Gates Corporation (GTES) · Q2 2026 results and valuation

At −1.1% growth a year (3-year revenue growth), the model's fair value is $11.36 a share — the stock trades 125% above it. Today's price assumes 7.3% growth a year.

1. Guidance ↑

   Gates is increasing its guidance for core sales growth, adjusted EBITDA, and adjusted earnings per share.

2. Guidance

   Data center business grew more than 2x year-over-year, with sales contribution expected to step up in the second quarter.

   Source quote

   “Our updated guidance implies incrementally better performance for second half of the Given our solid second quarter financial results and the favorable shift in demand trends we observed exiting the quarter, we have raised our 2026 full year guidance for core sales growth and profitability. We believe we are also on track to deliver adjusted EBITDA margin of 23.5% or higher in the second half of 2026.”

3. Guidance

   GTES expects its data center business, which grew more than 2x over the prior year quarter, to increase its sales contribution starting in the second half.

   Source quote

   “We continue to grow our data center business, which expanded more than 2x versus the prior year quarter, and we anticipate sales contribution to step up in the second...”

Management was more positive answering analysts than in its script — usually a sign it was comfortable with the details it was asked about.

Sentences that drove the tone

“Automotive aftermarket grew high-single digits with solid growth achieved across all geographies.”

“Sales grew approximately 7% with core revenue growth of 4.9%, which enabled us to achieve record quarterly sales and adjusted earnings per share.”

“The expansion was led by high-single-digit growth in our industrial end markets, which was driven by mid-teens growth in the industrial OEM channel globally.”