Graham (NYSE:GHM) Announces Quarterly Earnings Results, Beats Expectations By $0.22 EPS

Graham (NYSE:GHM) posted its quarterly earnings results on Thursday. The industrial products company reported $0.49 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.27 by $0.22, FiscalAI reports. The business had revenue of $71.34 million during the quarter, compared to the consensus estimate of $65.60 million. Graham had a net margin of 4.53% and a return on equity of 12.32%. Graham’s revenue was up 28.6% compared to the same quarter last year. During the same quarter last year, the firm posted $0.45 EPS.

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 Stock Up 6.6%

GHM opened at $111.89 on Friday. Graham has a fifty-two week low of $46.58 and a fifty-two week high of $125.82. The firm has a market capitalization of $1.31 billion, a P/E ratio of 107.59 and a beta of 1.04. The company’s 50-day moving average is $107.39 and its 200 day moving average is $93.58. The company has a debt-to-equity ratio of 0.09, a current ratio of 1.00 and a quick ratio of 0.68.

Key Headlines Impacting Graham

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.

Institutional Investors Weigh In On Graham

Several institutional investors and hedge funds have recently added to or reduced their stakes in GHM. Royal Bank of Canada boosted its stake in Graham by 7,833.6% in the fourth quarter. Royal Bank of Canada now owns 245,625 shares of the industrial products company’s stock valued at $15,777,000 after acquiring an additional 242,529 shares during the last quarter. Alyeska Investment Group L.P. purchased a new position in shares of Graham in the third quarter valued at $10,356,000. Invesco Ltd. increased its position in shares of Graham by 1,993.3% during the fourth quarter. Invesco Ltd. now owns 135,879 shares of the industrial products company’s stock valued at $8,728,000 after buying an additional 129,388 shares during the period. Goldman Sachs Group Inc. increased its holdings in Graham by 121.0% during the 4th quarter. Goldman Sachs Group Inc. now owns 97,452 shares of the industrial products company’s stock worth $6,259,000 after acquiring an additional 53,362 shares during the period. Finally, Informed Momentum Co LLC lifted its stake in Graham by 423.1% in the 4th quarter. Informed Momentum Co LLC now owns 60,542 shares of the industrial products company’s stock worth $3,889,000 after purchasing an additional 48,969 shares in the last quarter. Hedge funds and other institutional investors own 69.46% of the company’s stock.

Analyst Ratings Changes

A number of research analysts have weighed in on GHM shares. Zacks Research lowered shares of Graham from a “strong-buy” rating to a “hold” rating in a research note on Wednesday, June 10th. Weiss Ratings lowered shares of Graham from a “hold (c+)” rating to a “hold (c)” rating in a report on Wednesday, July 29th. Northland Securities upped their target price on shares of Graham from $111.00 to $135.00 and gave the stock an “outperform” rating in a report on Tuesday, June 23rd. Oppenheimer raised their price target on shares of Graham to $130.00 and gave the company an “outperform” rating in a research report on Thursday, June 25th. Finally, Wall Street Zen raised Graham from a “sell” rating to a “hold” rating in a report on Saturday. Two research analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company. Based on data from MarketBeat, the stock has a consensus rating of “Hold” and a consensus target price of $132.50.

Graham Company Profile

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.