Power Solutions (PSIX) AI Stock Analysis

• Market Cap: $1.71B
• Dividend Yield: N/A
• Average Volume (3M): 366.71K
• Price to Earnings (P/E): 13.9
• Beta (1Y): 2.95
• Revenue Growth: 54.78%
• EPS Growth: 122.61%
• Country: US
• Employees: 700
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 1.20
• Shares Outstanding: 23,040,930
• 10 Day Avg. Volume: 317,884
• 30 Day Avg. Volume: 366,709
• PEG Ratio: 0.06
• Price to Book (P/B): 10.48
• Price to Sales (P/S): 1.44
• P/FCF Ratio: 11.82
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $101.51
• Price Target Upside: 37.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 5.78
• Revenue Forecast (FY): $842.64M

• Rating: 65 Neutral
• Price Target: $78.00 ▲(5.39% Upside)

Power Solutions International's overall stock score is driven by strong corporate events and a reasonable valuation, offset by challenges in financial performance and technical analysis. The record Q3 results and strategic focus on high-growth sectors are positive, but the bearish technical indicators and cash flow concerns warrant caution.

Positive Factors

High profit margins

Sustained high gross (39.5%) and net (25.7%) margins plus healthy EBIT/EBITDA margins provide durable cash generation and pricing power in competitive energy markets. These margins support reinvestment, R&D, and buffer against cyclical downturns in deployment cycles.

Record Q3 sales and capacity expansion

A 62% YoY sales surge in Q3 and expanded manufacturing capacity tied to strong data center demand represent structural revenue drivers. Higher scale in core power systems and focus on data centers and oil & gas can create durable backlog, improved unit economics and long-term customer relationships.

Improved leverage management

Debt-to-equity improving to 0.95 indicates materially better leverage management, lowering refinancing and liquidity risk. This strengthens capacity to fund capex for manufacturing expansion and R&D without disproportionately diluting equity or relying on short-term funding.

Negative Factors

Declining free cash flow and weak cash conversion

Free cash flow fell 16.7% TTM and operating cash flow covers only 44% of net income, signaling weak cash conversion. Persistent low cash conversion limits ability to fund capex, service debt, or pursue M&A without external financing, constraining long-term financial flexibility.

Slowing revenue growth rate

Revenue growth rate declined by 1.7% TTM despite strong prior gains, indicating potential softening or cyclical volatility. Slowing top-line momentum can constrain margin expansion and returns on recent capacity investments, making sustained growth less certain over the next several quarters.

Extremely high ROE suggests volatility

ROE at 108.3% is unusually high and flagged as possibly reflecting one-time gains or a depressed equity base. Such magnitudes raise concerns about earnings quality and sustainability; a reversion would materially reduce reported profitability and investor confidence over time.

Power Solutions Business Overview & Revenue Model

Company Description

Power Solutions International, Inc. designs, engineers, manufactures, markets, and sells engines and power systems in the United States, North America, the Pacific Rim, Europe, and internationally. The company offers alternative-fueled power systems for original equipment manufacturers of off-highway industrial equipment and on-road vehicles; and large custom-engineered integrated electrical power generation systems. It also provides basic engine blocks integrated with fuel system parts, as well as complete packaged power systems, including combined front accessory drives, cooling systems, electronic systems, air intake systems, fuel systems, housings, power takeoff systems, exhaust systems, hydraulic systems, enclosures, brackets, hoses, tubes, packaging, telematics, and other assembled components. In addition, the company offers compression and spark-ignited internal combustion engines that run on various fuels, such as natural gas, propane, gasoline, diesel, and biofuels in the energy, industrial, and transportation markets. Further, it provides standby and prime power generation, demand response, microgrid, renewable energy resiliency, arbor equipment, and combined heat and power; forklifts, wood chippers, stump grinders, sweepers/industrial scrubbers, aerial lift platforms/scissor lifts, irrigation pumps, oil and gas compression, oil lifts, off road utility vehicles, ground support equipment, ice resurfacing equipment, and pump jacks; and light and medium duty vocational trucks and vans, school and transit buses, and terminal and utility tractors. The company has a strategic collaboration agreement with Weichai Power Co., Ltd. Power Solutions International, Inc. was founded in 1985 and is headquartered in Wood Dale, Illinois.

How the Company Makes Money

Power Solutions generates revenue through multiple key streams. Primarily, the company earns income from the sale of its proprietary energy storage systems and related hardware, which are designed to optimize energy usage for customers. Additionally, PSIX offers installation and maintenance services for its products, further contributing to its earnings. The company also engages in partnerships with local governments and utility companies to develop smart grid solutions, which can provide significant funding and collaborative revenue opportunities. Moreover, PSIX invests in research and development to innovate new technologies, which can lead to licensing agreements and collaborations that enhance its revenue potential in the evolving energy market.

Power Solutions Financial Statement Overview

Summary

Power Solutions shows strong profitability and improved leverage management, but faces challenges in revenue growth and cash flow generation. The company's financial health is stable, with efficient operations and a focus on improving its balance sheet. However, the decline in free cash flow and revenue growth rate are areas that require attention to ensure sustainable growth.

Income Statement

Power Solutions has demonstrated strong profitability with a TTM net profit margin of 25.7% and a gross profit margin of 39.5%. However, the revenue growth rate has declined by 1.7% in the TTM period, indicating potential challenges in maintaining sales momentum. The EBIT and EBITDA margins are healthy, showing efficient operational management.

Balance Sheet

The company's debt-to-equity ratio has improved significantly to 0.95 in the TTM period, indicating better leverage management compared to previous years. However, the return on equity is extremely high at 108.3%, which may suggest volatility or one-time gains. The equity ratio is not provided, but the overall improvement in leverage is a positive sign.

Cash Flow

Free cash flow has decreased by 16.7% in the TTM period, which is a concern. The operating cash flow to net income ratio is 0.44, indicating that cash generation from operations is not fully covering net income. The free cash flow to net income ratio is relatively strong at 84.4%, suggesting that the company is still generating cash relative to its earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	675.48M	475.97M	458.97M	481.33M	456.25M	417.64M
Gross Profit	186.26M	140.54M	105.86M	88.56M	41.27M	58.45M
EBITDA	112.30M	86.84M	49.88M	31.29M	-34.16M	-12.78M
Net Income	121.20M	69.28M	26.31M	11.27M	-48.47M	-22.98M
Balance Sheet
Total Assets	―	328.18M	284.30M	319.91M	300.54M	283.98M
Cash, Cash Equivalents and Short-Term Investments	―	55.25M	22.76M	24.30M	6.25M	24.27M
Total Debt	―	146.04M	174.20M	224.90M	195.17M	149.04M
Total Liabilities	―	262.93M	288.22M	350.29M	342.56M	277.88M
Stockholders Equity	―	65.25M	-3.92M	-30.37M	-42.02M	6.10M
Cash Flow
Free Cash Flow	51.81M	57.83M	65.48M	-10.20M	-63.45M	-10.00M
Operating Cash Flow	61.38M	62.39M	70.51M	-8.85M	-61.48M	-7.59M
Investing Cash Flow	-9.56M	-4.56M	-5.02M	-1.35M	398.00K	-1.41M
Financing Cash Flow	-42.77M	-25.93M	-66.80M	28.37M	46.55M	33.27M

Power Solutions Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 74.01
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSIX, the sentiment is Positive. The current price of 74.01 is above the 20-day moving average (MA) of 71.28, above the 50-day MA of 64.45, and above the 200-day MA of 68.54, indicating a bullish trend. The MACD of 2.93 indicates Negative momentum. The RSI at 58.38 is Neutral, neither overbought nor oversold. The STOCH value of 39.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PSIX.

Power Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SXI	73 Outperform	$2.97B	56.17	7.72%	0.57%	18.51%	-28.69%
CXT	72 Outperform	$2.85B	18.60	13.54%	1.42%	9.30%	-12.55%
EPAC	68 Neutral	$2.11B	23.94	21.75%	0.10%	3.91%	1.48%
PSIX	65 Neutral	$1.71B	13.87	118.50%	―	54.78%	122.61%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
XMTR	55 Neutral	$3.34B	-51.98	-21.46%	―	22.40%	-18.99%
ENOV	49 Neutral	$1.26B	-0.89	-51.11%	―	11.57%	-1016.39%

Power Solutions Corporate Events

Power Solutions Reports Record Q3 2025 Financial Results

On November 6, 2025, Power Solutions International announced record financial results for the third quarter of 2025, with net sales reaching $203.8 million, a 62% increase from the previous year, and net income rising by 59% to $27.6 million. This growth is attributed to strong demand in the power systems market, particularly within the data center sector, leading to expanded manufacturing capacity and increased production. The company also reported a decrease in gross margin due to a shift towards lower-margin products and temporary inefficiencies from ramped-up production. Despite these challenges, PSI’s strategic focus on high-growth sectors like data centers and oil and gas is expected to drive future growth, with anticipated sales growth of 45% for 2025.

The most recent analyst rating on (PSIX) stock is a Hold with a $88.00 price target. To see the full list of analyst forecasts on Power Solutions stock, see the PSIX Stock Forecast page.