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Graham beats Q2 adj EBITDA estimates, helped by FlackTek acquisition

By Reuters News


Overview

  • U.S. industrial equipment maker's Q2 sales rose 6% yr/yr but missed analyst expectations

  • Q2 adjusted EBITDA rose 64% and beat analyst expectations

  • Growth driven by Defense and Space markets, operational improvements, and FlackTek acquisition


Outlook

  • Company reaffirms fiscal 2027 net sales guidance of $285 mln to $295 mln

  • Graham maintains fiscal 2027 adjusted EBITDA forecast of $35 mln to $40 mln

  • Company raises fiscal 2027 gross margin outlook to 25.0%-26.0% from 24.5%-25.5%


Result Drivers

  • FLACKTEK ACQUISITION - Co said FlackTek acquisition contributed $9.5 mln in Q2 revenue and supported sales growth

  • DEFENSE AND SPACE GROWTH - Co cited higher Defense sales from project milestones and new programs, and Space sales growth from commercialization and program ramp-ups

  • MARGIN EXPANSION - Co attributed higher gross margin to operational improvements, sales mix, and FlackTek acquisition


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q2 Sales

Miss

$69.76 mln

$71.07 mln (6 Analysts)

Q2 Adjusted EPS

$0.52

Q2 EPS

$0.39

Q2 Net Income

$4.64 mln

Q2 Adjusted EBITDA

Beat

$10.30 mln

$8.56 mln (5 Analysts)

Q2 Gross Margin

28.20%

Q2 Operating Income

$5.83 mln


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the industrial machinery & equipment peer group is "buy"

  • Wall Street's median 12-month price target for Graham Corp is $128.00, about 84.1% above its November 4 closing price of $69.52

  • The stock recently traded at 33 times the next 12-month earnings vs. a P/E of 48 three months ago


Reuters Recommended Reads

  • Nov 4 - Curtiss-Wright Q3 sales rise 10%, beat estimates

  • Nov 3 - AMETEK Q3 sales beat estimates, raises outlook

  • Nov 3 - Regal Rexnord Q3 sales beat estimates on data center demand


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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