Profit Outlook Concerns

Graham Corporation Reports Record FY26 Revenue and Orders; FY27 Profit Outlook Disappoints Investors

Graham Corporation reported strong fiscal 2026 results, including record Q4 revenue of $67.1 million (up 13% year over year) and full-year revenue of $245.3 million (up 17%), alongside record orders and a backlog of about $359 million and $532.6 million, respectively. The company also highlighted progress in converting its growing order book into earnings and pointed to added momentum from defense and space-related demand, supported by its FlackTek acquisition. For fiscal 2027, Graham projected revenue of $285 million to $295 million, but its adjusted EBITDA guidance of $35 million to $40 million (with a midpoint near $37.5 million) came in short of what some analysts expected. That profitability outlook disappointment helped drive a sharp early selloff, with the stock down roughly 14% to 16% in trading following the release. Despite the negative market reaction, several reports emphasized that the backlog and book-to-bill strength provide visibility for continued growth into FY27 if margins and execution improve. Valuation metrics discussed alongside the results suggest investors are already pricing in substantial future performance, which may have left less room for weaker-than-anticipated profitability guidance.

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