Woodward Inc. Common Stock (WWD)

FairStock Score: 48/100 — MIXED

Key Financials

Strengths

• Generates $253 million in annual free cash flow (1.2% yield on market cap)
• High return on equity of 20.4% demonstrating efficient capital deployment
• Conservative balance sheet with debt-to-equity of just 0.36, providing financial flexibility
• Altman Z-Score of 7.7 confirms minimal bankruptcy risk and strong solvency
• Revenue growth of 28.9% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($88) with negative 313% margin of safety—limited downside protection

AI Analysis

Woodward Inc. Common Stock is a mid-cap industrials company valued at $21.6 billion. The business generates $3.8 billion in annual revenue with a 3.5% net margin and $253 million in free cash flow. From a quality standpoint, Woodward shows Altman Z-Score of 7.7 confirms fortress-level solvency and strong 20% ROE. On valuation, the stock is commanding a steep 46.3x multiple, with trades far above its Graham Number ($88) with no margin of safety. Growth dynamics show revenue growing at 28.9% and profit growth of 53.5%. Our composite FairStock Score of 49/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Woodward's 29% revenue growth trajectory could accelerate as it captures additional market share in the industrials sector. With $253 million in annual free cash flow (1.2% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 46x 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