Graco (GGG) opened 2026 with Q1 revenue of US$540.1 million and basic EPS of US$0.72, alongside trailing twelve month revenue of about US$2.2 billion and EPS of US$3.12 that sit against earnings growth of 5.8% over the past year. Over recent quarters the company has seen revenue move from US$528.3 million in Q1 2025 to US$593.2 million in Q4 2025 and EPS range between US$0.74 and US$0.83 over that period, while trailing twelve month earnings and revenue have both risen from US$2.1 billion in sales and EPS of US$2.88 at the end of 2024. With a current net margin around 23% and a dividend and growth profile that sits between faster growing market peers and income focused names, this set of results points to a business where profitability and cash generation remain the core of the story.

See our full analysis for Graco.

With the latest figures on the table, the next step is to see how these earnings line up with the most widely held narratives about Graco and where the numbers may push investors to rethink the story.

Margins Steady Around 23%

• Net profit over the last twelve months was US$516.2 million on US$2.2b of revenue, giving a 23% margin compared with 22.7% a year earlier.
• Consensus narrative points to tariff and acquisition costs as pressure points for margins. Even so, a 23% margin alongside Q1 2026 net income of US$118.5 million suggests that, so far, higher product costs and integration spending have not pushed profitability below last year’s level.
  • Analysts expect margins to move from about 23.3% to 24.8% over the next few years. The current 23% margin aligns with that steady, incremental improvement story.
  • Concerns about lower contractor segment margins and EMEA softness sit against trailing twelve month earnings of US$516.2 million. This indicates that any pressure has not erased overall profitability.

TTM EPS Growth Outpaces 5 Year Trend

• Trailing twelve month EPS is US$3.12, compared with a 5 year average earnings growth rate of 4.2% per year and 5.8% growth over the last year. This shows that the most recent period sits above the longer term pace.
• Bullish arguments that new products, acquisitions and share repurchases can support earnings are broadly in line with this, as trailing twelve month net income of US$516.2 million is higher than the US$486.1 million level in late 2024 and analysts see earnings growing about 8.8% per year from here.
  • Supporters highlight that integration of the COROB acquisition and a focus on U.S. manufacturing should help sustain margins. This is consistent with net margin moving from 22.7% to 23% over the last year.
  • Share repurchases are expected to reduce the share count by about 1.07% per year. Together with EPS at US$3.12 today and an analyst EPS expectation of US$3.96 by 2029, this fits the bullish view that per share earnings can keep building.

Bulls argue these margin and EPS trends still leave room for upside if product launches and acquisitions play out as expected, so it can be useful to see how that story is laid out in the dedicated bull case for Graco 🐂 Graco Bull Case

Valuation Sits Between Peers And DCF

• At a share price of US$82.18, the stock sits below a DCF fair value of US$90.05 and an analyst consensus target of US$94.00. Its 26.4x P/E is slightly lower than the 27.2x industry average but above the 24.9x peer average.
• Bearish views that growth may not justify a richer multiple than peers focus on forecast earnings growth of about 8.8% per year and revenue growth of 7.2% per year, which are both below the cited broader U.S. market averages of 15.9% for earnings and 10.9% for revenue.
  • Critics argue that paying a P/E premium to the peer average makes less sense when forecast growth trails the wider market, even with a 1.44% dividend yield and an 8.7% gap to the DCF fair value estimate.
  • At the same time, the price sitting below both the US$90.05 DCF fair value and the US$94.00 analyst target highlights how bears are weighing slower growth against a business that remains consistently profitable.

Skeptics often point to this mix of slower forecast growth and mid range valuation as a reason for caution, and the dedicated bear case sets out how those concerns could play out in more detail 🐻 Graco Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Graco on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If this combination of earnings, margins and valuation leaves you curious rather than convinced, it may be useful to review the underlying data and form your own view while the story is still developing. To see what others are optimistic about, start with the 4 key rewards.

See What Else Is Out There

Graco combines solid margins with a mid range valuation, but its forecast earnings and revenue growth sit below the broader U.S. market averages cited.

If that slower growth profile gives you pause, you can quickly compare it with companies that pair stronger outlooks and compelling valuations using the 54 high quality undervalued stocks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.