Graham Corporation (GHM)
NYSE:GHM
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Graham
(NYSE:GHM)
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Rating:63Neutral
Price Target:
$102.00
▲(6.94% Upside)
Action:Reiterated
Date:06/09/26
The score is driven by improved fundamentals and a strong balance sheet, plus constructive FY2027 guidance backed by record orders/backlog. Offsetting this are weak recent cash conversion (slightly negative TTM free cash flow) and an expensive valuation (high P/E), while technicals suggest consolidation rather than strong near-term momentum.
Positive Factors
Record backlog and orders
A $533M backlog with a 1.5x book-to-bill and management expecting ~35–40% to convert in 12 months gives durable revenue visibility. Large, multi-quarter backlog supports steady production planning, capacity utilization, and near-term top-line growth that underpins longer-term margin and cash-flow improvement.
Negative Factors
Weak cash conversion / marginal FCF
Free cash flow turned slightly negative on a TTM basis, and cash conversion no longer covers net income. Persistent working‑capital timing and higher reinvestment needs limit cash available for buybacks or dividends and raise reliance on external capital, constraining optionality over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Record backlog and orders
A $533M backlog with a 1.5x book-to-bill and management expecting ~35–40% to convert in 12 months gives durable revenue visibility. Large, multi-quarter backlog supports steady production planning, capacity utilization, and near-term top-line growth that underpins longer-term margin and cash-flow improvement.
Read all positive factors
Graham (GHM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.21B
Dividend YieldN/A
Average Volume (3M)258.79K
Price to Earnings (P/E)91.3
Beta (1Y)1.74
Revenue Growth16.86%
EPS Growth1.38%
CountryUS
Employees595
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.14
Shares Outstanding11,691,140
10 Day Avg. Volume303,885
30 Day Avg. Volume258,793
Financial Highlights & Ratios
PEG Ratio38.85
Price to Book (P/B)6.18
Price to Sales (P/S)3.54
P/FCF Ratio-7.17K
Enterprise Value/Market Cap0.90
Enterprise Value/Revenue4.47
Enterprise Value/Gross Profit19.00
Enterprise Value/Ebitda74.09
Forecast
1Y Price Target
$112.00Price Target Upside17.43% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)1.91
Revenue Forecast (FY)$281.42M
Graham Business Overview & Revenue Model
Company Description
Graham Corporation, founded in 1936 and based in Batavia, New York, is an engineering and manufacturing company that, along with its subsidiaries, specializes in creating advanced fluid, power, heat transfer, and vacuum equipment. This specialized...
How the Company Makes Money
Graham makes money primarily by selling engineered-to-order and engineered-to-application equipment and components, along with related aftermarket and service work. Revenue is generated from (1) custom-designed vacuum and heat-transfer equipment (...
Graham Earnings Call Summary
Earnings Call Date:Jun 08, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Positive
The call presented strong commercial momentum and several record metrics (revenue, orders, backlog) alongside meaningful strategic investments and acquisitions that expand capabilities and liquidity. Management provided confident FY2027 guidance with substantial top-line and EBITDA growth expected. Offsetting these positives were margin pressure in the quarter due to product mix, one-time acquisition accounting impacts, higher SG&A from integration/investment activity, and lumpy cash flow/working capital dynamics. Overall, the positive operational and financial momentum and strong backlog outweigh near-term margin and integration headwinds.Positive Updates
Record Annual Revenue and Growth
Fiscal 2026 revenue reached a record $245.0M, up 17% year-over-year. Management cites disciplined execution and diversified end markets as drivers of the increase.
Negative Updates
Quarterly Margin Compression
Q4 gross margin declined to 22.7% from 27.0% in the prior-year quarter (down ~430 basis points year-over-year for the quarter). Full-year gross margin fell to 23.5% from 25.2% (down ~170 bps), driven by a higher mix of lower-margin defense revenue, increased material receipts, incremental tariffs and the absence of a prior-year grant benefit.
Read all updates
Q4-2026 Updates
Positive
Negative
Record Annual Revenue and Growth
Fiscal 2026 revenue reached a record $245.0M, up 17% year-over-year. Management cites disciplined execution and diversified end markets as drivers of the increase.
Read all positive updates
Company Guidance
Graham guided fiscal 2027 to revenue of $285–$295 million (about 18% growth at the midpoint) and adjusted EBITDA of $35–$40 million (≈44% growth at the midpoint versus FY26’s $26M), with gross margin targeted at 24.5–25.5% and SG&A expected to be 16.5–17.5% of sales (which includes roughly $2.5M of incremental people/technology/commercialization investments and $4–$5M of equity‑based comp, acquisition/integration and ERP conversion costs); they expect a fiscal 2027 effective tax rate of 18–20% and capital expenditures of $18–$22M (≈7% of revenue) including a new 30,000 sq ft Arvada facility, while noting FlackTek’s current ~10% adjusted EBITDA margin should improve as revenue scales. Guidance is supported by a record $533M backlog (up 29% YoY) with ~35–40% expected to convert to revenue in the next 12 months, record FY26 orders of $359M and a 1.5x book‑to‑bill, and a strong liquidity position (over $100M available after a $50M strategic investment from T. Rowe Price and use of the $80M revolver); prior‑year investments were made with a >20% ROIC hurdle and are expected to drive operating leverage and margin expansion as volume grows.Graham Financial Statement Overview
Summary
Income Statement
73
Positive
Balance Sheet
82
Very Positive
Cash Flow
46
Neutral
| Breakdown | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 245.29M | 209.90M | 185.53M | 157.12M | 122.81M |
| Gross Profit | 57.75M | 52.86M | 40.59M | 25.41M | 9.13M |
| EBITDA | 14.76M | 20.76M | 11.25M | 7.62M | -5.22M |
| Net Income | 12.50M | 12.23M | 4.56M | 367.00K | -8.77M |
Balance Sheet | |||||
| Total Assets | 323.62M | 264.11M | 233.88M | 203.92M | 183.69M |
| Cash, Cash Equivalents and Short-Term Investments | 6.58M | 21.58M | 16.94M | 18.26M | 14.74M |
| Total Debt | 18.39M | 6.85M | 7.77M | 20.38M | 26.93M |
| Total Liabilities | 183.30M | 144.53M | 128.31M | 106.98M | 87.20M |
| Stockholders Equity | 140.31M | 119.58M | 105.57M | 96.93M | 96.49M |
Cash Flow | |||||
| Free Cash Flow | -121.00K | 5.36M | 18.89M | 10.16M | -4.54M |
| Operating Cash Flow | 15.93M | 24.32M | 28.12M | 13.91M | -2.22M |
| Investing Cash Flow | -43.06M | -19.13M | -15.99M | -3.75M | -57.11M |
| Financing Cash Flow | 11.96M | -521.00K | -13.39M | -6.44M | 14.42M |
Graham Technical Analysis
Positive
95.38
Price Trends
96.03
Positive
88.15
Positive
73.69
Positive
Market Momentum
1.86
Positive
55.69
Neutral
58.99
Neutral
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 below the 20-day moving average (MA) of 99.63, below the 50-day MA of 96.03, and above the 200-day MA of 73.69, indicating a bullish trend. The MACD of 1.86 indicates Positive momentum. The RSI at 55.69 is Neutral, neither overbought nor oversold. The STOCH value of 58.99 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
64 Neutral | $488.28M | 83.00 | 2.52% | 3.70% | -7.01% | -72.56% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $1.21B | 91.32 | 11.90% | ― | 16.86% | 1.38% | |
59 Neutral | $500.05M | 19.56 | 6.50% | 2.32% | -1.78% | -35.06% | |
51 Neutral | $2.39B | -16.69 | 61.01% | ― | -3.26% | 18.16% |
* Industrials Sector Average
GHM
Graham
103.89
56.56
119.50%
BW
Babcock & Wilcox Company
16.08
15.03
1431.43%
PKOH
Park-Ohio Holdings
34.73
17.58
102.54%
LXFR
Luxfer
18.08
6.87
61.23%
Graham Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Graham Reports Record Revenue, Strong Orders and Backlog
Positive
Jun 8, 2026
On June 8, 2026, Graham Corporation reported results for the fourth quarter and fiscal year ended March 31, 2026, highlighting record quarterly revenue of $67.1 million and record full-year revenue of $245.3 million, up 13% and 17% respectively, a...
Executive/Board Changes
Graham Updates Executive and Director Incentive Compensation Programs
Neutral
Jun 5, 2026
On June 1, 2026, Graham Corporation’s board compensation committee renewed and amended its fiscal 2027 long-term incentive award plan for senior executives, granting a mix of time-vesting and performance-vesting restricted stock units that a...
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...
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.