Investment Thesis
Graham Corp demonstrates exceptional revenue growth (35,903% YoY) with positive profitability, but the dramatic increase raises concerns about data quality or unusual one-time events. Modest profitability margins (5.9% net margin), weak liquidity (1.06x current ratio), and low free cash flow conversion (1.5% FCF margin) suggest operational challenges despite top-line growth.
Strengths
- Zero long-term debt and strong balance sheet with no leverage risk
- Positive operating cash flow of $16.1M and profitable operations with 10.5M net income
- Significant revenue expansion to $178.2M providing scale and market presence
Risks
- Anomalous 35,903% revenue growth suggests data anomaly, acquisition event, or one-time revenue recognition requiring clarification
- Weak liquidity position with current ratio of 1.06x and quick ratio of 0.75x limiting financial flexibility
- Poor free cash flow conversion at 1.5% FCF margin and capital intensity (CapEx $13.5M) limiting reinvestment capacity
Key Metrics to Watch
- Revenue sustainability and organic growth rate in subsequent periods
- Free cash flow generation and working capital management
- Operating margin stability and cost structure efficiency
Financial Metrics
Revenue
178.2M
Net Income
10.5M
EPS (Diluted)
$0.95
Free Cash Flow
2.6M
Total Assets
292.9M
Cash
22.3M
Profitability Ratios
Gross Margin
23.8%
Operating Margin
6.9%
Net Margin
5.9%
ROE
8.0%
ROA
3.6%
FCF Margin
1.5%
Balance Sheet & Liquidity
Current Ratio
1.06x
Quick Ratio
0.75x
Debt/Equity
0.00x
Debt/Assets
55.2%
Interest Coverage
N/A
Long-term Debt
0.0
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-25T20:40:11.335207 |
Data as of: 2025-12-31 |
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