Graham (GHM) AI Stock Analysis

• Market Cap: $530.57M
• Dividend Yield: N/A
• Average Volume (3M): 113.18K
• Price to Earnings (P/E): 38.3
• Beta (1Y): 1.64
• Revenue Growth: 14.64%
• EPS Growth: 182.19%
• Country: US
• Employees: 595
• Sector: Industrials
• Sector Strength: 78
• Industry: Industrial - Machinery
• EPS (TTM): 0.42
• Shares Outstanding: 10,975,874
• 10 Day Avg. Volume: 100,699
• 30 Day Avg. Volume: 113,176
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 2.52
• Enterprise Value/Gross Profit: 9.82
• Enterprise Value/Ebitda: 23.56
• 1Y Price Target: $58.67
• Price Target Upside: 20.47% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 70 Outperform
• Price Target: $55.00 ▲(12.94% Upside)

Graham Corporation's overall stock score reflects strong financial performance and positive earnings call highlights, particularly in revenue growth and strategic investments. However, technical analysis and valuation concerns, such as high P/E ratio and cash flow challenges, temper the overall outlook.

Positive Factors

Backlog

GHM's backlog of $482.9M exceeded forecasts by 21.7%, indicating strong future demand.

Financial Performance

GHM's F1Q26 EBITDA was $6.8M, which was 33.3% higher year-over-year and above forecasts.

Negative Factors

Profit Margins

GHM expects more lower-margin equipment manufacturing work for the rest of FY26, impacting profit margins.

Revenue

GHM's revenue was below expectations due to weaker international sales and a decline in the Space segment.

Graham Business Overview & Revenue Model

Company Description

Graham (GHM) is a diversified technology and manufacturing company specializing in advanced industrial solutions across various sectors, including energy, aerospace, and automotive. The company focuses on innovative engineering, producing high-performance components, and providing cutting-edge services that enhance operational efficiency and sustainability for its clients. With a commitment to quality and technological advancement, Graham delivers a range of products from precision machined parts to complete systems integration.

How the Company Makes Money

Graham generates revenue through multiple key streams, primarily by selling its manufactured products and providing engineering services to various industries. The company earns income from direct sales of components and systems, as well as from long-term contracts and projects in sectors such as energy and aerospace. Additionally, Graham benefits from strategic partnerships with leading firms and government contracts, which provide stable revenue sources and opportunities for growth. The company's emphasis on research and development allows it to create innovative solutions that meet market demands, further driving its profitability.

Graham Financial Statement Overview

Summary

Graham demonstrates solid financial health with strong revenue growth and profitability metrics, supported by a stable balance sheet with low leverage. However, cash flow challenges, particularly in free cash flow generation, pose potential risks.

Income Statement

Graham shows a strong revenue growth trajectory with a 2.64% increase in TTM, supported by improving gross and net profit margins. The gross profit margin stands at 25.63%, indicating efficient cost management. However, the EBIT and EBITDA margins have slightly decreased compared to the previous annual report, suggesting some operational challenges.

Balance Sheet

The company maintains a robust balance sheet with a low debt-to-equity ratio of 0.054, reflecting conservative leverage. The return on equity is healthy at 11.80%, indicating effective use of equity to generate profits. The equity ratio of 48.89% shows a strong equity base relative to total assets, enhancing financial stability.

Cash Flow

Cash flow performance is mixed, with a significant decline in free cash flow growth at -279.92% TTM, raising concerns about cash generation. The operating cash flow to net income ratio is 1.10, indicating adequate cash flow generation relative to net income. However, the negative free cash flow to net income ratio suggests challenges in converting profits into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	215.43M	209.90M	185.53M	43.03M	122.81M	97.49M
Gross Profit	55.21M	52.86M	40.59M	7.16M	9.13M	20.47M
EBITDA	23.01M	21.12M	11.25M	7.62M	-5.17M	5.22M
Net Income	13.86M	12.23M	4.56M	-481.00K	-8.77M	2.37M
Balance Sheet
Total Assets	252.34M	264.11M	233.88M	203.92M	183.69M	144.28M
Cash, Cash Equivalents and Short-Term Investments	10.75M	21.58M	16.94M	18.26M	14.74M	65.03M
Total Debt	6.67M	6.85M	7.77M	20.38M	26.93M	138.00K
Total Liabilities	128.96M	144.53M	128.31M	106.98M	87.20M	46.35M
Stockholders Equity	123.38M	119.58M	105.57M	96.93M	96.49M	97.93M
Cash Flow
Free Cash Flow	-9.64M	5.36M	18.89M	10.16M	-4.54M	-3.88M
Operating Cash Flow	13.34M	24.32M	28.12M	13.91M	-2.22M	-1.72M
Investing Cash Flow	-22.98M	-19.13M	-15.99M	-3.75M	-57.11M	32.40M
Financing Cash Flow	-1.25M	-521.00K	-13.39M	-6.44M	14.42M	-4.45M

Graham Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 48.70
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GHM, the sentiment is Negative. The current price of 48.7 is below the 20-day moving average (MA) of 51.58, below the 50-day MA of 50.64, and above the 200-day MA of 40.96, indicating a neutral trend. The MACD of -0.65 indicates Positive momentum. The RSI at 44.55 is Neutral, neither overbought nor oversold. The STOCH value of 26.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GHM.

Graham Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LXFR	77 Outperform	$335.35M	13.87	11.89%	4.17%	5.60%	―
OFLX	72 Outperform	$341.49M	20.06	20.68%	4.06%	-4.53%	-11.25%
GHM	70 Outperform	$530.57M	38.31	11.97%	―	14.64%	182.19%
TAYD	70 Neutral	$141.15M	15.36	16.62%	―	3.84%	13.91%
TWIN	67 Neutral	$122.94M	29.82	-1.19%	1.86%	11.49%	-66.66%
PKOH	64 Neutral	$275.09M	7.93	11.16%	2.66%	-2.82%	69.68%
Sector *	63 Neutral	$10.76B	16.24	7.41%	2.07%	2.60%	-16.34%

Graham Corporate Events

Graham Reports Strong Q1 2026 Financial Results

On August 5, 2025, Graham Corporation announced its first quarter fiscal 2026 results, highlighting an 11% increase in revenue to $55.5 million and a 19% rise in gross profit to $14.7 million. The company reported a 56% increase in net income per diluted share to $0.42, driven by strong performance in the Energy & Process markets and significant defense orders, including support for the Virginia Class submarine program. Graham’s strategic investments in automated welding and cryogenic testing facilities are expected to enhance margins and create new revenue opportunities, positioning the company for sustainable growth.

Graham Highlights Strategic Growth at Wells Fargo Conference

On June 12, 2025, Graham Corporation participated in the Wells Fargo 2025 Industrials Conference, presenting its strategic focus on margin expansion and disciplined growth through strategic ROIC projects. The company highlighted its strong position in the defense sector, with significant revenue opportunities from U.S. defense budgets and shipbuilding programs, and a projected $1.7 billion revenue opportunity through 2056 based on strategic platform projections.

Graham Announces CEO Transition Effective June 10, 2025

Graham Corporation reported strong financial results for the fourth quarter and full fiscal year 2025, ending March 31, 2025, with a 21% increase in revenue to $59.3 million and a significant improvement in operating margin from 3.1% to 9.3%. The company also announced a planned management transition effective June 10, 2025, with CEO Daniel J. Thoren transitioning to Executive Chairman and Strategic Advisor, and Matt Malone stepping in as the new CEO.

Graham Updates Executive Incentive and Bonus Plans

On June 2, 2025, Graham Corporation’s Compensation Committee renewed and amended its Annual Long-Term Incentive Award Plan for Senior Executives for fiscal year 2026. The plan includes grants of time-vesting and performance-vesting restricted stock units to named executive officers, with vesting conditions tied to continued employment and specific performance metrics. Additionally, the company amended its Annual Executive Cash Bonus Program, setting target bonus levels based on the attainment of company and personal objectives. The Compensation Committee also approved stock-based grants for non-employee directors.