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Graham
(NYSE:GHM)
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Rating:65Neutral
Price Target:
$89.00
▼(-3.11% Downside)
Action:Downgraded
Date:08/27/26
The score is primarily supported by improved profitability, a conservatively positioned balance sheet, and a constructive earnings-call outlook with reiterated guidance and record backlog. Offsetting this, near-term cash conversion is weak (negative TTM free cash flow), technical signals are bearish with the stock below key moving averages, and valuation is demanding with a high P/E.
Positive Factors
Record backlog and order momentum
Record backlog and book-to-bill above one indicate demand is replenishing faster than revenue is being delivered, improving forward visibility. This supports steadier production planning, gives Graham a foundation for sustained growth, and reduces reliance on winning entirely new orders each quarter.
Negative Factors
Weak near-term cash conversion
Negative operating cash flow despite reported profitability shows that earnings are not currently converting efficiently into cash. Continued working-capital absorption could constrain internally funded investment and make liquidity more dependent on project collections, especially as the business scales.
Read all positive and negative factors
Positive Factors
Negative Factors
Record backlog and order momentum
Record backlog and book-to-bill above one indicate demand is replenishing faster than revenue is being delivered, improving forward visibility. This supports steadier production planning, gives Graham a foundation for sustained growth, and reduces reliance on winning entirely new orders each quarter.
Read all positive factors
Graham (GHM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$953.99M
Dividend Yield3.29%
Average Volume (3M)161.79K
Price to Earnings (P/E)76.7
Beta (1Y)1.68
Revenue Growth21.22%
EPS Growth-16.93%
CountryUS
Employees732
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.06
Shares Outstanding11,737,033
10 Day Avg. Volume176,873
30 Day Avg. Volume161,795
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 Cap1.50
Enterprise Value/Revenue5.47
Enterprise Value/Gross Profit23.50
Enterprise Value/Ebitda62.10
Forecast
1Y Price Target
$124.50Price Target Upside35.53% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)1.55
Revenue Forecast (FY)$291.20M
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 equipment and related services into defense and industrial markets. Revenue is generated through (1) new equipment sales, where customers contract Graham to design and manufacture customi...
Graham Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Nov 09, 2026
Earnings Call Sentiment Positive
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.
Read all updates
Q1-2027 Updates
Positive
Negative
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.
Read all positive updates
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 Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
86
Very Positive
Cash Flow
52
Neutral
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 261.15M | 245.29M | 209.90M | 185.53M | 157.12M | 122.81M |
| Gross Profit | 60.83M | 57.75M | 52.86M | 40.59M | 25.41M | 9.13M |
| EBITDA | 23.02M | 22.60M | 20.76M | 11.25M | 7.62M | -5.22M |
| Net Income | 11.82M | 12.50M | 12.23M | 4.56M | 367.00K | -8.77M |
Balance Sheet | ||||||
| Total Assets | 363.96M | 323.62M | 264.11M | 233.88M | 203.92M | 183.69M |
| Cash, Cash Equivalents and Short-Term Investments | 26.95M | 6.58M | 21.58M | 16.94M | 18.26M | 14.74M |
| Total Debt | 6.79M | 18.39M | 6.85M | 7.77M | 20.38M | 26.93M |
| Total Liabilities | 171.76M | 183.30M | 144.53M | 128.31M | 106.98M | 87.20M |
| Stockholders Equity | 192.20M | 140.31M | 119.58M | 105.57M | 96.93M | 96.49M |
Cash Flow | ||||||
| Free Cash Flow | -6.12M | -121.00K | 5.36M | 18.89M | 10.16M | -4.54M |
| Operating Cash Flow | 5.54M | 15.93M | 24.32M | 28.12M | 13.91M | -2.22M |
| Investing Cash Flow | -37.10M | -43.06M | -19.13M | -15.99M | -3.75M | -57.11M |
| Financing Cash Flow | 47.61M | 11.96M | -521.00K | -13.39M | -6.44M | 14.42M |
Graham Technical Analysis
Negative
91.86
Price Trends
93.09
Negative
99.56
Negative
91.26
Negative
Market Momentum
-2.16
Positive
36.63
Neutral
10.28
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GHM, the sentiment is Negative. The current price of 91.86 is above the 20-day moving average (MA) of 85.92, below the 50-day MA of 93.09, and above the 200-day MA of 91.26, indicating a bearish trend. The MACD of -2.16 indicates Positive momentum. The RSI at 36.63 is Neutral, neither overbought nor oversold. The STOCH value of 10.28 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GHM.
Graham Risk Analysis
Graham disclosed 52 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $75.50B | 23.99 | 101.74% | 2.47% | 4.30% | -3.22% | |
72 Outperform | $8.98B | 24.53 | 16.63% | 1.23% | -0.26% | 29.38% | |
68 Neutral | $6.49B | 147.50 | 2.84% | 0.41% | 13.25% | -48.12% | |
65 Neutral | $953.99M | 76.68 | 7.99% | 3.29% | 21.22% | -16.93% | |
65 Neutral | $11.82B | 35.33 | 16.19% | 0.49% | 13.85% | 8.45% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
48 Neutral | $746.31M | -5.76 | 77.75% | ― | 40.37% | 55.59% |
* Industrials Sector Average
GHM
Graham
81.28
23.45
40.55%
BW
Babcock & Wilcox Company
5.01
1.46
41.13%
NPO
Enpro
306.81
87.15
39.68%
FLS
Flowserve
70.65
21.04
42.41%
ITW
Illinois Tool Works
265.11
26.74
11.22%
CR
Crane Company
204.54
26.70
15.01%
Graham Corporate Events
Executive/Board ChangesShareholder Meetings
Graham Shareholders Approve Directors, Pay Plan and Auditor
Positive
Aug 27, 2026
At Graham Corporation’s annual meeting of stockholders held on August 25, 2026, shareholders elected three directors – James J. Barber, Mauro Gregorio and Troy A. Stoner – to three-year terms expiring in 2029, with each receiving...
Business Operations and StrategyFinancial DisclosuresPrivate Placements and Financing
Graham Posts Record Sales and Backlog in Q1
Positive
Aug 6, 2026
On August 6, 2026, Graham Corporation reported first quarter fiscal 2027 results showing record net sales of $71.3 million, up 29% year over year, driven by broad-based growth and contributions from the FlackTek acquisition. Revenue gains were led...
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.