solutions for stationary and mobile drives, engine systems, and personal mobility application platforms; elastomer drive belts; asynchronous and synchronous belts, including V-belts, transmission belts, and micro-V belts; metal drive components, such as tensioners, idlers, pulleys, sprockets, mechanical water pumps, and other accessories used in belt drive systems; and kits for the automotive replacement channel. It also provides fluid power solutions for stationary and mobile hydraulics, vehicle systems, and other industrial application platforms; hydraulics comprising hoses, tubing, couplings, and fittings, as well as assemblies; thermal and emissions management and related products; and industrial hoses, including data center pumps. The company's products are used in applications across various markets, including diversified industrial applications comprising automated manufacturing, logistics systems, and data centers; consumer applications consisting of printers, power washers, automatic doors, and vacuum cleaners; industrial off-highway, such as construction and agriculture; industrial on-highway commercial vehicles, including heavy-duty trucks and buses; energy and resources markets, such as oil, gas, and mining; and personal mobility, including scooters, motorcycles, bicycles, all-terrain vehicles, and snowmobiles. It sells its products under the Gates brand. The company offers its products to aftermarket channel customers and original equipment manufacturers. Gates Industrial Corporation Ltd. was formerly known as Gates Industrial Corporation plc and changed its name to Gates Industrial Corporation Ltd. in July 2026. Gates Industrial Corpo

### Why customers stay

Margins ranged from 38.1% to 40.5% during 2023–25; it earns 12.6% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2023: grossProfit / revenue = 38.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2024: grossProfit / revenue = 39.9%.

- Source: https://www.sec.gov/Archives/edgar/data/1718512/000162828026007719/gtes-20251231.htm (filed 2026-02-12); FY2025: grossProfit / revenue = 40.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); 10-year return on capital observations [[2016,0.07553191489361702],[2017,0.1736338562316842],[2018,0.17910937575572652],[2019,0.1136676499508358],[2020,0.07021920631000925],[2021,0.14885697454590138],[2022,0.11453908167737196],[2023,0.13784748056696766],[2024,0.11056448632668144],[2025,0.14359987146995085]]; median 0.12619328112216982. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

"The decrease was offset by a $28.6 million benefit from pricing." (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1718512/000162828026007719/gtes-20251231.htm (filed 2026-02-12); The decrease was offset by a $28.6 million benefit from pricing.

### Where the cash goes

Paid dividends in 8 of 10 years; bought back USD 119.3 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2016: growth capex 0; upkeep 85800000; owner earnings 209000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2017: growth capex 0; upkeep 111100000; owner earnings 252400000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2018: growth capex 0; upkeep 182700000; owner earnings 281100000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2019: growth capex 0; upkeep 83100000; owner earnings 829200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2020: growth capex 0; upkeep 67400000; owner earnings 212348837.20930234. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2021: growth capex 0; upkeep 87000000; owner earnings 418702052.5203743. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2022: growth capex 0; upkeep 87000000; owner earnings 351000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2023: growth capex 0; upkeep 71400000; owner earnings 379000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2024: growth capex 0; upkeep 83100000; owner earnings 328700000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1718512/000162828026007719/gtes-20251231.htm (filed 2026-02-12); FY2025: growth capex 0; upkeep 73200000; owner earnings 392000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); Dividend observations: [[2016,800000],[2017,100000],[2018,35200000],[2019,28800000],[2020,19000000],[2021,26000000],[2022,28700000],[2023,100000000],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1718512/000162828026007719/gtes-20251231.htm (filed 2026-02-12); FY2025: cash repurchases 119300000 USD.

### Are managers owners

Insiders own 2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); GTES.US SharesStats.PercentInsiders = 1.983 percentage points; cache date 2026-10-16.

### What could break it

US import tariffs could raise product costs.

- Source: https://www.sec.gov/Archives/edgar/data/1718512/000162828026007719/gtes-20251231.htm (filed 2026-02-12);  workforce are located in the U.S. Approximately 37% of our Fiscal 2025 revenues were generated from customers in the U.S. and we have manufacturing, sales and service facilities across several states in the U.S. Accordingly, our business and results of operations, as well as the business and results of operations of many of our vendors and customers, are subject to risks associated with U.S. government policies, actions, and legislation, including, without limitation, risks related to:

•economic and political instability related to foreign relations policies and actions;

•the imposition of tariffs and other trade restrictions or embargoes and uncertainty related thereto, including inflationary and deflationary pressures and retaliatory actions;

•withdrawal of or changes in federal funding and support of organizations and programs that affect companies operating in the U.S. and their workforces, including those related to cyber security; and

•other changes to U.S. policies that may have a negative impact on U.S. economic conditions or us.

The likelihood and duration of such occurrences and their potential effect on us, our vendors and customers, are unpredictable and our efforts to minimize or eliminate the effects of these occurrences may not be successful. For example, recent U.S. tariff policies have been volatile and remain uncertain, making it difficult for us and our vendors to predict or act to mitigate negative impacts of the tariffs. While we have taken measures to help mitigate U.S. and retaliatory tariffs enacted in 2025, if we are unable to recoup cost increases resulting from current or future tariffs through our pricing strategies on a timely basis or at all, or are unable to offset these cost increases through other means, our operating margins and results of operations may be materially adversely affected. Moreover, we may be impacted by tariffs to a greater degree than our competitors who operate in countries that are not subject to tariffs or are subject to lesser tariffs, placing us at a disadvantage. Uncertainty with respect to tariffs and other U.S. foreign relations policies and actions has led to, and may continue to lead to, volatility in the global financial markets, which could negatively impact demand for our products and increase future costs of capital. Certain of these risks may be exacerbated if key trading partners enact or coordinate retaliatory efforts against the U.S. or U.S.-headquartered companies.

14

Table of Contents

We are subject to economic, political and other risks associated with international operations that could adversely affect our business and our strategy to capitalize on our global reach.

A substantial portion of our operations are conducted and located outside the U.S. For Fiscal 2025, approximately 63% of our net sales originated from outside of the U.S. We have manufacturing, sales and

### What the price says

The price assumes cash profits grow 4% yearly over ten years; actual growth was 60.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); Ten-year compound average after fade. Initial solved rate 0.04387278466611344. Price 26.34; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.012903225806451613 → FY2025 1.504597091064952. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2018-01: $19.60 per share

- 2018-02: $17.36 per share

- 2018-03: $17.51 per share

- 2018-04: $15.66 per share

- 2018-05: $14.86 per share

- 2018-06: $16.27 per share

- 2018-07: $15.57 per share

- 2018-08: $18.23 per share

- 2018-09: $19.50 per share

- 2018-10: $15.05 per share

- 2018-11: $14.73 per share

- 2018-12: $13.24 per share

- 2019-01: $14.91 per share

- 2019-02: $16.10 per share

- 2019-03: $14.34 per share

- 2019-04: $16.08 per share

- 2019-05: $11.28 per share

- 2019-06: $11.41 per share

- 2019-07: $10.98 per share

- 2019-08: $8.70 per share

- 2019-09: $10.07 per share

- 2019-10: $10.00 per share

- 2019-11: $11.89 per share

- 2019-12: $13.76 per share

- 2020-01: $12.47 per share

- 2020-02: $10.46 per share

- 2020-03: $7.38 per share

- 2020-04: $8.59 per share

- 2020-05: $10.05 per share

- 2020-06: $10.28 per share

- 2020-07: $10.54 per share

- 2020-08: $11.29 per share

- 2020-09: $11.12 per share

- 2020-10: $11.10 per share

- 2020-11: $12.88 per share

- 2020-12: $12.76 per share

- 2021-01: $14.12 per share

- 2021-02: $15.00 per share

- 2021-03: $15.99 per share

- 2021-04: $17.25 per share

- 2021-05: $18.16 per share

- 2021-06: $18.07 per share

- 2021-07: $18.11 per share

- 2021-08: $16.38 per share

- 2021-09: $16.27 per share

- 2021-10: $16.44 per share

- 2021-11: $16.03 per share

- 2021-12: $15.91 per share

- 2022-01: $15.47 per share

- 2022-02: $15.84 per share

- 2022-03: $15.06 per share

- 2022-04: $12.75 per share

- 2022-05: $12.76 per share

- 2022-06: $10.81 per share

- 2022-07: $12.30 per share

- 2022-08: $10.72 per share

- 2022-09: $9.76 per share

- 2022-10: $11.15 per share

- 2022-11: $11.62 per share

- 2022-12: $11.41 per share

- 2023-01: $13.21 per share

- 2023-02: $14.04 per share

- 2023-03: $13.89 per share

- 2023-04: $13.47 per share

- 2023-05: $11.72 per share

- 2023-06: $13.48 per share

- 2023-07: $13.62 per share

- 2023-08: $12.28 per share

- 2023-09: $11.61 per share

- 2023-10: $10.92 per share

- 2023-11: $12.26 per share

- 2023-12: $13.42 per share

- 2024-01: $12.88 per share

- 2024-02: $14.72 per share

- 2024-03: $17.71 per share

- 2024-04: $17.62 per share

- 2024-05: $17.42 per share

- 2024-06: $15.81 per share

- 2024-07: $18.59 per share

- 2024-08: $18.16 per share

- 2024-09: $17.55 per share

- 2024-10: $19.35 per share

- 2024-11: $22.16 per share

- 2024-12: $20.57 per share

- 2025-01: $20.69 per share

- 2025-02: $21.64 per share

- 2025-03: $18.41 per share

- 2025-04: $18.92 per share

- 2025-05: $21.15 per share

- 2025-06: $23.03 per share

- 2025-07: $24.80 per share

- 2025-08: $25.56 per share

- 2025-09: $24.82 per share

- 2025-10: $22.08 per share

- 2025-11: $22.76 per share

- 2025-12: $21.47 per share

- 2026-01: $23.02 per share

- 2026-02: $27.57 per share

- 2026-03: $22.61 per share

- 2026-04: $25.61 per share

- 2026-05: $25.92 per share

- 2026-06: $27.97 per share

- 2026-07: $27.98 per share

- 2026-08: $25.58 per share

- 2026-09: $26.20 per share

- 2026-10: $26.34 per share

## Annual estimated value (USD per share)

- FY2018: low $10.57 per share, central $11.89 per share, high $13.64 per share

- FY2019: low $11.33 per share, central $12.66 per share, high $14.42 per share

- FY2020: low $10.08 per share, central $11.28 per share, high $12.87 per share

- FY2021: low $12.51 per share, central $13.99 per share, high $15.96 per share

- FY2022: low $15.11 per share, central $16.95 per share, high $19.40 per share

- FY2023: low $17.38 per share, central $19.46 per share, high $22.21 per share

- FY2024: low $16.22 per share, central $18.14 per share, high $20.69 per share

- FY2025: low $18.19 per share, central $20.30 per share, high $23.12 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1718512/000162828026007719/gtes-20251231.htm); period 2025-12-31, filed 2026-02-12.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.