GET DAILY SIGNALSGraham Corporation (GHM) Delivers Earnings Beat and Record Backlog in Q2 Fiscal 2027
Key Takeaways
- Graham Corporation reported second quarter fiscal 2027 net sales of $69.8 million, up 6% year over year, reflecting growth in Defense and Space alongside contributions from the FlackTek acquisition.
- Adjusted earnings per share (EPS) of $0.52 rose 68% and beat analyst consensus, while GAAP (Generally Accepted Accounting Principles) EPS climbed 39% to $0.39.
- Gross margin expanded 650 basis points to 28.2%, and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped 64% to $10.3 million.
- Backlog reached a record $561.3 million, up 12% year over year, with a book-to-bill ratio of 1.1x for the quarter.
- The company reaffirmed its full-year fiscal 2027 guidance for net sales and adjusted EBITDA while slightly raising its gross margin outlook.
- For more on Graham Corporation, explore its Major News, Today's Price Move, Price Targets, and Forecast pages.
- To discover data-driven trading ideas across the broader market, explore Trending AI Robots.
Why These Results Stand Out
Graham Corporation (GHM) designs and manufactures mission-critical fluid, power, heat transfer, vacuum, and advanced mixing technologies for the Defense, Space, and Energy & Process industries. The second quarter fiscal 2027 numbers provide a useful snapshot of how a defense-led expansion has now delivered seven straight quarters of record backlog. From what I see, the key questions are whether margins can keep expanding even as Energy & Process projects stay muted and whether the FlackTek acquisition is adding to profitability. With Defense accounting for roughly 83% of the backlog, this report gives clearer visibility into revenue conversion and progress toward longer-term targets.
Quarterly Performance Breakdown
For the three months ended September 30, 2026, net sales reached $69.8 million, a 6% rise from $66.0 million in the prior-year period. That figure came in just below the consensus estimate of about $71.1 million, yet adjusted EPS of $0.52 comfortably topped the roughly $0.43 estimate. Gross profit climbed 38% to $19.7 million, lifting the gross margin 650 basis points to 28.2% thanks to a better product mix, operational gains, and the FlackTek contribution. Adjusted EBITDA rose 64% to $10.3 million and the margin widened 530 basis points to 14.8%. GAAP EPS increased 39% to $0.39.
Orders totaled $73.7 million for a 1.1x book-to-bill ratio, pushing the backlog to a new high of $561.3 million, up 12% year over year. Defense backlog grew 10% while Space backlog surged 108%. Operating cash flow came in at a robust $46.7 million, leaving the balance sheet with $71.4 million in cash and zero debt. Management kept its full-year fiscal 2027 outlook unchanged at net sales of $285 million to $295 million and adjusted EBITDA of $35 million to $40 million, while lifting the gross margin target to 25.0%–26.0% of sales. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Investor Reaction and Market Context
The market took a measured view of the report. The sizable beats on earnings and EBITDA, along with the clear margin improvement, highlighted the company’s ability to translate revenue into stronger profits. Revenue slightly missed consensus and sequential top-line growth slowed, underscoring that order timing in defense and capital-project markets can be uneven. With guidance reaffirmed and the margin outlook nudged higher, the overall tone stayed constructive, though focus remains on whether order momentum can sustain the record backlog.
What to Watch in Coming Quarters
The reaffirmed fiscal 2027 guidance sets a baseline, yet several variables will influence investor confidence. Backlog conversion is the most immediate factor. Management expects 30% to 35% of the $561.3 million backlog to turn into sales over the next twelve months, with the balance stretching across multiple years. The pace and composition of that conversion will shape both revenue growth and margins.
Margin durability is another point to monitor. The second-quarter gross margin of 28.2% benefited from favorable Space and Defense mix plus efficiency gains. Investors will track whether those improvements persist as lower-margin Defense material receipts and larger programs move through the results.
Finally, successful integration of FlackTek and continued progress in Space and New Energy markets, including small modular reactor opportunities, represent meaningful growth drivers. Softness in large Energy & Process projects tied to geopolitical uncertainty remains a potential offset. Order trends, the book-to-bill ratio, and any guidance updates will be central to the next phase.
Using AI Tools for Deeper Analysis
I often turn to Tickeron’s AI Screener when reviewing companies like Graham Corporation to compare fundamentals and technical signals across the defense and industrial space. The platform lets me quickly filter for similar names and spot patterns that might otherwise take hours to uncover manually. It has become a regular part of my workflow for staying organized on names with complex backlog dynamics.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
Momentum Indicator for GHM turns positive, indicating new upward trend
GHM saw its Momentum Indicator move above the 0 level on October 29, 2026. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 101 similar instances where the indicator turned positive. In 89 of the 101 cases, the stock moved higher in the following days. The odds of a move higher are at 88%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where GHM's RSI Oscillator exited the oversold zone, 12 of 16 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 75%.
The Moving Average Convergence Divergence (MACD) for GHM just turned positive on October 28, 2026. Looking at past instances where GHM's MACD turned positive, the stock continued to rise in 37 of 42 cases over the following month. The odds of a continued upward trend are 88%.
Following a +5.67% 3-day Advance, the price is estimated to grow further. Considering data from situations where GHM advanced for three days, in 249 of 304 cases, the price rose further within the following month. The odds of a continued upward trend are 82%.
GHM may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 4 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The 50-day moving average for GHM moved below the 200-day moving average on October 16, 2026. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where GHM declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 68%.
The Aroon Indicator for GHM entered a downward trend on November 02, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 12 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of 39 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Profit vs. Risk Rating rating for this company is 46 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 74, placing this stock slightly better than average.
The Tickeron Price Growth Rating for this company is 64 (best 1 - 100 worst), indicating fairly steady price growth. GHM’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 78 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 88 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (4.245) is normal, around the industry mean (4.084). P/E Ratio (65.585) is within average values for comparable stocks, (38.189). Projected Growth (PEG Ratio) (2.511) is also within normal values, averaging (1.879). Dividend Yield (0.006) settles around the average of (0.032) among similar stocks. P/S Ratio (3.693) is also within normal values, averaging (186.943).
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Advertisement
General Information
a manufacturer of vacuum and heat transfer equpiment
Industry IndustrialMachinery
Advertisement