Graham (NYSE:GHM) Announces Earnings Results

Graham (NYSE:GHM) posted its earnings results on Thursday. The industrial products company reported $0.49 EPS for the quarter, topping 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 firm had revenue of $71.34 million during the quarter, compared to analysts’ expectations of $65.60 million. During the same quarter in the prior year, the firm earned $0.45 EPS. Graham’s quarterly revenue was up 28.6% on a year-over-year basis.

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

Shares of Graham stock traded up $6.93 on Friday, hitting $111.89. The company had a trading volume of 254,831 shares, compared to its average volume of 245,875. The business has a 50-day simple moving average of $107.15 and a 200-day simple moving average of $93.45. The company has a debt-to-equity ratio of 0.09, a current ratio of 1.00 and a quick ratio of 0.68. The company has a market cap of $1.31 billion, a PE ratio of 72.89 and a beta of 1.04. Graham has a 52 week low of $46.58 and a 52 week high of $125.82.

Wall Street Analyst Weigh In

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

Institutional Investors Weigh In On Graham

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Rhumbline Advisers increased its position in shares of Graham by 40.6% during the 2nd quarter. Rhumbline Advisers now owns 14,755 shares of the industrial products company’s stock valued at $731,000 after purchasing an additional 4,257 shares during the period. Quantbot Technologies LP bought a new position in Graham during the second quarter valued at about $325,000. Arrowstreet Capital Limited Partnership acquired a new position in Graham during the second quarter worth about $226,000. Invesco Ltd. grew its holdings in Graham by 1,396.0% during the second quarter. Invesco Ltd. now owns 115,893 shares of the industrial products company’s stock worth $5,738,000 after acquiring an additional 108,146 shares during the period. Finally, Walleye Capital LLC bought a new stake in Graham in the second quarter worth about $783,000. Institutional investors own 69.46% of the company’s stock.

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.