Graham (NYSE:GHM) Posts Earnings Results

Graham (NYSE:GHM) issued its earnings results on Thursday. The industrial products company reported $0.49 EPS for the quarter, beating the consensus estimate of $0.27 by $0.22, FiscalAI reports. Graham had a net margin of 4.53% and a return on equity of 12.32%. The company had revenue of $71.34 million for the quarter, compared to the consensus estimate of $65.60 million. During the same quarter in the previous year, the company earned $0.45 EPS. The firm’s revenue for the quarter was up 28.6% compared to the same quarter last year.

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 Price Performance

NYSE:GHM traded up $6.93 during mid-day trading on Friday, reaching $111.89. 254,831 shares of the company were exchanged, compared to its average volume of 245,875. The company has a quick ratio of 0.68, a current ratio of 1.00 and a debt-to-equity ratio of 0.09. The stock has a market cap of $1.31 billion, a PE ratio of 107.59 and a beta of 1.04. Graham has a 12 month low of $46.58 and a 12 month high of $125.82. The company has a fifty day moving average of $107.15 and a 200 day moving average of $93.45.

Analyst Ratings Changes

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

Hedge Funds Weigh In On Graham

Large investors have recently modified their holdings of the stock. Invesco Ltd. increased its holdings in shares of Graham by 1,993.3% in the fourth quarter. Invesco Ltd. now owns 135,879 shares of the industrial products company’s stock valued at $8,728,000 after purchasing an additional 129,388 shares in the last quarter. XTX Topco Ltd acquired a new position in Graham during the 4th quarter worth $948,000. Uniplan Investment Counsel Inc. lifted its holdings in Graham by 18.0% during the 4th quarter. Uniplan Investment Counsel Inc. now owns 47,865 shares of the industrial products company’s stock worth $3,074,000 after buying an additional 7,311 shares in the last quarter. Balyasny Asset Management L.P. boosted its position in Graham by 52.3% in the 4th quarter. Balyasny Asset Management L.P. now owns 9,761 shares of the industrial products company’s stock valued at $627,000 after buying an additional 3,354 shares during the last quarter. Finally, American Capital Management Inc. boosted its position in Graham by 15.8% in the 4th quarter. American Capital Management Inc. now owns 46,803 shares of the industrial products company’s stock valued at $3,006,000 after buying an additional 6,374 shares during the last quarter. 69.46% of the stock is currently owned by institutional investors and hedge funds.

Key Graham News

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.

About Graham

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.