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Woodward (WWD)
NASDAQ:WWD
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Woodward
(NASDAQ:WWD)
71Outperform
Positive Factors
Earnings
Q1 results were ahead on lower tax and better Aero EBIT, aided by strong aero A/M & Defense OE sales.
Financial Performance
Woodward's expected 12% commercial aftermarket CAGR significantly outpaces the market forecast and is set to accelerate as new narrow-bodies mature into service cycles.
Market Growth
Woodward anticipates sustained growth in the defense segment, with favorable platform alignment and potential upside from a recent $7.5B IDIQ for JDAM.
Negative Factors
Economic Conditions
China natural gas business guide is meaningfully lower vs. last year's results due to continued elevated levels of dealer inventory and weaker economic growth.
Market Deceleration
Aero A/M comps stiffen in Q2-Q4, which augurs a Y/Y growth deceleration in Q2-Q4.
Production Challenges
Direct shipments to BA remain paused post-strike as WWD awaits confirmation on target rates.
Woodward (WWD) vs. S&P 500 (SPY)
Market Cap
$11.11B
Dividend Yield0.55%
Average Volume (3M)475.83K
Price to Earnings (P/E)31.3
Beta (1Y)1.00
Revenue Growth7.38%
EPS Growth26.61%
CountryUS
Employees9,300
SectorIndustrials
Sector Strength65
IndustryAerospace & Defense
Share Statistics
EPS (TTM)5.98
Shares Outstanding59,359,882
10 Day Avg. Volume568,256
30 Day Avg. Volume475,827
Financial Highlights & Ratios
PEG Ratio1.18
Price to Book (P/B)N/A
Price to Sales (P/S)3.32
Price to Cash Flow (P/CF)79.70
P/FCF Ratio239.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$206.75Price Target Upside8.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Woodward Business Overview & Revenue Model
Company DescriptionWoodward, Inc. designs, manufactures, and services control solutions for the aerospace and industrial markets worldwide. The company operates through two segments: Aerospace and Industrial. The Aerospace segment provides fuel pumps, metering units, actuators, air valves, specialty valves, fuel nozzles, and thrust reverser actuation systems for turbine engines and nacelles, and flight deck controls, actuators, servocontrols, motors, and sensors for aircraft. These products are used on commercial and private aircraft and rotorcraft, as well as on military fixed-wing aircraft and rotorcraft, guided weapons, and other defense systems. It also provides aftermarket maintenance, repair and overhaul, and other services to commercial airlines, repair facilities, military depots, third party repair shops, and other end users. This segment sells its products to original equipment manufacturers (OEMs), tier-one suppliers, and various contractors, as well as through aftermarket sales of components, such as provisioning spares or replacements, and spare parts. The Industrial segment offers actuators, valves, pumps, fuel injection systems, solenoids, ignition systems, speed controls, electronics and software, and sensors. These products are used on industrial gas turbines, steam turbines, compressors, and reciprocating engines. This segment sells its aftermarket products, and other related services to OEMs through an independent network of distributors, as well as directly to end users. The company was founded in 1870 and is headquartered in Fort Collins, Colorado.
How the Company Makes MoneyWoodward generates revenue primarily through the sale of its advanced control systems and components to the aerospace and industrial sectors. The key revenue streams include sales of aerospace components such as fuel pumps, actuators, and cockpit controls, as well as industrial systems like controllers and valves for power generation and distribution. Significant partnerships with major aerospace and industrial companies, as well as long-term contracts for maintenance and support services, also contribute to Woodward's earnings. The company benefits from the ongoing demand for energy-efficient solutions and the need for innovative technologies in both new and existing energy management systems.
Woodward Financial Statement Overview
Summary
Woodward demonstrates strong financial health with impressive revenue and profit growth, solid profitability margins, and a stable balance sheet. The company effectively manages leverage and generates healthy cash flows, positioning it well in the competitive Aerospace & Defense industry.Income Statement
Woodward's income statement shows strong profitability and growth. The Gross Profit Margin is healthy, reflecting efficient cost management. The Net Profit Margin indicates solid bottom-line performance. Revenue Growth Rate has been impressive, showing significant year-over-year growth. Both EBIT and EBITDA Margins are robust, highlighting operational efficiency.84
Very Positive
Balance Sheet
The balance sheet indicates a stable financial position. The Debt-to-Equity Ratio is moderate, suggesting manageable leverage levels. Return on Equity is strong, demonstrating effective use of equity capital. The Equity Ratio is healthy, indicating a solid equity base relative to assets, though some attention to debt levels is advisable.76
Positive
Cash Flow
Cash flow metrics show a positive trend. Free Cash Flow Growth Rate is robust, highlighting improved cash generation. The Operating Cash Flow to Net Income Ratio suggests good cash generation from operations, while the Free Cash Flow to Net Income Ratio confirms efficient conversion of net income into cash.78
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.31B | 3.32B | 2.91B | 2.38B | 2.25B | 2.50B | Gross Profit |
| 861.76M | 876.48M | 677.58M | 525.30M | 551.06M | 640.24M | EBIT |
| 304.18M | 428.30M | 304.71M | 110.39M | 155.56M | 216.17M | EBITDA |
| 569.41M | 618.10M | 443.35M | 231.02M | 285.09M | 424.72M | Net Income Common Stockholders |
| 370.02M | 372.97M | 232.37M | 171.70M | 208.65M | 240.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 72.56M | 282.27M | 137.45M | 107.84M | 448.46M | 153.27M | Total Assets |
| 1.60B | 4.37B | 4.01B | 3.81B | 4.09B | 3.90B | Total Debt |
| 463.66M | 302.72M | 742.21M | 777.42M | 734.85M | 838.48M | Net Debt |
| 391.10M | 20.45M | 604.76M | 669.57M | 286.39M | 685.21M | Total Liabilities |
| 854.88M | 2.19B | 1.94B | 1.91B | 1.88B | 1.91B | Stockholders Equity |
| 741.12M | 2.18B | 2.07B | 1.90B | 2.21B | 1.99B |
| Cash Flow | Free Cash Flow | ||||
| 338.77M | 342.81M | 232.04M | 140.77M | 426.98M | 302.40M | Operating Cash Flow |
| 426.82M | 439.09M | 308.54M | 193.64M | 464.67M | 349.49M | Investing Cash Flow |
| -79.54M | -89.22M | -73.55M | -65.45M | -35.30M | -6.88M | Financing Cash Flow |
| -190.57M | -218.05M | -196.47M | -442.38M | -136.32M | -290.24M |
Woodward Technical Analysis
Positive
190.14
Price Trends
185.78
Positive
181.04
Positive
173.93
Positive
Market Momentum
0.79
Negative
53.17
Neutral
29.32
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WWD, the sentiment is Positive. The current price of 190.14 is above the 20-day moving average (MA) of 183.58, above the 50-day MA of 185.78, and above the 200-day MA of 173.93, indicating a bullish trend. The MACD of 0.79 indicates Negative momentum. The RSI at 53.17 is Neutral, neither overbought nor oversold. The STOCH value of 29.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WWD.
Woodward Risk Analysis
Woodward disclosed 28 risk factors in its most recent earnings report. Woodward reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Woodward Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $137.38B | 24.32 | 33.10% | 2.07% | 5.05% | 2.73% | |
71 Outperform | $11.11B | 31.30 | 16.82% | 0.55% | 7.38% | 26.61% | |
68 Neutral | $78.37B | 49.38 | -29.16% | ― | 16.89% | 20.33% | |
65 Neutral | $4.40B | 34.41 | 8.14% | 1.13% | 6.31% | 28.25% | |
64 Neutral | $862.52M | 27.87 | 4.78% | ― | 3.90% | 81.41% | |
63 Neutral | $4.19B | 19.83 | 12.01% | 1.58% | -3.35% | -6.09% | |
62 Neutral | $8.07B | 13.60 | 3.76% | 3.13% | 3.60% | -14.67% |
* Industrials Sector Average
Performance Comparison
WWD
Woodward
190.14
34.11
21.86%
COLM
Columbia Sportswear
77.36
2.05
2.72%
DCO
Ducommun
58.70
10.17
20.96%
HXL
Hexcel
56.08
-14.15
-20.15%
HON
Honeywell International
215.99
22.13
11.42%
TDG
Transdigm Group
1,399.57
235.99
20.28%
Woodward Earnings Call Summary
Earnings Call Date: Feb 3, 2025 | % Change Since: 1.34% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with noteworthy achievements in aerospace and core industrial growth, operational improvements, and strategic acquisitions. However, these were offset by significant challenges such as the decline in China on-highway sales, overall decrease in net sales and earnings, and the impact of the Boeing work stoppage.Highlights
Aerospace Segment Growth
The Aerospace segment sales increased by 7% to $494 million, with commercial aftermarket up 19%, defense OEM up 21%, and defense aftermarket up 8%.
Core Industrial Growth
Core industrial sales, excluding China on-highway, were up 7%, driven by strength in marine transportation, power generation, and oil and gas markets.
Operational Improvements
Operational improvements and lean transformation efforts have led to better productivity and cost efficiency, contributing to stable operations and improved margins.
Strategic Acquisitions
Woodward signed a definitive agreement to acquire Safran Electronics & Defense electromechanical actuation business, enhancing technology offerings and increasing content on the Airbus A350.
Strong Aftermarket Performance
Commercial aftermarket activity remains healthy, driven by high utilization rates and shop visit rates of legacy aircraft and engines.
Lowlights
China On-Highway Sales Decline
Transportation sales were down 33% due to a $65 million year-over-year decline in China on-highway sales, influenced by local economic challenges.
Net Sales and Earnings Decline
Net sales for Q1 2025 decreased by 2% to $773 million, and earnings per share were down from $1.46 to $1.42 year-over-year.
Boeing Work Stoppage Impact
Commercial OEM sales were down 10% due to the impact from the Boeing work stoppage, affecting overall sales performance.
Company Guidance
In the first quarter of fiscal year 2025, Woodward Incorporated reaffirmed its guidance despite a 2% decrease in net sales to $773 million, with adjusted earnings per share narrowing to a range of $5.85 to $6.25. The Aerospace segment showed a 7% increase in sales to $494 million, driven by a 19% rise in commercial aftermarket and a 21% growth in defense OEM sales, although commercial OEM sales decreased by 10% due to a Boeing work stoppage. Aerospace segment earnings improved to $95 million or 19.2% of sales, aided by price realization. The Industrial segment experienced a 15% drop in sales to $279 million, mainly due to a 33% decline in China on-highway sales, while core industrial sales grew by 7%. Industrial segment earnings fell to $40 million or 14.4% of sales, impacted by lower China volumes. The company maintained a debt leverage of 1.5 times EBITDA and plans to return approximately $215 million to stockholders in 2025.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.