Graham (781) AI Stock Analysis

Graham

(Frankfurt:781)

Rating:―N/A

Action:N/A

Date:―

No summary available

Positive Factors

Record backlog and order momentumA record backlog and book-to-bill above one indicate demand is replenishing faster than revenue is being delivered. This improves forward revenue visibility, supports production planning, and provides a durable foundation for growth over the next several quarters.

Negative Factors

Weak recent cash conversionRecent earnings have not translated into equivalent cash generation, with negative free cash flow despite positive net income. If working-capital demands or investment spending remain elevated, cash availability could constrain reinvestment and reduce financial flexibility.

Graham (781) vs. iShares MSCI Germany ETF (EWG)

Market Cap: EUR 821.00M
Dividend Yield: ―
Average Volume (3M): 104
Price to Earnings (P/E): 66.0
Beta (1Y): -0.05
Revenue Growth: 12.97%
EPS Growth: -22.28%
Country: Germany
Employees: 732
Sector: Industrials
Sector Strength: 63
Industry: Industrial - Machinery

Graham Business Overview & Revenue Model

Company Description

Graham Corporation, founded in 1936 and based in Batavia, New York, is an engineering and manufacturing company that, along with its subsidiaries, specializes in creating advanced fluid, power, heat transfer, and vacuum equipment. This specialized ma...

Graham Earnings Call Summary

Earnings Call Date:Aug 05, 2026(Q1-2027)|% Change Since:-33.48%|Next Earnings Date:Nov 04, 2026

Earnings Call SentimentPositive

The call conveyed strong execution and momentum: record revenue, double-digit growth in high-potential end markets (Defense and Space), record backlog and robust order activity, successful integration of FlackTek, and a strengthened balance sheet. Headwinds are manageable and largely related to sales mix (higher Defense content) leading to a year-over-year gross margin decline, near-term operating cash timing effects, and incremental SG&A related to strategic investments. Management maintained full-year guidance and reiterated a multi-year growth and margin expansion framework, indicating confidence in the outlook.

Positive Updates

Record Quarterly Revenue

Revenue of $71.3 million, a record for Q1 and an increase of 29% year-over-year (17% organic growth), driven by broad-based strength across Defense, Space and contributions from FlackTek.

Negative Updates

Gross Margin Decline Year-over-Year

Gross profit rose 21% to $17.8 million, but gross margin decreased to 25.0% from 26.5% a year earlier (down ~150 basis points), primarily due to sales mix (higher Defense revenue and material receipts) despite a 230 basis point sequential improvement versus Q4 FY26.

Company Guidance

Guidance was reiterated unchanged: fiscal 2027 revenue is expected to be $285–$295 million, gross margin 24.5%–25.5%, SG&A 16.5%–17.5% of sales (including ~ $2.5M of incremental investments), adjusted EBITDA $35–$40 million (≈44% growth at the midpoint), and capital expenditures $18–$22 million; the outlook embeds $5.5–$6.5 million of equity‑based compensation/acquisition & integration/ERP conversion costs, management expects ~35%–40% of the $557M backlog to convert to revenue in the next 12 months and another ~20%–25% the following year, and the long‑term financial framework targets ~8%–10% organic revenue growth annually with adjusted EBITDA margins expanding to 14%–16% by FY2029.

Graham Risk Analysis

Graham disclosed 52 risk factors in its most recent earnings report. Graham reported the most risks in the "Legal & Regulatory" category.

Legal & Regulatory - Litigation, compliance, new legislation, and taxation risks

Latest Risks Added

1 New Risk

1.31 PART II - OTHER INFORMATION Item 1A. Risk Factors There have been no material changes from the risk factors previously disclosed in Part 1 – Item 1A of the Company’s Form 10-K for the fiscal year ended March 31, 2026.Q2, 2026

Graham Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

DE:781 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NPO	74Outperform	$5.75B	130.54	2.84%	0.47%	13.25%	-48.12%
ITW	70Outperform	$79.16B	24.80	103.39%	2.35%	4.80%	8.78%
CR	69Neutral	$11.45B	33.79	15.90%	0.50%	21.54%	5.62%
Sector *	63Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
FLS	63Neutral	$10.02B	39.51	11.35%	1.10%	0.21%	-42.26%
BW	52Neutral	$636.08M	-4.91	77.75%	―	40.37%	55.59%

* Industrials Sector Average

Performance Comparison

DE:781 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
DE:781	Graham Corporation	59.00	6.00	11.32%
BW	Babcock & Wilcox	4.27	0.35	8.93%
NPO	Enpro Industries, Inc.	271.53	38.78	16.66%
FLS	Flowserve	79.01	8.00	11.27%
ITW	Illinois Tool Works	278.55	41.48	17.50%
CR	Crane Company	198.02	6.37	3.32%

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.

Graham AI Stock Analysis