CluenexGates Corporation GTES
Gates Corporation scores weak on business quality (4.0 of 10). Here is why, in plain words, and what our sealed record shows.
Why it matters
- What Gates Corporation does
Gates Industrial manufactures power transmission and fluid power products, selling belts and hose assemblies to industrial and automotive end markets. The firm generates cash through recurring replacement demand for critical machinery parts.
- What it does best
Gates produces industry-leading gross margins of 40.6%, easily outperforming peers like TKR at 32.4%. This edge stems from proprietary material science and high-switching-cost applications in harsh industrial environments.
- The main risk
Interest coverage sits at 4.1x, leaving earnings sensitive to debt servicing costs if industrial demand softens further and pressures operating income.
Quality, check by check
Scored against its own industry, from company filings.
Operating margin reaches 15.1% backed by a 40.6% gross margin, but a low 10.7% return on equity highlights limited earnings conversion relative to total shareholder capital.
Proprietary belt and fluid power designs lock in industrial and automotive replacement channels, earning a 66th percentile gross margin rank that protects pricing power against direct rivals.
Revenue grew 1.0% to $3.5B over the latest period, reflecting a bottom quartile sector rank of 29 in growth and a top-line trend that remains largely stagnant compared to historical levels.
Total debt of $2.2B outweighs cash holdings of $812M, though net debt decreased to $1.4B alongside $379M in free cash flow, pointing to a stabilizing balance sheet.
Insiders
Executives and directors, from SEC Form 4 filings we read ourselves. Open market trades only; grants, option exercises and pre-planned sales left out.
1 sold $498K outside pre-planned sales.
Our sealed record on GTES
Verdicts appear here 30 days after we publish them; members see today's. Each one is in the nightly ledger, fingerprinted the night it was made.
The first sealed verdicts appear here on Oct 11, 2026.
Questions
Gates Corporation scores weak on the Cluenex quality check (4.0 of 10), measured against its own industry. Profitability is weak, moat fair, growth slow and financial health fair.
In the last 90 days of SEC Form 4 filings: 1 sold $498K outside pre-planned sales.
Oct 27, 2026.
See GTES today
- Today's verdict on GTES, and why
- Fair value with cautious, base and optimistic cases
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- Which stocks each signal names, the night it fires
Cite this page: Cluenex, “Gates Corporation (GTES)”, https://cluenex.com/stocks/gtes/, data as of Oct 10, 2026.