Graham Corporation Common Stock (GHM)

FairStock Score: 45/100 — MIXED

Key Financials

Strengths

• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Solid return on equity of 12.2% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.05, providing financial flexibility
• Altman Z-Score of 4.8 confirms minimal bankruptcy risk and strong solvency
• Revenue growth of 20.6% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($19) with negative 415% margin of safety—limited downside protection

AI Analysis

Graham Corporation Common Stock is a micro-cap industrials company valued at $1.1 billion. The business generates $238 million in annual revenue with a 1.2% net margin. From a quality standpoint, Graham shows solid Piotroski F-Score of 7/9 and healthy Altman Z-Score of 4.8. On valuation, the stock is commanding a steep 72.3x multiple, with trades far above its Graham Number ($19) with no margin of safety. Growth dynamics show revenue growing at 20.6% and profit growth of 79.2%. Our composite FairStock Score of 45/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Graham's 21% revenue growth trajectory could accelerate as it captures additional market share in the industrials sector. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

At 72x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer