# Graham (GHM.US)

Canonical: https://gigainvestors.com/s/GHM

Analysis as of: 2026-10-15T06:34:28.281Z. Financial observations: FY1997–FY2027.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $71.15 per share; close as of 2026-10-15.

Estimated value: low $8.12 per share, central $9.90 per share, high $11.26 per share. Buy at or below the central value $9.90 per share. Valuation as of 2026-10-15T06:34:28.281Z; scenarios are not confidence intervals.

Expected annual return: 3.8% at the stated quote. About 3.8% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 1 revenue decline in the last 10 years (informational)

- more than 2 net loss years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 3

- Operating margin variation: 1.95×

Chart: Operating margin; fiscal year observations.

- FY2018: 0.04×

- FY2019: 0.01×

- FY2020: 0.01×

- FY2021: 0.03×

- FY2022: -0.09×

- FY2023: 0.01×

- FY2024: 0.04×

- FY2025: 0.07×

- FY2026: 0.06×

- LTM to Jun 2026: 0.05×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 7.3%

- ROIC, second-lowest year: 1.1%

- Typical minus recent gross margin: -1.9 pp

- Typical gross margin (annual median): 21.4%

- Recent gross margin (lower of latest and 3-year median): 23.3%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.5%

- ROIC including acquisitions, ten-year median: 4.5%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2018: 12.3%

- FY2019: 2.5%

- FY2020: 2.2%

- FY2021: 6.6%

- FY2022: -10.5%

- FY2023: 1.1%

- FY2024: 8.0%

- FY2025: 15.2%

- FY2026: 11.2%

- LTM to Jun 2026: 9.0%

### economics: fail

- incremental invested capital return below threshold

- working capital as a share of revenue rose more than 10pp and ends positive

- Owner earnings / net income, 5-yr: 0.91×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $19M

- Net income, five-year total: $21M

- Return on incremental invested capital: 7.4%

- Working capital / revenue, annual change: 1.9 pp

- Working capital / revenue, change between three-year averages: 13.2 pp

- Working capital / revenue, final three-year average: 45.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 0.63×

- FY2023: 7.10×

- FY2024: 1.00×

- FY2025: 0.39×

- FY2026: 1.00×

### management: fail

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- potential debt-funded buybacks (informational)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 3.1% vs 11.2%

- Per-share earnings: 0.52 to 1.11 (three-year endpoint medians)

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 1.1%

- Ordinary dilution, 5-year annual growth: 2.3%

- Market cap gain: $650M

- Cumulative retained earnings: -$3.8M

- Diluted shares, 10-year annual growth: 1.1%

- Diluted shares, 5-year annual growth: 2.3%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 10.0%

- Per-share value change: $0.59

- Per-share value, starting three-year median: $0.52

- Per-share value, ending three-year median: $1.11

- Buybacks concentrated in cheaper years (correlation): -0.02

- Average buyback yield: 0.1%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $95M

- Cumulative net income, 10 years: $20M

- ROIC, first three-year median: 3.1%

- ROIC, last three-year median: 11.2%

Chart: Earnings per share; fiscal year observations.

- FY2017: $0.52

- FY2018: -$1.01

- FY2019: -$0.03

- FY2020: $0.19

- FY2021: $0.24

- FY2022: -$0.83

- FY2023: $0.03

- FY2024: $0.42

- FY2025: $1.11

- FY2026: $1.12

### accounting: pass

- Sloan accruals: -1.1%

- Receivables to sales index (DSRI): 1.06×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 13.4%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.27×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.64×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -4.9%

- FY2018: -12.8%

- FY2019: -1.0%

- FY2020: 0.4%

- FY2021: 2.8%

- FY2022: -3.6%

- FY2023: -6.6%

- FY2024: -10.1%

- FY2025: -4.6%

- FY2026: -1.1%

## Holders

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Dan Davidowitz](https://gigainvestors.com/pcm): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 43% since Jun 2026 · sales +6.5%

Story as of 2026-10-16T09:58:49.055Z; price observation 2026-10-15.

Price needs cash profits to grow 32.2% a year for ten years

- 2025-06-09: Graham Corporation targets $225M–$235M fiscal 2026 revenue as leadership transition advances growth agenda ([seekingalpha.com](https://seekingalpha.com/news/4456692-graham-corporation-targets-225m-235m-fiscal-2026-revenue-as-leadership-transition-advances?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-02-06: Graham projects $233M–$239M revenue for fiscal 2026 as FlackTek acquisition expands technology platform ([seekingalpha.com](https://seekingalpha.com/news/4548695-graham-projects-233m-239m-revenue-for-fiscal-2026-as-flacktek-acquisition-expands-technology?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-05-08: Graham Corp. (GHM) Rallied Amid Increased Demand in Defense End Markets ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/graham-corp-ghm-rallied-amid-121022276.html))

- 2026-06-08: Graham projects fiscal 2027 revenue of $285M-$295M, with adjusted EBITDA of $35M-$40M ([seekingalpha.com](https://seekingalpha.com/news/4601541-graham-projects-fiscal-2027-revenue-of-285m-295m-with-adjusted-ebitda-of-35m-40m?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

### Sales · FY2026–2027

sales +6.5%; source https://www.sec.gov/Archives/edgar/data/716314/000119312526260688/ghm-20260331.htm; observed 2026-06-08.

- FY2018: $92M 

- FY2019: $91M 

- FY2020: $91M 

- FY2021: $97M 

- FY2022: $123M 

- FY2023: $157M 

- FY2024: $186M 

- FY2025: $210M 

- FY2026: $245M 

- FY2027: $261M 

### Gross margin · FY2027

gross margin 23.3%; source https://www.sec.gov/Archives/edgar/data/716314/000119312526260688/ghm-20260331.htm; observed 2026-06-08.

- FY2018: 23.9% 

- FY2019: 20.0% 

- FY2020: 20.0% 

- FY2021: 21.0% 

- FY2022: 7.4% 

- FY2023: 16.2% 

- FY2024: 21.9% 

- FY2025: 25.2% 

- FY2026: 23.5% 

- FY2027: 23.3% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in specialty industrial machinery; annual sales are USD 245.3 million.

- Source: https://www.sec.gov/Archives/edgar/data/716314/000119312526260688/ghm-20260331.htm (filed 2026-06-08); FY2026: revenue 245293000; grossProfit 57750000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); GHM.US: Graham Corporation designs and manufactures fluid, power, heat transfer, and vacuum technologies for chemical and petrochemical processing, defense, space, petroleum refining, cryogenic, and energy industries. The company offers power plant systems, including ejectors and surface condensers, as well as torpedo ejection, propulsion, and power systems comprising turbines, alternators, regulators, pumps, and blowers for the defense industry. It also provides heat transfer and vacuum systems that include ejectors, process and surface condensers, liquid ring pumps, and heat exchangers, as well as nozzles and power generation systems, such as turbines, generators, compressors, and pumps for the energy and process industry. In addition, the company offers rocket propulsion systems, including turbopumps, fuel, cryogenic, and nuclear propellant pumps; cooling systems comprising pumps, compressors, fans, and blowers; and life support systems that consist of fans, pumps, and blowers for the space industry. Further, it provides thermal management systems, such as pumps, blowers, and electronics for the defense and energy sector; advanced mixing systems, including bladeless centrifugal mixers, accessories, services, and consumables; and spare parts for its equipment. It serves customers in the United States, Asia, Canada, the Middle East, South America, and internationally. Graham Corporation was founded in 1936 and is headquartered in Batavia, New York.

### Why customers stay

Margins ranged from 21.9% to 25.2% during 2024–26; it earns 7.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-08); FY2024: grossProfit / revenue = 21.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-08); FY2025: grossProfit / revenue = 25.2%.

- Source: https://www.sec.gov/Archives/edgar/data/716314/000119312526260688/ghm-20260331.htm (filed 2026-06-08); FY2026: grossProfit / revenue = 23.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-08); 10-year return on capital observations [[2018,0.12345855625339226],[2019,0.024505266444659564],[2020,0.02194989626282903],[2021,0.06594606670008793],[2022,-0.10522634131448232],[2023,0.01082649753588916],[2024,0.07982462585512974],[2025,0.15196711232027596],[2026,0.11193954015239393],[2027,0.08982522283598135]]; median 0.07288534627760884. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Spends 65.7% of cash earnings on expansion; earns 7.4% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-08); FY2017: growth capex 0; upkeep 325000; owner earnings 7024000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-08); FY2020: growth capex 0; upkeep 2417000; owner earnings 1423000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-08); FY2021: growth capex 213000; upkeep 1945000; owner earnings 2374000. Growth capex / owner earnings = 0.08972198820556024.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-08); FY2023: growth capex 0; upkeep 3749000; owner earnings 2605000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-08); FY2024: growth capex 3794000; upkeep 5432000; owner earnings 4556000. Growth capex / owner earnings = 0.8327480245829675.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-08); FY2025: growth capex 5610997.37865942; upkeep 13346002.62134058; owner earnings 4819997.37865942. Growth capex / owner earnings = 1.1641079730669894.

- Source: https://www.sec.gov/Archives/edgar/data/716314/000119312526260688/ghm-20260331.htm (filed 2026-06-08); FY2026: growth capex 8211000; upkeep 7843000; owner earnings 12500000. Growth capex / owner earnings = 0.65688.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-08); Incremental return on capital 0.07368203895975359, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-08); Dividend observations: [[2017,3492000],[2018,3517000],[2019,3834000],[2020,4250000],[2021,4391000],[2022,3523000],[2023,0],[2024,0],[2025,0],[2026,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/716314/000119312526260688/ghm-20260331.htm (filed 2026-06-08); FY2026: cash repurchases 1541000 USD.

### Are managers owners

Insiders own 5.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); GHM.US SharesStats.PercentInsiders = 5.053 percentage points; cache date 2026-10-15.

### What the price says

The price assumes cash profits grow 32.2% yearly over ten years; actual growth was 4.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-08); Ten-year compound average after fade. Initial solved rate 0.4604319123970345. Price 71.15; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 0.7425623560052088 → FY2026 1.1222840725444425. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $17.85 per share

- 2016-11: $22.22 per share

- 2016-12: $22.15 per share

- 2017-01: $22.22 per share

- 2017-02: $21.93 per share

- 2017-03: $23.00 per share

- 2017-04: $22.07 per share

- 2017-05: $20.93 per share

- 2017-06: $19.66 per share

- 2017-07: $20.01 per share

- 2017-08: $20.03 per share

- 2017-09: $20.83 per share

- 2017-10: $19.27 per share

- 2017-11: $19.84 per share

- 2017-12: $20.93 per share

- 2018-01: $21.40 per share

- 2018-02: $20.21 per share

- 2018-03: $21.42 per share

- 2018-04: $21.58 per share

- 2018-05: $25.51 per share

- 2018-06: $25.81 per share

- 2018-07: $26.63 per share

- 2018-08: $27.81 per share

- 2018-09: $28.17 per share

- 2018-10: $24.61 per share

- 2018-11: $24.92 per share

- 2018-12: $22.84 per share

- 2019-01: $22.40 per share

- 2019-02: $22.65 per share

- 2019-03: $19.63 per share

- 2019-04: $20.70 per share

- 2019-05: $20.41 per share

- 2019-06: $20.21 per share

- 2019-07: $21.65 per share

- 2019-08: $18.41 per share

- 2019-09: $19.86 per share

- 2019-10: $22.66 per share

- 2019-11: $21.24 per share

- 2019-12: $21.88 per share

- 2020-01: $18.28 per share

- 2020-02: $16.58 per share

- 2020-03: $12.90 per share

- 2020-04: $13.10 per share

- 2020-05: $11.44 per share

- 2020-06: $12.74 per share

- 2020-07: $13.16 per share

- 2020-08: $13.13 per share

- 2020-09: $12.77 per share

- 2020-10: $13.20 per share

- 2020-11: $15.79 per share

- 2020-12: $15.18 per share

- 2021-01: $14.76 per share

- 2021-02: $15.34 per share

- 2021-03: $14.24 per share

- 2021-04: $13.71 per share

- 2021-05: $14.69 per share

- 2021-06: $13.76 per share

- 2021-07: $13.69 per share

- 2021-08: $12.00 per share

- 2021-09: $12.40 per share

- 2021-10: $12.71 per share

- 2021-11: $12.76 per share

- 2021-12: $12.44 per share

- 2022-01: $12.34 per share

- 2022-02: $8.01 per share

- 2022-03: $7.71 per share

- 2022-04: $7.29 per share

- 2022-05: $7.41 per share

- 2022-06: $6.92 per share

- 2022-07: $7.15 per share

- 2022-08: $9.53 per share

- 2022-09: $8.79 per share

- 2022-10: $8.90 per share

- 2022-11: $9.58 per share

- 2022-12: $9.62 per share

- 2023-01: $9.70 per share

- 2023-02: $14.36 per share

- 2023-03: $13.08 per share

- 2023-04: $12.87 per share

- 2023-05: $11.09 per share

- 2023-06: $13.28 per share

- 2023-07: $14.00 per share

- 2023-08: $16.00 per share

- 2023-09: $16.60 per share

- 2023-10: $15.59 per share

- 2023-11: $18.53 per share

- 2023-12: $18.97 per share

- 2024-01: $19.46 per share

- 2024-02: $23.69 per share

- 2024-03: $27.28 per share

- 2024-04: $27.84 per share

- 2024-05: $27.05 per share

- 2024-06: $28.16 per share

- 2024-07: $32.77 per share

- 2024-08: $31.84 per share

- 2024-09: $29.59 per share

- 2024-10: $28.02 per share

- 2024-11: $44.82 per share

- 2024-12: $44.47 per share

- 2025-01: $45.42 per share

- 2025-02: $33.83 per share

- 2025-03: $28.82 per share

- 2025-04: $30.48 per share

- 2025-05: $39.43 per share

- 2025-06: $49.51 per share

- 2025-07: $57.15 per share

- 2025-08: $49.05 per share

- 2025-09: $54.90 per share

- 2025-10: $62.29 per share

- 2025-11: $57.50 per share

- 2025-12: $64.23 per share

- 2026-01: $69.92 per share

- 2026-02: $81.22 per share

- 2026-03: $78.92 per share

- 2026-04: $95.20 per share

- 2026-05: $100.14 per share

- 2026-06: $123.79 per share

- 2026-07: $95.90 per share

- 2026-08: $87.21 per share

- 2026-09: $86.31 per share

- 2026-10: $82.37 per share

## Annual estimated value (USD per share)

- FY2017: low $16.16 per share, central $17.33 per share, high $18.89 per share

- FY2018: low $15.51 per share, central $16.60 per share, high $18.04 per share

- FY2019: low $15.45 per share, central $16.51 per share, high $17.93 per share

- FY2020: low $8.78 per share, central $9.00 per share, high $9.29 per share

- FY2021: low $8.01 per share, central $8.25 per share, high $8.55 per share

- FY2023: low $3.95 per share, central $4.30 per share, high $4.76 per share

- FY2024: low $4.32 per share, central $4.75 per share, high $5.32 per share

- FY2025: low $6.33 per share, central $6.99 per share, high $7.86 per share

- FY2026: low $6.35 per share, central $8.11 per share, high $9.46 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/716314/000119312526260688/ghm-20260331.htm); period 2026-03-31, filed 2026-06-08.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.