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Graham
(NYSE:GHM)
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Rating:71Outperform
Price Target:
$107.00
▲(2.95% Upside)
Action:Upgraded
Date:08/07/26
The score is driven primarily by strong fundamentals (profitability recovery plus a low-leverage balance sheet) and a constructive earnings outlook supported by record backlog and reiterated FY2027 guidance. Offsetting factors are weak recent cash flow/negative free cash flow, a rich valuation (high P/E with no dividend yield provided), and only neutral technical momentum (negative MACD and trading below the 50-day average).
Positive Factors
Record backlog and order coverage
Record backlog and book-to-bill above one provide multi-period revenue visibility, with management expecting 35%–40% of backlog to convert within 12 months. This supports planning, capacity utilization and sustained growth, subject to execution.
Negative Factors
Weak recent cash conversion
Low operating cash flow and negative free cash flow indicate that earnings are not currently converting efficiently into liquidity. Working-capital demands or investment spending could constrain internally funded growth if the shortfall persists across upcoming reporting periods.
Read all positive and negative factors
Positive Factors
Negative Factors
Record backlog and order coverage
Record backlog and book-to-bill above one provide multi-period revenue visibility, with management expecting 35%–40% of backlog to convert within 12 months. This supports planning, capacity utilization and sustained growth, subject to execution.
Read all positive factors
Graham (GHM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.14B
Dividend YieldN/A
Average Volume (3M)271.91K
Price to Earnings (P/E)91.7
Beta (1Y)1.78
Revenue Growth21.22%
EPS Growth-16.93%
CountryUS
Employees732
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.06
Shares Outstanding11,737,033
10 Day Avg. Volume287,869
30 Day Avg. Volume271,910
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$130.75Price Target Upside25.81% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)1.59
Revenue Forecast (FY)$291.20M
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:Aug 06, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Nov 09, 2026
Earnings Call Sentiment Positive
The call conveyed strong execution and momentum: record revenue, double-digit growth in high-potential end markets (Defense and Space), record backlog and robust order activity, successful integration of FlackTek, and a strengthened balance sheet. Headwinds are manageable and largely related to sales mix (higher Defense content) leading to a year-over-year gross margin decline, near-term operating cash timing effects, and incremental SG&A related to strategic investments. Management maintained full-year guidance and reiterated a multi-year growth and margin expansion framework, indicating confidence in the outlook.Positive Updates
Record Quarterly Revenue
Revenue of $71.3 million, a record for Q1 and an increase of 29% year-over-year (17% organic growth), driven by broad-based strength across Defense, Space and contributions from FlackTek.
Negative Updates
Gross Margin Decline Year-over-Year
Gross profit rose 21% to $17.8 million, but gross margin decreased to 25.0% from 26.5% a year earlier (down ~150 basis points), primarily due to sales mix (higher Defense revenue and material receipts) despite a 230 basis point sequential improvement versus Q4 FY26.
Read all updates
Q1-2027 Updates
Positive
Negative
Record Quarterly Revenue
Revenue of $71.3 million, a record for Q1 and an increase of 29% year-over-year (17% organic growth), driven by broad-based strength across Defense, Space and contributions from FlackTek.
Read all positive updates
Company Guidance
Guidance was reiterated unchanged: fiscal 2027 revenue is expected to be $285–$295 million, gross margin 24.5%–25.5%, SG&A 16.5%–17.5% of sales (including ~ $2.5M of incremental investments), adjusted EBITDA $35–$40 million (≈44% growth at the midpoint), and capital expenditures $18–$22 million; the outlook embeds $5.5–$6.5 million of equity‑based compensation/acquisition & integration/ERP conversion costs, management expects ~35%–40% of the $557M backlog to convert to revenue in the next 12 months and another ~20%–25% the following year, and the long‑term financial framework targets ~8%–10% organic revenue growth annually with adjusted EBITDA margins expanding to 14%–16% by FY2029.Graham Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
86
Very Positive
Cash Flow
52
Neutral
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 261.15M | 245.29M | 209.90M | 185.53M | 157.12M | 122.81M |
| Gross Profit | 60.83M | 57.75M | 52.86M | 40.59M | 25.41M | 9.13M |
| EBITDA | 23.02M | 22.60M | 20.76M | 11.25M | 7.62M | -5.22M |
| Net Income | 11.82M | 12.50M | 12.23M | 4.56M | 367.00K | -8.77M |
Balance Sheet | ||||||
| Total Assets | 363.96M | 323.62M | 264.11M | 233.88M | 203.92M | 183.69M |
| Cash, Cash Equivalents and Short-Term Investments | 26.95M | 6.58M | 21.58M | 16.94M | 18.26M | 14.74M |
| Total Debt | 6.79M | 18.39M | 6.85M | 7.77M | 20.38M | 26.93M |
| Total Liabilities | 171.76M | 183.30M | 144.53M | 128.31M | 106.98M | 87.20M |
| Stockholders Equity | 192.20M | 140.31M | 119.58M | 105.57M | 96.93M | 96.49M |
Cash Flow | ||||||
| Free Cash Flow | -6.12M | -121.00K | 5.36M | 18.89M | 10.16M | -4.54M |
| Operating Cash Flow | 5.54M | 15.93M | 24.32M | 28.12M | 13.91M | -2.22M |
| Investing Cash Flow | -37.10M | -43.06M | -19.13M | -15.99M | -3.75M | -57.11M |
| Financing Cash Flow | 47.61M | 11.96M | -521.00K | -13.39M | -6.44M | 14.42M |
Graham Technical Analysis
Negative
103.93
Price Trends
107.97
Negative
102.00
Negative
86.87
Positive
Market Momentum
-1.59
Positive
36.79
Neutral
11.31
Positive
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 103.93 is below the 20-day moving average (MA) of 104.11, below the 50-day MA of 107.97, and above the 200-day MA of 86.87, indicating a neutral trend. The MACD of -1.59 indicates Positive momentum. The RSI at 36.79 is Neutral, neither overbought nor oversold. The STOCH value of 11.31 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GHM.
Graham Risk Analysis
Graham disclosed 52 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $1.14B | 91.66 | 7.99% | ― | 21.22% | -16.93% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
58 Neutral | $649.44M | 22.75 | 7.15% | 1.28% | 2.68% | -20.08% | |
58 Neutral | $458.12M | 57.07 | 3.54% | 3.05% | -10.05% | -67.01% | |
48 Neutral | $1.15B | -8.84 | 77.75% | ― | 40.37% | 55.59% |
* Industrials Sector Average
GHM
Graham
93.20
42.82
84.99%
BW
Babcock & Wilcox Company
7.83
6.12
357.89%
PKOH
Park-Ohio Holdings
45.08
25.84
134.35%
LXFR
Luxfer
17.15
4.15
31.89%
Graham Corporate Events
Business Operations and StrategyFinancial DisclosuresPrivate Placements and Financing
Graham Posts Record Sales and Backlog in Q1
Positive
Aug 6, 2026
On August 6, 2026, Graham Corporation reported first quarter fiscal 2027 results showing record net sales of $71.3 million, up 29% year over year, driven by broad-based growth and contributions from the FlackTek acquisition. Revenue gains were led...
Business Operations and StrategyFinancial Disclosures
Graham Highlights Strategic Growth Priorities at 2026 Investor Day
Positive
Jun 18, 2026
On June 18, 2026, Graham Corporation hosted its 2026 Investor Day and posted the accompanying presentation slides to the investor relations section of its website. The event agenda highlighted a customer panel, detailed company and product overvie...
Business Operations and StrategyExecutive/Board Changes
Graham Restructures Leadership, Appoints New Board Chairman
Positive
Jun 17, 2026
On June 15, 2026, Graham Corporation announced that Executive Chairman and director Daniel J. Thoren resigned from those roles and entered a transition and retirement agreement that moves him into a Strategic Advisor position through June 15, 2027...
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...
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.