Graham Corp. (GHM)
NYSE:GHM
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Graham
(NYSE:GHM)
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Rating:74Outperform
Price Target:
$104.00
▲(9.04% Upside)
Action:UpgradedDate:04/16/26
The score is driven primarily by solid fundamentals (strong balance sheet and improved profitability) and constructive technical momentum. Offsetting this are weak recent cash-flow conversion and a stretched valuation (high P/E), while the latest earnings call supports the outlook via raised guidance and a record backlog despite margin and integration risks.
Positive Factors
Very conservative balance sheet and low leverage
Extremely low debt and expanding equity provide durable financial flexibility, allowing Graham to fund capex, acquisitions and working capital without heavy interest burden. This reduces solvency risk, supports investment in growth initiatives and cushions the business through cyclical industrial demand swings.
Negative Factors
Weakened free cash flow / cash conversion
Negative TTM free cash flow signals working-capital strain or heavier investment is temporarily absorbing earnings. Over a multi-month horizon this raises execution risk for funding growth and acquisitions without tapping external capital, and makes margin or backlog setbacks more likely to pressure liquidity or financing needs.
Read all positive and negative factors
Positive Factors
Negative Factors
Very conservative balance sheet and low leverage
Extremely low debt and expanding equity provide durable financial flexibility, allowing Graham to fund capex, acquisitions and working capital without heavy interest burden. This reduces solvency risk, supports investment in growth initiatives and cushions the business through cyclical industrial demand swings.
Read all positive factors
Graham (GHM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.05B
Dividend YieldN/A
Average Volume (3M)129.50K
Price to Earnings (P/E)62.0
Beta (1Y)1.82
Revenue Growth19.01%
EPS Growth61.65%
CountryUS
Employees595
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.25
Shares Outstanding11,072,780
10 Day Avg. Volume148,607
30 Day Avg. Volume129,500
Financial Highlights & Ratios
PEG Ratio0.15
Price to Book (P/B)2.62
Price to Sales (P/S)1.49
P/FCF Ratio58.53
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue4.18
Enterprise Value/Gross Profit17.11
Enterprise Value/Ebitda40.30
Forecast
1Y Price Target
$98.24Price Target Upside3.00% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)1.94
Revenue Forecast (FY)$281.42M
Graham Business Overview & Revenue Model
Company Description
Graham Corporation, together with its subsidiaries, designs and manufactures fluid, power, heat transfer, and vacuum equipment for chemical and petrochemical processing, defense, space, petroleum refining, cryogenic, energy, and other industries. ...
How the Company Makes Money
Graham makes money primarily by selling engineered-to-order equipment and systems to industrial and government/defense customers. Revenue is generated from (1) manufacturing and delivering custom or semi-custom equipment (often produced under cust...
Graham Earnings Call Summary
Earnings Call Date:Feb 06, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jun 04, 2026
Earnings Call Sentiment Positive
Overall the call was positive: the company reported strong top-line growth (+21% revenue), significant profitability improvement (adjusted EBITDA +50%), a record backlog (+34% to $515.6M), raised full-year guidance, completed strategic acquisitions (Xdot and FlackTek) and continued capacity/test investments. Offsetting items include gross margin pressure (down 100 bps) from mix and lumpy material receipts, tariff impacts (~$1.0M–$1.5M), modest softness in large Energy & Process CapEx, and acquisition-related costs and contingent earn-outs. On balance the operational momentum, cash flow, liquidity and strategic M&A meaningfully outweigh the near-term margin and macro headwinds.Positive Updates
Strong Revenue Growth
Q3 revenue increased 21% year-over-year to $56.7 million, driven by timing of defense project milestones, contributions from new programs and continued growth across existing platforms.
Negative Updates
Gross Margin Pressure
Gross profit rose 15% to $13.5 million, but gross margin declined 100 basis points year-over-year to 23.8% due to an unfavorable sales mix, higher material receipts (lower-margin content) and the absence of a $255k prior-year grant benefit.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Revenue Growth
Q3 revenue increased 21% year-over-year to $56.7 million, driven by timing of defense project milestones, contributions from new programs and continued growth across existing platforms.
Read all positive updates
Company Guidance
Management raised full‑year fiscal 2026 guidance to revenue of $233–239 million and adjusted EBITDA of $24–28 million (midpoint increases of ~12% and ~16%, respectively), inclusive of the Xdot and FlackTek acquisitions (FlackTek base purchase $35M — 85% cash/15% equity — plus up to $25M earn‑out, ~12x projected 2026 adjusted EBITDA; FlackTek ~ $30M calendar 2026 revenue). In Q3 they reported revenue of $56.7M (+21% YoY), adjusted EBITDA of $6.0M (10.7% margin) and year‑to‑date adjusted EBITDA margin of 10.8% (up 100 bps); orders were $71.7M in the quarter with a book‑to‑bill of 1.3x (YTD 1.6x) and a record backlog of $515.6M (+34% YoY), ~85% defense, with ~35–40% of backlog expected to convert to revenue in the next 12 months and another ~25–30% in 1–2 years. Financial flexibility remains solid with $22.3M cash, $4.8M operating cash flow in the quarter, $2.8M capex, an $80M revolving credit facility (only $20M outstanding post‑acquisition) and an estimated tariff impact narrowed to $1–1.5M for the year; management reiterated long‑term targets of 8–10% organic growth and low‑ to mid‑teen adjusted EBITDA margins by FY2027.Graham Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
88
Very Positive
Cash Flow
54
Neutral
| Breakdown | TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 237.56M | 209.90M | 185.53M | 157.12M | 122.81M | 97.49M |
| Gross Profit | 58.07M | 52.86M | 40.59M | 25.41M | 9.13M | 20.47M |
| EBITDA | 24.65M | 21.12M | 12.35M | 7.24M | -5.22M | 5.22M |
| Net Income | 14.93M | 12.23M | 4.56M | 367.00K | -8.77M | 2.37M |
Balance Sheet | ||||||
| Total Assets | 292.93M | 264.11M | 233.88M | 203.92M | 183.69M | 144.28M |
| Cash, Cash Equivalents and Short-Term Investments | 22.25M | 21.58M | 16.94M | 18.26M | 14.74M | 65.03M |
| Total Debt | 10.60M | 6.85M | 7.77M | 20.38M | 26.93M | 138.00K |
| Total Liabilities | 161.62M | 144.53M | 128.31M | 106.98M | 87.20M | 46.35M |
| Stockholders Equity | 131.31M | 119.58M | 105.57M | 96.93M | 96.49M | 97.93M |
Cash Flow | ||||||
| Free Cash Flow | -6.11M | 5.36M | 18.89M | 10.16M | -4.54M | -3.88M |
| Operating Cash Flow | 12.53M | 24.32M | 28.12M | 13.91M | -2.22M | -1.72M |
| Investing Cash Flow | -19.38M | -19.13M | -15.99M | -3.75M | -57.11M | 32.40M |
| Financing Cash Flow | -1.09M | -521.00K | -13.39M | -6.44M | 14.42M | -4.45M |
Graham Technical Analysis
Positive
95.38
Price Trends
83.89
Positive
75.14
Positive
64.69
Positive
Market Momentum
3.24
Negative
66.13
Neutral
81.47
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GHM, the sentiment is Positive. The current price of 95.38 is above the 20-day moving average (MA) of 85.65, above the 50-day MA of 83.89, and above the 200-day MA of 64.69, indicating a bullish trend. The MACD of 3.24 indicates Negative momentum. The RSI at 66.13 is Neutral, neither overbought nor oversold. The STOCH value of 81.47 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GHM.
Graham Risk Analysis
Graham disclosed 48 risk factors in its most recent earnings report. Graham reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Graham Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $1.99B | 16.64 | 11.42% | ― | 6.15% | 28.45% | |
74 Outperform | $1.05B | 62.02 | 11.90% | ― | 19.01% | 61.65% | |
69 Neutral | $406.45M | 22.06 | 12.79% | 3.70% | -7.01% | -72.56% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $416.83M | 12.14 | 6.44% | 2.32% | -3.45% | -37.35% | |
55 Neutral | $2.13B | -18.51 | 14.80% | ― | -11.44% | 38.81% |
* Industrials Sector Average
GHM
Graham
94.80
61.68
186.23%
BW
Babcock & Wilcox Company
14.07
13.61
2932.33%
PKOH
Park-Ohio Holdings
28.54
8.40
41.73%
THR
Thermon Group Holdings
60.52
32.86
118.80%
LXFR
Luxfer
15.35
4.47
41.12%
Graham Corporate Events
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Graham Raises $50 Million Through Institutional Equity Investment
Positive
Apr 15, 2026
On April 14, 2026, Graham Corporation agreed to a private investment in public equity with accounts advised by T. Rowe Price Investment Management, under which the investors will buy 599,808 common shares, or about 5% of the company, at $83.36 per...
Executive/Board Changes
Graham Boosts Executive Pay and Incentive Compensation Structure
Positive
Mar 30, 2026
On March 24, 2026, Graham Corporation’s Compensation Committee approved increases to the annual base salaries of President and CEO Matthew J. Malone and Vice President – Finance, CFO and Chief Accounting Officer Christopher J. Thome, s...
Business Operations and StrategyExecutive/Board Changes
Graham Announces Leadership Transitions and Executive Appointments
Positive
Feb 17, 2026
On February 17, 2026, Graham Corporation announced a planned leadership transition at its Graham Manufacturing business, where long-time Vice President and General Manager Alan Smith will retire in April 2026 and move into a consulting and advisor...
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Graham Delivers Strong Q3 Results and Raises Guidance
Positive
Feb 6, 2026
On February 6, 2026, Graham Corporation reported strong third-quarter fiscal 2026 results, with revenue up 21% year over year to $56.7 million and gross profit rising 15% to $13.5 million, while net income per diluted share increased 79% to $0.25 ...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Graham Expands Platform with FlackTek Advanced Mixing Acquisition
Positive
Jan 26, 2026
On January 23, 2026, Graham Corporation amended its credit agreement with Wells Fargo, increasing its revolving credit facility from $50 million to $80 million and allowing up to $5 million in certain credit-related obligations for its Graham Indi...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.