SPX (SPXC) AI Stock Analysis

571 Followers

Top Page

SPX

(NYSE:SPXC)

71Outperform

SPX Technologies shows strong financial performance with robust revenue and profitability growth, supported by effective cost management and strategic acquisitions. Technical indicators reveal some caution, and the stock appears overvalued based on its P/E ratio. The company's optimistic guidance and product innovations are promising, although challenges in the heating segment and geopolitical risks present potential headwinds.

Positive Factors

Company Expansion

Plans for U.S. expansion are expected to drive meaningful accretion to the company's medium-term HVAC organic growth target of 5% to 6%.

Market Position

The company holds leading positions in its markets, with around 90% of revenue coming from #1 or #2 positions.

Negative Factors

Market Concentration

Extremely high market concentration suggests that equity returns over the next decade will be muted.

Stock Performance

SPX stock is down 25% from all-time highs in November 2024, as management worked late last year to telegraph a lower growth outlook for 2025.

SPX (SPXC) vs. S&P 500 (SPY)

Market Cap

$6.18B

Dividend YieldN/A

Average Volume (3M)351.52K

Price to Earnings (P/E)30.8

Beta (1Y)1.36

Revenue Growth13.94%

EPS Growth37.49%

CountryUS

Employees4,300

SectorIndustrials

Sector Strength70

IndustryIndustrial - Machinery

Share Statistics

EPS (TTM)4.28

Shares Outstanding46,778,786

10 Day Avg. Volume484,809

30 Day Avg. Volume351,517

Financial Highlights & Ratios

PEG Ratio0.82

Price to Book (P/B)N/A

Price to Sales (P/S)3.14

Price to Cash Flow (P/CF)9.40

P/FCF Ratio9.90

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$170.00

Price Target Upside28.73% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

SPX Business Overview & Revenue Model

Company DescriptionSPX Technologies, Inc. supplies infrastructure equipment serving the heating, ventilation, and cooling (HVAC); and detection and measurement markets in the United States, China, the United Kingdom, and internationally. The company operates in two segments, HVAC and Detection and Measurement. The HVAC segment engineers, designs, manufactures, installs, and services package and process cooling products and engineered air movement solutions for the HVAC industrial and power generation markets, as well as boilers and comfort heating and ventilation products for the residential and commercial markets. It offers its products under the Marley, Recold, SGS, Cincinnati Fan, Berko, Qmark, Fahrenheat, Leading Edge, Patterson-Kelley, Weil-McLain, and Williamson-Thermoflo brands. The Detection and Measurement segment offers underground pipe and cable locators, inspection and rehabilitation equipment, and robotic systems under the Radiodetection, Pearpoint, Schonstedt, Dielectric, Riser Bond, Warren G-V, Cues, ULC Robotics, and Sensors & Software brands; and bus fare collection systems, communication technologies, and obstruction lighting products under the Genfare, TCI, Flash Technology, Sabik Marine, Sealite, Avlite, and ECS brands. The company markets its products through independent manufacturing representatives, third-party distributors, and retailers, as well as direct to customers. The company was formerly known as SPX Corporation and changed its name to SPX Technologies, Inc. in August 2022. SPX Technologies, Inc. was founded in 1912 and is headquartered in Charlotte, North Carolina.

How the Company Makes MoneySPX Technologies generates revenue through the sale of its diverse portfolio of products and services across multiple industries. Its key revenue streams include the HVAC segment, where the company offers cooling products, heating solutions, and ventilation systems for residential, commercial, and industrial customers. The detection and measurement segment provides diagnostic tools and related equipment, serving sectors such as oil and gas, power generation, and transportation. Additionally, the engineered solutions segment includes specialized products and services tailored to customer-specific needs, often involving customized engineering and project management. SPX's earnings are bolstered by its strategic partnerships and contracts with leading companies in various industries, which ensure a steady demand for its products and services.

SPX Financial Statement Overview

Summary

SPX demonstrates strong financial health with robust revenue growth and improved profitability margins. The company maintains a balanced leverage with a solid equity base, supporting financial stability. Strong cash flow generation enhances liquidity, enabling strategic investments and debt management.

Income Statement

Very Positive

SPX has demonstrated strong revenue growth with a significant increase from $1.74 billion to $1.98 billion in TTM, reflecting a 13.93% growth rate. The gross profit margin is robust at 38.69%, indicating efficient cost management. Net profit margin improved to 10.11% from the previous year's 5.16%, showcasing enhanced profitability. The EBIT margin at 16.23% and EBITDA margin at 20.08% highlight strong operational performance.

Balance Sheet

Positive

The debt-to-equity ratio is moderate at 0.42, indicating a balanced approach to leverage. Return on Equity (ROE) is strong at 14.49%, reflecting effective use of equity to generate profit. The equity ratio of 51.00% underscores a stable financial structure with a healthy proportion of equity financing.

Cash Flow

Very Positive

Free cash flow grew by 49.03% from the previous year, indicating improved cash generation capability. The operating cash flow to net income ratio is 1.56, suggesting solid cash conversion efficiency. Free cash flow to net income ratio of 1.37 further emphasizes strong cash flow relative to earnings.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.98B	1.74B	1.46B	1.22B	1.56B
	Gross Profit
799.40M	670.00M	523.90M	431.80M	478.90M
	EBIT
308.30M	221.90M	51.00M	73.70M	132.00M
	EBITDA
392.70M	286.00M	82.80M	125.50M	132.00M
	Net Income Common Stockholders
200.50M	89.90M	19.80M	59.00M	99.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
156.90M	99.40M	147.80M	388.20M	68.30M
	Total Assets
2.71B	2.44B	1.93B	2.63B	2.30B
	Total Debt
614.70M	558.30M	246.80M	246.00M	412.40M
	Net Debt
457.80M	458.90M	99.00M	-142.20M	344.10M
	Total Liabilities
1.33B	1.25B	851.70M	1.53B	1.67B
	Stockholders Equity
1.38B	1.19B	1.08B	1.10B	629.20M
Cash Flow		Free Cash Flow
275.10M	184.60M	-152.70M	165.00M	104.80M
	Operating Cash Flow
313.10M	208.50M	-136.80M	174.60M	126.30M
	Investing Cash Flow
-284.50M	-570.20M	-66.10M	314.10M	-126.10M
	Financing Cash Flow
53.10M	309.60M	-38.90M	-167.60M	15.90M

SPX Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price132.06

Price Trends

50DMA

139.09

Negative

100DMA

147.40

Negative

200DMA

150.77

Negative

Market Momentum

MACD

-2.80

Positive

RSI

43.87

Neutral

STOCH

30.12

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPXC, the sentiment is Neutral. The current price of 132.06 is above the 20-day moving average (MA) of 132.01, below the 50-day MA of 139.09, and below the 200-day MA of 150.77, indicating a neutral trend. The MACD of -2.80 indicates Positive momentum. The RSI at 43.87 is Neutral, neither overbought nor oversold. The STOCH value of 30.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SPXC.

SPX Risk Analysis

SPX disclosed 40 risk factors in its most recent earnings report. SPX 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

SPX Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WTS	77 Outperform	$6.47B	22.28	18.08%	0.89%	9.53%	10.98%
FLS	75 Outperform	$5.57B	19.79	14.34%	1.99%	5.49%	51.02%
GTLS	73 Outperform	$5.63B	30.18	7.91%	―	23.86%	740.71%
SPXC	71 Outperform	$6.18B	30.84	15.65%	―	13.94%	37.49%
JBTM	66 Neutral	$4.98B	36.17	5.58%	0.42%	-4.48%	-85.89%
Sector *	62 Neutral	$7.62B	13.01	3.19%	3.32%	3.77%	-14.28%
RRX	56 Neutral	$6.41B	32.87	3.11%	1.41%	-3.47%	―

* Industrials Sector Average

Performance Comparison

SPXC

SPX

132.06

12.88

10.81%

GTLS

Chart Industries

125.24

-24.86

-16.56%

FLS

Flowserve

42.28

-3.38

-7.40%

JBTM

JBT Marel

95.92

3.21

3.46%

RRX

Regal Rexnord

99.29

-61.64

-38.30%

WTS

Watts Water Technologies

193.71

-4.27

-2.16%

SPX Earnings Call Summary

Earnings Call Date: Feb 25, 2025 | % Change Since: -3.14% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Positive

The earnings call reflected strong financial performance in 2024 and optimistic guidance for 2025. Strategic acquisitions and product innovations were highlighted as key drivers of growth. However, challenges were noted in the heating segment due to warmer weather, and there were concerns about geopolitical and tariff impacts.

Highlights

Strong Adjusted EBITDA Growth

Full year adjusted EBITDA grew by 36%, and adjusted EPS was near the upper end of guidance.

Revenue and Margin Expansion

Fourth-quarter revenue increased by 13.7%, with a 28.1% increase in adjusted EBITDA and a 250 basis points margin expansion.

Strategic Acquisition of KTS

The acquisition of KTS expanded SPX's communication technologies platform, enhancing growth opportunities in the Detection & Measurement segment.

Introduction of Innovative Products

SPX introduced new products in the HVAC and Detection & Measurement segments, including biofuel boilers, heat pump boiler combinations, and survey-grade precision locators.

Positive Guidance for 2025

SPX provided 2025 guidance with anticipated double-digit growth in adjusted EBITDA and adjusted EPS.

Lowlights

Headwinds in Heating Segment

Warm weather impacted heating sales, leading to lower than expected revenue in the HVAC segment.

Modest Organic Revenue Growth in Detection & Measurement

Forecasts for the Detection & Measurement segment indicated flat organic revenue growth due to timing of project deliveries.

Tariffs and Geopolitical Risks

Potential impacts from tariffs and geopolitical changes, including the new U.S. administration's policies, were noted as areas of uncertainty.

Company Guidance

In the fourth quarter of 2024, SPX Technologies reported robust financial performance and provided optimistic guidance for 2025. The company achieved a 13.7% increase in revenue, with significant growth in both its HVAC and Detection & Measurement segments. Adjusted EBITDA rose by 28.1%, contributing to a 250 basis point margin expansion. SPX Technologies also completed the acquisition of Kranze Technology Solutions, which is expected to enhance their Detection & Measurement segment's capabilities and expand their communication technologies platform. For 2025, the company forecasts revenue between $2.13 billion and $2.19 billion, with an adjusted EBITDA range of $460 million to $490 million, reflecting approximately 13% growth. Adjusted EPS is anticipated to grow by 10% at the midpoint, reaching between $6.00 and $6.25. SPX is strategically poised for another year of double-digit growth, with a solid backlog and ongoing product innovations in sustainability-focused HVAC solutions and communication technologies.

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.