Graham (NYSE:GHM) Posts Earnings Results, Beats Expectations By $0.22 EPS

Graham (NYSE:GHM) issued its earnings results on Thursday. The industrial products company reported $0.49 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.27 by $0.22, FiscalAI reports. Graham had a net margin of 5.10% and a return on equity of 11.94%. The firm had revenue of $71.34 million for the quarter, compared to analysts’ expectations of $65.60 million. During the same quarter last year, the business earned $0.45 earnings per share. The business’s revenue was up 28.6% on a year-over-year basis.

Here are the key takeaways from Graham’s conference call:

• Strong start to fiscal 2027: Revenue rose 29% to a record $71.3 million, adjusted EBITDA increased 28% to $8.8 million, and backlog reached a sixth consecutive quarterly record of $557 million. Orders totaled $96 million, producing a 1.3x book-to-bill ratio.
• Defense demand remains robust: Defense revenue grew 40%, supported by submarine, torpedo, radar, and directed-energy programs. Graham received approximately $61.8 million in new and follow-on defense orders, including a combined approximately $43 million in Mark 48 and Mark 19 awards.
• Space growth appears increasingly structural: Space revenue increased 86% and orders reached $14.4 million, or a 2.3x book-to-bill ratio, as development programs moved into production. Management said the current quarterly revenue run rate represents a new normal, though orders may remain lumpy.
• Full-year guidance was unchanged: Graham continues to forecast fiscal 2027 revenue of $285 million–$295 million and adjusted EBITDA of $35 million–$40 million, while targeting 14%–16% adjusted EBITDA margins by fiscal 2029. First-quarter gross margin declined year over year to 25% due largely to sales mix, and energy and process capital-project pushouts remain a headwind.
• Balance sheet and capacity investments support growth: Following a $50 million strategic investment, Graham ended the quarter with $27 million of cash, no debt, and approximately $75 million of revolver availability. The company is continuing investments in automation, testing, and a new 30,000-square-foot manufacturing facility, while FlackTek contributed $6.6 million of revenue and $13.2 million of orders.

Graham Trading Up 6.6%

GHM stock traded up $6.93 during trading on Friday, reaching $111.89. The company had a trading volume of 251,272 shares, compared to its average volume of 185,730. The company has a debt-to-equity ratio of 0.09, a current ratio of 1.00 and a quick ratio of 0.68. Graham has a 52 week low of $46.58 and a 52 week high of $125.82. The business has a 50 day moving average of $107.15 and a 200 day moving average of $93.45. The company has a market cap of $1.31 billion, a P/E ratio of 99.02 and a beta of 1.04.

Analysts Set New Price Targets

A number of equities research analysts recently commented on the stock. Oppenheimer increased their price target on shares of Graham to $130.00 and gave the company an “outperform” rating in a research report on Thursday, June 25th. Weiss Ratings downgraded shares of Graham from a “hold (c+)” rating to a “hold (c)” rating in a research note on Wednesday, July 29th. Northland Securities increased their target price on shares of Graham from $111.00 to $135.00 and gave the stock an “outperform” rating in a report on Tuesday, June 23rd. Zacks Research cut Graham from a “strong-buy” rating to a “hold” rating in a research note on Wednesday, June 10th. Finally, Wall Street Zen downgraded Graham from a “hold” rating to a “sell” rating in a report on Saturday, June 13th. Two research analysts have rated the stock with a Buy rating and three have given a Hold rating to the company. According to data from MarketBeat.com, the stock currently has an average rating of “Hold” and an average price target of $132.50.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently made changes to their positions in the company. Comerica Bank lifted its stake in shares of Graham by 396.2% in the 3rd quarter. Comerica Bank now owns 1,052 shares of the industrial products company’s stock valued at $58,000 after purchasing an additional 840 shares during the period. BNP Paribas Financial Markets boosted its position in shares of Graham by 62.8% during the second quarter. BNP Paribas Financial Markets now owns 1,063 shares of the industrial products company’s stock valued at $53,000 after purchasing an additional 410 shares in the last quarter. The Manufacturers Life Insurance Company purchased a new stake in Graham in the fourth quarter worth $201,000. Systematic Alpha Investments LLC purchased a new stake in Graham in the fourth quarter worth $212,000. Finally, Millennium Management LLC bought a new position in Graham in the third quarter worth $207,000. Hedge funds and other institutional investors own 69.46% of the company’s stock.

Graham News Roundup

Here are the key news stories impacting Graham this week:

• Positive Sentiment: Earnings and revenue exceeded expectations. Graham reported quarterly EPS of $0.49, above the $0.27 consensus estimate, while revenue reached $71.34 million versus expectations of $65.60 million. Revenue increased 28.6% year over year. Graham Q1 earnings and revenues surpass estimates
• Positive Sentiment: Orders and backlog support future growth. First-quarter orders totaled $95.9 million, producing a 1.3x book-to-bill ratio, and backlog reached a record $557.2 million. Management reaffirmed fiscal 2027 revenue guidance of $285 million to $295 million, broadly in line with the $289 million analyst consensus. Graham fiscal Q1 net sales and backlog update
• Positive Sentiment: Defense contract wins reinforce demand. Graham was awarded more than $43 million in contracts for mission-critical submarine and turbomachinery products, supporting its defense-focused growth outlook. Graham awarded more than $43 million in defense contracts
• Positive Sentiment: An investor letter cited Graham’s strong execution and improving sentiment toward small-cap stocks as factors supporting the company’s recent performance. Strong execution drove Graham higher
• Neutral Sentiment: News about a Russia sanctions bill sponsored by U.S. Senator Lindsey Graham is unrelated to Graham Corporation (NYSE: GHM) and should not be interpreted as a company-specific catalyst. Russia sanctions bill advances in Senate
• Negative Sentiment: Despite strong sales, net income declined to $3.9 million from $4.6 million a year earlier, and diluted EPS fell to $0.33 from $0.42 in the prior-year period. The company also issued $50 million of stock during the quarter, creating potential dilution.

Graham Company Profile

Graham Corporation (NYSE: GHM) is a U.S.-based industrial engineering company that designs, manufactures and services vacuum and heat transfer equipment. Its core offerings include liquid ring vacuum pumps, surface condensers, heat exchangers and custom-engineered vacuum systems. These products play a critical role in energy-intensive industries, where reliable removal of non-condensable gases and efficient heat exchange are vital to process performance.

The company’s technologies find application across a range of end markets, including power generation, petrochemical, oil and gas, LNG, and semiconductor manufacturing.