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Powell Industries (POWL)
NASDAQ:POWL
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Powell Industries
(NASDAQ:POWL)
70Outperform
Powell Industries (POWL) vs. S&P 500 (SPY)
Market Cap
$2.05B
Dividend Yield0.63%
Average Volume (3M)468.58K
Price to Earnings (P/E)12.9
Beta (1Y)1.76
Revenue Growth38.27%
EPS Growth105.52%
CountryUS
Employees2,748
SectorIndustrials
Sector Strength66
IndustryElectrical Equipment & Parts
Share Statistics
EPS (TTM)13.17
Shares Outstanding12,064,723
10 Day Avg. Volume340,958
30 Day Avg. Volume468,577
Financial Highlights & Ratios
PEG Ratio0.12
Price to Book (P/B)N/A
Price to Sales (P/S)2.10
Price to Cash Flow (P/CF)15.00
P/FCF Ratio15.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$312.00Price Target Upside83.67% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Powell Industries Business Overview & Revenue Model
Company DescriptionPowell Industries (POWL) is a leading provider in the electrical energy sector, specializing in the design, manufacturing, and servicing of custom-engineered equipment and systems for the distribution, control, and monitoring of electrical energy. The company primarily serves the oil and gas, petrochemical, utility, and other heavy industrial markets. Powell Industries is known for its expertise in offering solutions that enhance the reliability and safety of electrical power systems.
How the Company Makes MoneyPowell Industries generates revenue through the sale of its custom-engineered electrical equipment and systems. The company’s revenue streams include the design and manufacturing of switchgear and related equipment, as well as providing aftermarket services such as maintenance, repair, and retrofitting. By serving industries that require robust and reliable electrical systems, Powell benefits from long-term contracts and repeat business opportunities. Additionally, the company may engage in strategic partnerships or collaborations with other firms to enhance its product offerings and expand its market reach.
Powell Industries Financial Statement Overview
Summary
Powell Industries exhibits a strong financial position with significant revenue growth and healthy profit margins. The company benefits from low leverage and a solid equity base, supporting its financial stability. However, attention should be paid to maintaining cash flow levels and ensuring sustainable revenue growth to avoid potential future risks.Income Statement
Powell Industries has shown strong revenue growth, with a TTM revenue of $1.06 billion compared to $699.3 million the previous year. The company has maintained a healthy gross profit margin of approximately 26.8% and a net profit margin of about 15.1% in the TTM period. These margins indicate robust profitability, supported by a consistent increase in EBIT and EBITDA margins. However, the significant jump in revenue from the prior year may not be sustainable at this pace.85
Very Positive
Balance Sheet
The balance sheet of Powell Industries is strong, with a low debt-to-equity ratio of approximately 0.0027, indicating low leverage and financial stability. The equity ratio stands at 54.4%, reflecting a solid equity base. A return on equity (ROE) of around 32.3% demonstrates effective use of equity to generate profits. The main concern could be the relatively low total asset growth compared to revenue growth.78
Positive
Cash Flow
Powell Industries has shown positive free cash flow growth, with a TTM increase to $48.9 million. The operating cash flow to net income ratio is 0.39, suggesting room for improvement in converting net income to cash. The free cash flow to net income ratio is 0.30, indicating that a significant portion of earnings is being converted into free cash flow. While the cash flow statements reflect positive trends, the operating cash flow has decreased compared to the previous year, which might need attention.72
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.06B | 1.01B | 699.31M | 532.58M | 470.56M | 518.50M | Gross Profit |
| 284.42M | 273.09M | 147.55M | 85.02M | 75.06M | 94.58M | EBIT |
| 188.47M | 178.77M | 62.52M | -5.09M | 1.02M | 19.07M | EBITDA |
| 193.69M | 178.77M | 71.13M | 7.22M | 1.02M | 31.14M | Net Income Common Stockholders |
| 160.53M | 149.85M | 54.52M | 13.74M | 631.00K | 16.66M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 113.60M | 358.39M | 279.01M | 116.51M | 133.98M | 178.92M | Total Assets |
| 413.63M | 928.18M | 752.24M | 493.38M | 436.19M | 472.28M | Total Debt |
| 22.39M | 1.22M | 1.44M | 2.32M | 4.23M | 6.59M | Net Debt |
| -91.21M | -314.12M | -244.44M | -99.63M | -110.09M | -153.63M | Total Liabilities |
| 145.31M | 445.11M | 407.22M | 196.17M | 134.97M | 165.65M | Stockholders Equity |
| 267.73M | 483.07M | 345.03M | 297.21M | 301.22M | 306.63M |
| Cash Flow | Free Cash Flow | ||||
| 48.90M | 96.68M | 174.73M | -6.03M | -33.35M | 67.26M | Operating Cash Flow |
| 61.84M | 108.66M | 182.55M | -3.58M | -30.46M | 72.39M | Investing Cash Flow |
| -29.88M | -21.87M | -26.57M | 6.46M | -2.46M | -17.54M | Financing Cash Flow |
| -26.56M | -19.25M | -13.06M | -13.31M | -13.17M | -13.10M |
Powell Industries Technical Analysis
Negative
169.87
Price Trends
196.19
Negative
231.27
Negative
209.96
Negative
Market Momentum
-3.42
Negative
44.84
Neutral
25.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For POWL, the sentiment is Negative. The current price of 169.87 is below the 20-day moving average (MA) of 176.64, below the 50-day MA of 196.19, and below the 200-day MA of 209.96, indicating a bearish trend. The MACD of -3.42 indicates Negative momentum. The RSI at 44.84 is Neutral, neither overbought nor oversold. The STOCH value of 25.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for POWL.
Powell Industries Risk Analysis
Powell Industries disclosed 33 risk factors in its most recent earnings report. Powell Industries reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Powell Industries Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $17.07B | 17.45 | 37.25% | 0.28% | 15.76% | 61.64% | |
72 Outperform | $9.41B | 59.74 | 5.80% | ― | 2.56% | ― | |
72 Outperform | $38.22B | 42.77 | 13.32% | 0.15% | 13.36% | 20.00% | |
70 Outperform | $2.05B | 12.90 | 37.22% | 0.63% | 38.27% | 105.52% | |
62 Neutral | $8.08B | 13.63 | 3.82% | 3.13% | 3.58% | -14.35% | |
58 Neutral | $1.84B | 64.63 | 4.84% | ― | -7.73% | -65.81% | |
50 Neutral | $4.74B | ― | -12.09% | 33.44% | -14.71% | 47.48% |
* Industrials Sector Average
Performance Comparison
POWL
Powell Industries
169.87
39.20
30.00%
EME
EMCOR Group
354.54
-1.72
-0.48%
IEP
Icahn Enterprises
8.97
-4.84
-35.05%
MTZ
MasTec
112.00
20.02
21.77%
MYRG
MYR Group
110.57
-62.76
-36.21%
PWR
Quanta Services
252.04
-5.81
-2.25%
Powell Industries Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -30.53% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong start for Powell Industries in fiscal 2025, highlighted by significant revenue and order growth across major sectors, increased net income, and substantial backlog. While gross margin remained flat and faced seasonal challenges, the overall financial position and strategic initiatives indicate a positive outlook for the company.Highlights
Strong Revenue and Order Growth
Powell Industries reported a revenue growth of 24% and new order growth of 36% compared to the prior year. Revenue increases were seen in all major market sectors.
Significant Growth in Key Sectors
Revenue from the electric utility and commercial sectors grew by 26% and 80% respectively, with a notable LNG project award along the U.S. Gulf Coast.
Increased Net Income and Backlog
Net income rose by 44% to $35 million, and Powell's backlog increased by $48 million compared to the prior year, providing revenue visibility into fiscal 2027.
Expansion and Capacity Initiatives
Progress on capacity initiatives at the Houston manufacturing facility and the opening of an engineering satellite office in Houston.
Positive Cash Flow and Dividend Increase
Generated $37 million in operating cash flow, with a $0.01 per share increase to the common stock dividend, marking the third consecutive year of this action.
Lowlights
Flat Gross Margin
Gross margin was roughly unchanged from the prior year and lower sequentially due to seasonal challenges and project closeouts in the previous quarter.
Challenges in Seasonal Comparisons
First fiscal quarter is historically the softest due to holiday season and under-recovery, impacting sequential margin comparisons.
Company Guidance
During Powell Industries' fiscal first quarter 2025 earnings call, the company provided robust guidance, highlighting several key metrics. Powell reported a 24% revenue growth and a 36% increase in new orders compared to the prior year, with an order total of $269 million, driven by a large domestic LNG project. Revenue from the oil and gas sector grew by 14%, while the electric utility and commercial sectors saw increases of 26% and 80%, respectively. The company achieved a net income of $35 million, or $2.86 per diluted share, marking a 44% rise from the previous year. The backlog reached $1.3 billion, up $48 million year-over-year. Powell is executing capacity initiatives, including expansions at its Houston facility, and increased its R&D spending by 26% to $2.5 million. With a strong financial position and ongoing strategic efforts, the company anticipates continued solid performance in fiscal 2025, supported by favorable market fundamentals, particularly in the oil and gas and utility sectors.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.