IMPORTANT DISCLAIMER: Blank Capital Research ("BCR") is a technology platform, not a registered investment advisor or broker-dealer. The algorithmically generated signals, scores, and rankings provided on this site ("God Mode" Signals) are for informational and research purposes only and do not constitute financial advice, investment recommendations, or an offer to sell or solicit an offer to buy any securities.
HYPOTHETICAL PERFORMANCE RESULTS: The "timing scores" and "regime signals" displayed are based on quantitative models. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity.
RISK OF LOSS: Trading in financial markets involves a high degree of risk and may result in the loss of your entire investment. Data provided by third-party sources (Intrinio, Snowflake) is believed to be reliable but is not guaranteed for accuracy or completeness. Past performance is not indicative of future results.
Relative valuation derived from Industrials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 38.4GRADE D
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
9.2%
Sector: 8.9%
Dividend Analysis audit
No Dividend
This company does not currently pay a dividend.
Analyst Projections
Analyst Consensus
Unlock Valuation Tools
Sign up for free access to institutional-quality research tools.
Based on our 6-factor quantitative model, GRAHAM CORP (GHM) receives a "Hold" rating with a composite score of 45.4/100, ranked #834 out of 4446 stocks. Key factor scores: Quality 38/100, Value 39/100, Momentum 72/100. This is quantitative analysis only — not investment advice.
GRAHAM CORP (GHM) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does GRAHAM CORP Do?
Graham Corporation, together with its subsidiaries, designs, manufactures, and supplies vacuum and heat transfer equipment for the chemical, defense, petrochemical, petroleum refining, power generation/alternative energy, and other industries. It offers heat transfer equipment, including surface condensers, heliflows, water heaters, and various types of heat exchangers, as well as custom-engineered ejectors; vacuum equipment, such as steam jet ejector vacuum systems and liquid ring vacuum pumps; and turbomachinery products for the aerospace, cryogenic, defense, and energy markets. The company also services and sells spare parts for its equipment. It sells its products directly, as well as through independent sales representatives in the United States, the Middle East, Canada, Asia, South America, and internationally. Graham Corporation was founded in 1936 and is headquartered in Batavia, New York. GRAHAM CORP (GHM) is classified as a small-cap stock in the Industrials sector, specifically within the Machinery industry. The company is led by CEO Daniel J. Thoren and employs approximately 490 people, headquartered in BATAVIA, New York. With a market capitalization of $906M, GHM is one of the notable companies in the Industrials sector.
GRAHAM CORP (GHM) Stock Rating — Hold (April 2026)
As of April 2026, GRAHAM CORP receives a Hold rating with a composite score of 45.4/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.GHM ranks #834 out of 4,446 stocks in our coverage universe. Within the Industrials sector, GRAHAM CORP ranks #140 of 752 stocks, placing it in the top quartile of its Industrials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
GHM Stock Price and 52-Week Range
GRAHAM CORP (GHM) currently trades at $91.09. The stock lost $0.69 (0.8%) in the most recent trading session. The 52-week high for GHM is $91.91, which means the stock is currently trading -0.9% from its annual peak. The 52-week low is $24.78, putting the stock 267.6% above its annual trough. Recent trading volume was 101K shares, suggesting relatively thin trading activity.
Is GHM Overvalued or Undervalued? — Valuation Analysis
GRAHAM CORP (GHM) carries a value factor score of 39/100 in the Blank Capital model, signaling premium valuation that prices in significant future growth. The trailing price-to-earnings ratio is 81.85x, compared to the Industrials sector average of 28.33x — a premium of 189%. The price-to-book ratio stands at 7.55x, versus the sector average of 2.23x. The price-to-sales ratio is 4.40x, compared to 0.50x for the average Industrials stock. On an enterprise value basis, GHM trades at 50.23x EV/EBITDA, versus 5.70x for the sector.
At current multiples, GRAHAM CORP trades at a premium to most Industrials peers. This elevated valuation may be justified if the company can sustain above-average growth rates and profitability, but it also creates downside risk if earnings disappoint expectations.
GRAHAM CORP Profitability — ROE, Margins, and Quality Score
GRAHAM CORP (GHM) earns a quality factor score of 38/100, signaling below-average profitability metrics relative to the broader market. The return on equity (ROE) is 9.2%, compared to the Industrials sector average of 8.9%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at 4.1% versus the sector average of 3.3%.
On a margin basis, GRAHAM CORP reports gross margins of 24.2%, compared to 35.8% for the sector. The operating margin is 6.4% (sector: 6.2%). Net profit margin stands at 5.3%, versus 3.9% for the average Industrials stock. Revenue growth is running at 5.9% on a trailing basis, compared to 6.4% for the sector. Profitability is below benchmark levels, which may reflect industry headwinds, elevated reinvestment, or structural challenges.
GHM Debt, Balance Sheet, and Financial Health
GRAHAM CORP has a debt-to-equity ratio of 123.0%, compared to the Industrials sector average of 70.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 1.06x, suggesting adequate working capital coverage.
GHM has a beta of 1.47, meaning it is more volatile than the broader market — a $10,000 investment in GHM would be expected to move 47.4% more than the S&P 500 on any given day. The stability factor score for GRAHAM CORP is 48/100, reflecting average volatility within the normal range for its sector.
GRAHAM CORP Revenue and Earnings History — Quarterly Trend
In TTM 2026, GRAHAM CORP reported revenue of $225M and earnings per share (EPS) of $0.26. Net income for the quarter was $12M. Gross margin was 24.2%. Operating income came in at $15M.
In Q3 2026, GRAHAM CORP reported revenue of $57M and earnings per share (EPS) of $0.26. Net income for the quarter was $3M. Gross margin was 23.8%. Revenue grew 20.5% year-over-year compared to Q3 2025. Operating income came in at $3M.
In Q2 2026, GRAHAM CORP reported revenue of $66M and earnings per share (EPS) of $0.28. Net income for the quarter was $3M. Gross margin was 21.7%. Revenue grew 23.3% year-over-year compared to Q2 2025. Operating income came in at $4M.
In Q1 2026, GRAHAM CORP reported revenue of $55M and earnings per share (EPS) of $0.42. Net income for the quarter was $5M. Gross margin was 26.5%. Revenue grew 11.1% year-over-year compared to Q1 2025. Operating income came in at $5M.
Over the past 8 quarters, GRAHAM CORP has demonstrated a growth trajectory, with revenue expanding from $50M to $225M. Investors analyzing GHM stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
GHM Dividend Yield and Income Analysis
GRAHAM CORP (GHM) does not currently pay a dividend. This is common among smaller companies in the Machinery industry that prefer to reinvest cash flows into business expansion rather than returning capital to shareholders. Income-focused investors looking for Industrials dividend stocks may want to explore other Industrials stocks or use the stock screener to filter by dividend yield.
GHM Momentum and Technical Analysis Profile
GRAHAM CORP (GHM) has a momentum factor score of 72/100, indicating strong price momentum with the stock outperforming the majority of the market over recent periods. Stocks with high momentum scores have historically tended to continue their outperformance in the near term. The investment factor score is 31/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 21/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
GHM vs Competitors — Industrials Sector Ranking and Peer Comparison
Comparing GHM against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full GHM vs S&P 500 (SPY) comparison to assess how GRAHAM CORP stacks up against the broader market across all factor dimensions.
GHM Next Earnings Date
No upcoming earnings date has been announced for GRAHAM CORP (GHM) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy GHM? — Investment Thesis Summary
GRAHAM CORP presents a balanced picture with arguments on both sides. The quality score of 38/100 flags below-average profitability. The value score of 39/100 indicates premium valuation. Price momentum is positive at 72/100, suggesting the trend favors buyers.
In summary, GRAHAM CORP (GHM) earns a Hold rating with a composite score of 45.4/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on GHM stock.
We'll email you when stocks you follow change their composite rating.
Institutional Research Dossier
GRAHAM CORP (GHM) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain a Hold rating on Graham Corporation (GHM). While the company operates in niche markets with some degree of specialization, its valuation appears stretched given its historical performance and sector comparisons. The primary concern revolves around the company's high P/E and EV/EBITDA multiples, which suggest that the current market price already reflects significant future growth that may be challenging to achieve consistently.
Graham's exposure to cyclical industries and project-based revenue recognition introduces volatility. While recent revenue growth is positive, the company's profitability metrics, particularly gross margin, lag behind the sector average. Investors should closely monitor the company's ability to improve its operational efficiency and secure larger, more profitable contracts to justify its premium valuation.
Business Strategy & Overview
Graham Corporation operates as a manufacturer of vacuum and heat transfer equipment, serving a diverse range of industries including chemical, defense, petrochemical, petroleum refining, and power generation. The company's revenue is primarily derived from the sale of custom-engineered equipment and aftermarket services, including spare parts and maintenance. Graham's strategic positioning centers on providing specialized solutions tailored to the specific needs of its clients, often involving complex engineering and design requirements. This focus on customization allows Graham to command higher prices and build long-term relationships with its customers.
The company's product portfolio includes surface condensers, heat exchangers, ejectors, vacuum systems, and turbomachinery. These products are critical components in various industrial processes, such as distillation, evaporation, and cooling. Graham's ability to offer a comprehensive suite of solutions, from initial design to ongoing maintenance, provides a competitive advantage. The company's sales strategy involves direct sales and a network of independent sales representatives, covering key geographic markets including the United States, the Middle East, Canada, Asia, and South America.
Graham's business is characterized by long sales cycles and project-based revenue recognition. The timing of large contracts can significantly impact quarterly and annual results, leading to revenue volatility. The company's success depends on its ability to secure new projects, manage costs effectively, and maintain its reputation for quality and reliability. Graham also faces competition from larger, more diversified industrial companies, as well as smaller, specialized manufacturers.
The company's growth strategy involves expanding its product offerings, penetrating new markets, and pursuing strategic acquisitions. Graham has historically focused on organic growth, but may consider acquisitions to enhance its capabilities or expand its geographic reach. The company's management team has emphasized the importance of investing in research and development to maintain its technological edge and meet the evolving needs of its customers. The defense sector is a key area of focus, offering potential for long-term growth and stable revenue streams.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
5.9%
Sector: 6.4%
IN LINE
Economic Moat Analysis
Graham Corporation's economic moat can be classified as Narrow. The company's competitive advantage stems primarily from its specialized engineering expertise and established reputation in niche markets. While Graham does not possess a dominant market share or significant network effects, its ability to provide custom-engineered solutions creates a degree of customer stickiness and pricing power. The company's long history and track record of reliability contribute to its intangible assets, making it a trusted supplier for critical industrial equipment.
Switching costs for Graham's customers are moderate. While the initial investment in Graham's equipment can be substantial, the cost of switching to a different supplier is not prohibitive. However, the complexity of the equipment and the need for specialized expertise can create some barriers to entry for new competitors. Graham's focus on aftermarket services also contributes to customer retention, as customers often prefer to rely on the original equipment manufacturer for maintenance and repairs.
Graham's cost advantages are limited. The company's gross margin of 24.2% is significantly lower than the sector average of 35.8%, indicating that it does not possess a significant cost advantage over its competitors. This is likely due to the company's focus on custom-engineered solutions, which require higher engineering and manufacturing costs. Graham's efficient scale is also limited, as the company's revenue of $56.70 million is relatively small compared to larger industrial companies.
The company's moat is vulnerable to technological changes and increased competition. New technologies could disrupt the market for vacuum and heat transfer equipment, potentially eroding Graham's competitive advantage. Increased competition from larger, more diversified companies could also put pressure on Graham's pricing and profitability. The company's ability to maintain its narrow moat depends on its continued investment in research and development, its ability to adapt to changing market conditions, and its success in building long-term relationships with its customers.
Financial Health & Profitability
Graham Corporation's financial health presents a mixed picture. The company's revenue has shown growth, with TTM revenue at $56.70 million, up from $157.12 million in FY2023 and $185.53 million in FY2024. However, this growth has been inconsistent, with fluctuations in quarterly revenue. The company's net income has also been volatile, with a TTM net income of $2.85 million compared to $0.37 million in FY2023 and $4.56 million in FY2024. This volatility is likely due to the project-based nature of the business and the timing of large contracts.
The company's profitability metrics are generally below the sector average. Its gross margin of 24.2% is significantly lower than the sector average of 35.8%, indicating that it may face challenges in controlling its costs. Its operating margin of 6.4% is slightly above the sector average of 6.2%, while its net margin of 5.3% is higher than the sector average of 3.7%. This suggests that the company is relatively efficient in managing its operating expenses, but its lower gross margin limits its overall profitability.
The company's balance sheet is relatively leveraged, with a debt-to-equity ratio of 123.00 compared to the sector average of 70.00. This indicates that the company relies heavily on debt financing, which could increase its financial risk. However, the company's current ratio of 1.06 suggests that it has sufficient liquidity to meet its short-term obligations. The absence of data on total cash and total debt makes it difficult to fully assess the company's financial health.
The company's return on equity (ROE) of 9.2% is in line with the sector average of 9.2%. However, given the company's higher debt-to-equity ratio, its ROE may be artificially inflated. The absence of free cash flow data makes it difficult to assess the company's cash flow generation capabilities. Overall, Graham Corporation's financial health is adequate, but its high leverage and inconsistent profitability raise concerns. The company needs to improve its gross margin and reduce its reliance on debt financing to strengthen its financial position.
Valuation Assessment
Graham Corporation's valuation appears stretched based on several key metrics. The company's P/E ratio of 307.4x is significantly higher than the sector average of 27.7x, indicating that investors are paying a substantial premium for its earnings. Similarly, its EV/EBITDA ratio of 43.1x is much higher than the sector average of 5.7x, suggesting that the company is overvalued relative to its earnings before interest, taxes, depreciation, and amortization. These high multiples imply that the market expects significant future growth from Graham, which may be difficult to achieve given its historical performance and the cyclical nature of its business.
The company's revenue growth of 5.9% is slightly below the sector average of 6.6%, further suggesting that its high valuation may not be justified. While the company's net margin of 5.3% is higher than the sector average of 3.7%, this is not enough to offset its significantly higher P/E and EV/EBITDA multiples. The absence of free cash flow data makes it difficult to assess the company's valuation based on its cash flow generation capabilities.
Given the company's high valuation multiples and inconsistent profitability, the stock appears to be expensive. Investors should exercise caution and carefully consider the company's growth prospects and financial risks before investing. A more reasonable valuation would likely be closer to the sector average, reflecting the company's historical performance and the cyclical nature of its business. The current market price seems to incorporate overly optimistic assumptions about the company's future growth and profitability.
The Momentum score of 74/100 suggests that the stock has been performing well recently, which may be contributing to its high valuation. However, investors should be wary of chasing momentum, as it can often lead to overvaluation. A more fundamental analysis of the company's business and financial performance is necessary to determine whether its current valuation is justified. The Value score of 39/100 further supports the conclusion that the stock is overvalued.
Risk & Uncertainty
Graham Corporation faces several specific risks that could negatively impact its business and financial performance. One of the primary risks is its exposure to cyclical industries, such as chemical, petrochemical, and petroleum refining. These industries are subject to economic fluctuations, which can impact demand for Graham's products and services. A downturn in these industries could lead to a decline in revenue and profitability. The company's project-based revenue recognition also introduces volatility, as the timing of large contracts can significantly impact quarterly and annual results.
Another risk is competition from larger, more diversified industrial companies, as well as smaller, specialized manufacturers. These competitors may have greater financial resources, broader product offerings, and more established customer relationships. Graham's ability to compete effectively depends on its ability to differentiate its products and services, maintain its reputation for quality and reliability, and offer competitive pricing. The company's reliance on a network of independent sales representatives also creates a risk, as it may not have direct control over their sales efforts.
The company's high debt-to-equity ratio of 123.00 increases its financial risk. This high leverage could make it more difficult for the company to weather economic downturns or unexpected expenses. The company's ability to service its debt depends on its ability to generate sufficient cash flow, which could be impacted by a decline in revenue or profitability. The company's reliance on a limited number of key customers also creates a concentration risk. The loss of one or more of these customers could have a significant impact on its revenue and profitability.
Bulls Say / Bears Say
The Bull Case
BULL VIEWGraham's specialized engineering expertise and established reputation in niche markets provide a competitive advantage, allowing it to command higher prices and build long-term relationships with its customers.
BULL VIEWThe company's focus on aftermarket services and spare parts generates recurring revenue and enhances customer retention, providing a stable source of income.
BULL VIEWIncreased investment in infrastructure and energy projects globally will drive demand for Graham's vacuum and heat transfer equipment, leading to sustained revenue growth.
The Bear Case
BEAR VIEWGraham's high P/E and EV/EBITDA multiples suggest that the stock is overvalued, and the market's expectations for future growth may be unrealistic given the company's historical performance.
BEAR VIEWThe company's exposure to cyclical industries and project-based revenue recognition introduces volatility, making it difficult to predict future earnings and cash flow.
BEAR VIEWGraham's gross margin is significantly lower than the sector average, indicating that it faces challenges in controlling its costs and may struggle to improve its profitability.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score GHM and 4,400+ other equities.
GRAHAM CORP exhibits a 497% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
4.1%
Sector: 3.3%
Gross Margin
Pricing power and cost efficiency
24.2%
Sector: 35.8%
Operating Margin
Core business profitability
6.4%
Sector: 6.2%
Net Margin
Bottom-line profitability
5.3%
Sector: 3.9%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
