Graham Corporation (GHM)
NYSE:GHM
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Graham
(NYSE:GHM)
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Rating:69Neutral
Price Target:
$117.00
▲(22.67% Upside)
Action:Reiterated
Date:06/08/26
The score is driven by improving fundamentals (income statement turnaround and strong balance sheet) and solid bullish technical momentum. It is tempered by weak recent cash conversion/free cash flow and a very high P/E valuation, despite constructive FY2027 guidance supported by record backlog and orders.
Positive Factors
Conservative balance sheet & liquidity
A very low debt-to-equity ratio and over $100M of available liquidity after a $50M strategic investment give Graham durable financial flexibility. This capital strength supports multi-year capex, integration and acquisition plans without needing frequent external financing, reducing execution risk.
Negative Factors
Weaker free cash flow conversion
Free cash flow swung to slightly negative despite positive operating cash flow, signaling working-capital intensity and elevated reinvestment. Over time this limits internally available funding for dividends, buybacks or opportunistic M&A and increases reliance on disciplined liquidity planning or external financing.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet & liquidity
A very low debt-to-equity ratio and over $100M of available liquidity after a $50M strategic investment give Graham durable financial flexibility. This capital strength supports multi-year capex, integration and acquisition plans without needing frequent external financing, reducing execution risk.
Read all positive factors
Graham (GHM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.25B
Dividend YieldN/A
Average Volume (3M)229.56K
Price to Earnings (P/E)78.8
Beta (1Y)1.74
Revenue Growth19.01%
EPS Growth61.65%
CountryUS
Employees595
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.14
Shares Outstanding11,672,823
10 Day Avg. Volume308,609
30 Day Avg. Volume229,565
Financial Highlights & Ratios
PEG Ratio0.15
Price to Book (P/B)2.62
Price to Sales (P/S)1.49
P/FCF Ratio58.53
Enterprise Value/Market Cap0.88
Enterprise Value/Revenue4.47
Enterprise Value/Gross Profit19.00
Enterprise Value/Ebitda62.94
Forecast
1Y Price Target
$97.66Price Target Upside2.39% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)1.94
Revenue Forecast (FY)$281.42M
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...
How the Company Makes Money
Graham makes money primarily by selling engineered-to-order and engineered-to-application equipment and components, along with related aftermarket and service work. Revenue is generated from (1) custom-designed vacuum and heat-transfer equipment (...
Graham Earnings Call Summary
Earnings Call Date:Jun 08, 2026
(Q4-2026)
| Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Positive
The call presented strong commercial momentum and several record metrics (revenue, orders, backlog) alongside meaningful strategic investments and acquisitions that expand capabilities and liquidity. Management provided confident FY2027 guidance with substantial top-line and EBITDA growth expected. Offsetting these positives were margin pressure in the quarter due to product mix, one-time acquisition accounting impacts, higher SG&A from integration/investment activity, and lumpy cash flow/working capital dynamics. Overall, the positive operational and financial momentum and strong backlog outweigh near-term margin and integration headwinds.Positive Updates
Record Annual Revenue and Growth
Fiscal 2026 revenue reached a record $245.0M, up 17% year-over-year. Management cites disciplined execution and diversified end markets as drivers of the increase.
Negative Updates
Quarterly Margin Compression
Q4 gross margin declined to 22.7% from 27.0% in the prior-year quarter (down ~430 basis points year-over-year for the quarter). Full-year gross margin fell to 23.5% from 25.2% (down ~170 bps), driven by a higher mix of lower-margin defense revenue, increased material receipts, incremental tariffs and the absence of a prior-year grant benefit.
Read all updates
Q4-2026 Updates
Positive
Negative
Record Annual Revenue and Growth
Fiscal 2026 revenue reached a record $245.0M, up 17% year-over-year. Management cites disciplined execution and diversified end markets as drivers of the increase.
Read all positive updates
Company Guidance
Graham guided fiscal 2027 to revenue of $285–$295 million (about 18% growth at the midpoint) and adjusted EBITDA of $35–$40 million (≈44% growth at the midpoint versus FY26’s $26M), with gross margin targeted at 24.5–25.5% and SG&A expected to be 16.5–17.5% of sales (which includes roughly $2.5M of incremental people/technology/commercialization investments and $4–$5M of equity‑based comp, acquisition/integration and ERP conversion costs); they expect a fiscal 2027 effective tax rate of 18–20% and capital expenditures of $18–$22M (≈7% of revenue) including a new 30,000 sq ft Arvada facility, while noting FlackTek’s current ~10% adjusted EBITDA margin should improve as revenue scales. Guidance is supported by a record $533M backlog (up 29% YoY) with ~35–40% expected to convert to revenue in the next 12 months, record FY26 orders of $359M and a 1.5x book‑to‑bill, and a strong liquidity position (over $100M available after a $50M strategic investment from T. Rowe Price and use of the $80M revolver); prior‑year investments were made with a >20% ROIC hurdle and are expected to drive operating leverage and margin expansion as volume grows.Graham Financial Statement Overview
Summary
Income Statement
73
Positive
Balance Sheet
82
Very Positive
Cash Flow
46
Neutral
| Breakdown | TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 245.29M | 209.90M | 185.53M | 157.12M | 122.81M | 97.49M |
| Gross Profit | 57.75M | 52.86M | 40.59M | 25.41M | 9.13M | 20.47M |
| EBITDA | 17.43M | 21.12M | 12.35M | 7.24M | -5.22M | 5.22M |
| Net Income | 12.50M | 12.23M | 4.56M | 367.00K | -8.77M | 2.37M |
Balance Sheet | ||||||
| Total Assets | 323.62M | 264.11M | 233.88M | 203.92M | 183.69M | 144.28M |
| Cash, Cash Equivalents and Short-Term Investments | 6.58M | 21.58M | 16.94M | 18.26M | 14.74M | 65.03M |
| Total Debt | 20.19M | 6.85M | 7.77M | 20.38M | 26.93M | 138.00K |
| Total Liabilities | 183.30M | 144.53M | 128.31M | 106.98M | 87.20M | 46.35M |
| Stockholders Equity | 140.31M | 119.58M | 105.57M | 96.93M | 96.49M | 97.93M |
Cash Flow | ||||||
| Free Cash Flow | -121.00K | 5.36M | 18.89M | 10.16M | -4.54M | -3.88M |
| Operating Cash Flow | 15.93M | 24.32M | 28.12M | 13.91M | -2.22M | -1.72M |
| Investing Cash Flow | -43.06M | -19.13M | -15.99M | -3.75M | -57.11M | 32.40M |
| Financing Cash Flow | 11.96M | -521.00K | -13.39M | -6.44M | 14.42M | -4.45M |
Graham Technical Analysis
Positive
95.38
Price Trends
93.91
Positive
86.82
Positive
72.43
Positive
Market Momentum
3.20
Negative
64.58
Neutral
83.46
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GHM, the sentiment is Positive. The current price of 95.38 is below the 20-day moving average (MA) of 99.52, above the 50-day MA of 93.91, and above the 200-day MA of 72.43, indicating a bullish trend. The MACD of 3.20 indicates Negative momentum. The RSI at 64.58 is Neutral, neither overbought nor oversold. The STOCH value of 83.46 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GHM.
Graham Risk Analysis
Graham disclosed 48 risk factors in its most recent earnings report. Graham 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
Graham Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $1.25B | 78.85 | 11.90% | ― | 19.01% | 61.65% | |
69 Neutral | $457.49M | 77.77 | 2.52% | 3.70% | -7.01% | -72.56% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
59 Neutral | $460.89M | 18.03 | 6.50% | 2.32% | -1.78% | -35.06% | |
54 Neutral | $2.44B | -16.98 | 61.01% | ― | -3.26% | 18.16% |
* Industrials Sector Average
GHM
Graham
107.10
62.44
139.81%
BW
Babcock & Wilcox Company
16.36
15.19
1298.29%
PKOH
Park-Ohio Holdings
32.01
14.72
85.09%
LXFR
Luxfer
16.94
5.23
44.61%
Graham Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Graham Reports Record Revenue, Strong Orders and Backlog
Positive
Jun 8, 2026
On June 8, 2026, Graham Corporation reported results for the fourth quarter and fiscal year ended March 31, 2026, highlighting record quarterly revenue of $67.1 million and record full-year revenue of $245.3 million, up 13% and 17% respectively, a...
Executive/Board Changes
Graham Updates Executive and Director Incentive Compensation Programs
Neutral
Jun 5, 2026
On June 1, 2026, Graham Corporation’s board compensation committee renewed and amended its fiscal 2027 long-term incentive award plan for senior executives, granting a mix of time-vesting and performance-vesting restricted stock units that a...
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Graham Raises $50 Million Through Institutional Equity Investment
Positive
Apr 15, 2026
On April 14, 2026, Graham Corporation agreed to a private investment in public equity with accounts advised by T. Rowe Price Investment Management, under which the investors will buy 599,808 common shares, or about 5% of the company, at $83.36 per...
Executive/Board Changes
Graham Boosts Executive Pay and Incentive Compensation Structure
Positive
Mar 30, 2026
On March 24, 2026, Graham Corporation’s Compensation Committee approved increases to the annual base salaries of President and CEO Matthew J. Malone and Vice President – Finance, CFO and Chief Accounting Officer Christopher J. Thome, s...
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.