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Powell Industries
(NASDAQ:POWL)
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Rating:77Outperform
Price Target:
$280.00
▲(16.18% Upside)
Action:Reiterated
Date:07/07/26
The score is driven primarily by very strong financial performance (materially improved profitability, strong cash generation, and ultra-low leverage) and a favorable demand outlook from the earnings call (record orders/backlog and a major data-center award). These positives are tempered by weak technical momentum (below key moving averages with negative MACD) and a high P/E with minimal dividend support.
Positive Factors
Conservative balance sheet
Powell's extremely low leverage and materially increased equity provide durable financial flexibility. Minimal debt reduces refinancing and interest-rate risk, enabling the company to self-fund capacity buildouts, support large program timing mismatches, and pursue opportunistic M&A without stressing liquidity.
Negative Factors
Lumpy project-driven results
Powell's engineered-to-order model inherently produces uneven revenue and cash flows as large project awards and timing drive results. This structural lumpiness complicates forecasting, can compress margins in weaker cycles, and raises execution risk if several large projects overlap or delay.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet
Powell's extremely low leverage and materially increased equity provide durable financial flexibility. Minimal debt reduces refinancing and interest-rate risk, enabling the company to self-fund capacity buildouts, support large program timing mismatches, and pursue opportunistic M&A without stressing liquidity.
Read all positive factors
Powell Industries (POWL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.45B
Dividend Yield0.32%
Average Volume (3M)710.88K
Price to Earnings (P/E)45.0
Beta (1Y)2.09
Revenue Growth4.50%
EPS Growth7.18%
CountryUS
Employees2,748
SectorIndustrials
Sector Strength72
IndustryElectrical Equipment & Parts
Share Statistics
EPS (TTM)5.15
Shares Outstanding36,431,650
10 Day Avg. Volume942,339
30 Day Avg. Volume710,877
Financial Highlights & Ratios
PEG Ratio1.03
Price to Book (P/B)5.74
Price to Sales (P/S)3.33
P/FCF Ratio23.75
Enterprise Value/Market Cap1.20
Enterprise Value/Revenue8.99
Enterprise Value/Gross Profit29.86
Enterprise Value/Ebitda40.94
Forecast
1Y Price Target
$334.05Price Target Upside38.60% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)5.46
Revenue Forecast (FY)$1.20B
Powell Industries Business Overview & Revenue Model
Company Description
Powell Industries, Inc., operating with its subsidiaries, specializes in the comprehensive design, development, manufacturing, sales, and maintenance of customized electrical apparatus and systems. These advanced solutions are engineered to effici...
How the Company Makes Money
Powell primarily makes money by selling engineered-to-order electrical power distribution and control solutions for large capital projects and facility expansions/maintenance. Revenue is generated mainly from (1) equipment and systems sales: custo...
Powell Industries Earnings Call Summary
Earnings Call Date:May 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
Overall the call was decidedly positive. The company delivered steady revenue growth (+6% YoY), materially stronger order intake ($490M in Q2, nearly double YoY) and a substantially larger backlog (+33% YoY to $1.8B), capped by a post-quarter $400M+ mega data center award (largest in company history). Profitability and cash generation remain solid (gross margin 29.6%, operating cash flow $51M, cash $545M, no debt). Key negatives include a sharp decline in petrochemical revenue (-37% YoY), a small YoY dip in net income and EPS, rising SG&A as investments are made, and capacity/supply-chain and talent constraints that could limit the pace of scaling for very large programs. On balance, the positives materially outweigh the negatives given record orders, backlog growth, diversification, and a strong balance sheet.Positive Updates
Revenue Growth
Total revenue of $297 million in Q2 FY2026, up 6% versus Q2 FY2025 ($279 million). Domestic revenue +2% YoY; international revenue increased to $64 million (up $14 million YoY).
Negative Updates
Petrochemical Market Softness
Petrochemical revenue declined 37% YoY in the quarter, reflecting ongoing softness in that end market despite management optimism about an early-stage cyclical inflection.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth
Total revenue of $297 million in Q2 FY2026, up 6% versus Q2 FY2025 ($279 million). Domestic revenue +2% YoY; international revenue increased to $64 million (up $14 million YoY).
Read all positive updates
Company Guidance
Management described the outlook as strong — they did not give an official FY numeric target but said Powell is well positioned to deliver “strong cash flows and earnings,” citing Q2 revenue of $297 million (+6% YoY), $490 million of Q2 new orders (bringing midyear new awards to nearly $1 billion), book‑to‑bill of 1.7x, and a backlog of $1.8 billion (up 33% YoY, 12% sequentially) that provides visibility into fiscal 2028; Q2 gross margin was 29.6% (‑30 bps YoY, +120 bps sequentially, with ~90 bps from favorable closeouts), net income was $45.9 million ($1.25 diluted), operating cash flow was $51 million, cash and short‑term investments totaled $545 million and the company has no debt. Management reiterated planned and potential capacity investments — Q2 capex $1.8 million, $12–13 million expected for the Jacinto Port upgrade this fiscal year, consideration of an ~$8 million fabrication equipment outlay for ~50k sq ft leased space, and evaluation of a $70–100 million greenfield (250–300k sq ft, ~2‑year build; leased option could be productive in ~6 months and could drive $100–250 million of incremental revenue) — noted R&D at ~1.4% of revenue (target ~1–1.5%) and SG&A of $20 million (8.7% of revenue), and disclosed a post‑quarter >$400 million data‑center mega order that will be included in Q3.Powell Industries Financial Statement Overview
Summary
Income Statement
92
Very Positive
Balance Sheet
95
Very Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.13B | 1.10B | 1.01B | 699.31M | 532.58M | 470.56M |
| Gross Profit | 340.78M | 324.38M | 273.09M | 147.55M | 85.02M | 75.06M |
| EBITDA | 248.58M | 240.81M | 202.96M | 77.56M | 19.24M | 11.65M |
| Net Income | 186.93M | 180.75M | 149.85M | 54.52M | 13.74M | 631.00K |
Balance Sheet | ||||||
| Total Assets | 1.18B | 1.11B | 928.18M | 752.24M | 493.38M | 436.19M |
| Cash, Cash Equivalents and Short-Term Investments | 544.89M | 475.53M | 358.39M | 279.01M | 116.51M | 133.98M |
| Total Debt | 1.96M | 1.66M | 1.22M | 1.44M | 2.32M | 4.23M |
| Total Liabilities | 470.97M | 468.21M | 445.11M | 407.22M | 196.17M | 134.97M |
| Stockholders Equity | 709.07M | 640.77M | 483.07M | 345.03M | 297.21M | 301.22M |
Cash Flow | ||||||
| Free Cash Flow | 192.52M | 154.79M | 96.68M | 174.73M | -6.03M | -33.35M |
| Operating Cash Flow | 203.27M | 167.94M | 108.66M | 182.55M | -3.58M | -30.46M |
| Investing Cash Flow | 1.06M | -8.34M | -21.87M | -26.57M | 6.46M | -2.46M |
| Financing Cash Flow | -27.72M | -25.12M | -19.25M | -13.06M | -13.31M | -13.17M |
Powell Industries Technical Analysis
Negative
241.01
Price Trends
284.23
Negative
238.97
Negative
179.86
Positive
Market Momentum
-10.78
Positive
33.86
Neutral
7.21
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For POWL, the sentiment is Negative. The current price of 241.01 is below the 20-day moving average (MA) of 279.70, below the 50-day MA of 284.23, and above the 200-day MA of 179.86, indicating a neutral trend. The MACD of -10.78 indicates Positive momentum. The RSI at 33.86 is Neutral, neither overbought nor oversold. The STOCH value of 7.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for POWL.
Powell Industries Risk Analysis
Powell Industries disclosed 13 risk factors in its most recent earnings report. Powell Industries reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Powell Industries Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $7.28B | 25.47 | 15.60% | 0.67% | 3.70% | -14.17% | |
78 Outperform | $25.03B | 50.91 | 13.36% | 0.84% | 34.18% | -15.12% | |
77 Outperform | $8.45B | 44.99 | 28.61% | 0.32% | 4.50% | 7.18% | |
76 Outperform | $1.80B | 46.75 | 7.31% | 0.35% | 15.92% | -12.16% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
55 Neutral | $2.05B | -3.34 | -145.77% | ― | 1459.55% | 34.17% | |
54 Neutral | $2.33B | -19.20 | -8.68% | 2.02% | -3.36% | -168.34% |
* Industrials Sector Average
POWL
Powell Industries
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161.41
229.12%
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Powell Industries Corporate Events
Business Operations and StrategyExecutive/Board Changes
Powell Industries Grants Special Equity Award to CEO
Positive
Jul 6, 2026
On July 1 and July 2, 2026, Powell Industries’ board and its Compensation and Human Capital Committee approved a special one-time award of 36,000 restricted stock units for President, CEO and Chairman Brett A. Cope under the company’s ...
Dividends
Powell Industries Declares Quarterly Dividend, Signaling Stability
Positive
May 5, 2026
On May 5, 2026, Powell Industries announced that its board declared a quarterly cash dividend of $0.09 per share on its common stock. The dividend will be paid on June 17, 2026, to shareholders of record as of the close of business on May 20, 2026...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.