Graham (GHM) has wrapped up FY 2026 with fourth quarter revenue of US$67.1 million and basic EPS of US$0.18, while trailing twelve month revenue stood at US$245.3 million with basic EPS of US$1.14. Over recent periods, the company has seen quarterly revenue move between US$55.5 million and US$67.1 million, with basic EPS ranging from US$0.15 to US$0.42 and trailing twelve month EPS running between US$0.84 and US$1.36. This gives investors a clear view of how top line scale and per share earnings have tracked together. With trailing net profit margins sitting in the low single digits and easing compared with a year earlier, the story this season is focused on how those margins frame the balance between growth and earnings power.

See our full analysis for Graham.

With the latest headline numbers on the table, the next step is to set them against the most common market narratives around Graham to see which stories hold up and which need a rethink.

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13.5% revenue growth with softer 2.2% earnings gain

• Trailing twelve month revenue is US$245.3 million, growing at 13.5% per year, while trailing earnings growth over the latest year is 2.2% compared with a 62.9% per year average over five years.
• Analysts' consensus narrative points to that 13.5% revenue growth and forecasts of about 34.4% annual earnings growth. However, the recent 2.2% earnings increase and net margin at 5.1% versus 5.8% a year earlier highlight a gap between past multi year strength and the more modest recent trend.
  • Consensus expectations for margins to move from about 6.3% to 9.5% within three years sit against the latest reported 5.1% trailing margin, so investors can see that the recent margin level is below what those assumptions imply.
  • With trailing twelve month EPS at US$1.14, compared with consensus expectations for EPS of about US$2.85 by 2029, the current starting point helps you sanity check how much compounding is embedded in those forecasts.

High 93.8x P/E against 5.1% margin

• At a share price of US$100.28, the stock trades on a 93.8x P/E versus 26.8x for the US Machinery industry and 44.7x for peers, while trailing net profit margin is 5.1% compared with 5.8% a year earlier.
• Bears argue that this rich multiple and the share price sitting well above the DCF fair value of US$31.40 leave little room if growth underwhelms. The latest 5.1% margin and 2.2% earnings growth provide figures they can point to when questioning how much earnings power is currently in place.
  • The discounted cash flow estimate of US$31.40 is well below the US$100.28 share price, which lines up with the cautious view that a lot of future growth is already priced in.
  • With earnings growth over the last year at 2.2% compared with the five year 62.9% per year figure, recent performance gives bears a concrete data point when they argue that the historical pace is not showing up in the latest numbers.

For a deeper look at how skeptics frame this valuation gap and growth risk, check out how they set up the 🐻 Graham Bear Case.

Quarterly EPS stepped down through FY 2026

• Within FY 2026, quarterly basic EPS moved from US$0.42 in Q1 to US$0.28 in Q2, US$0.26 in Q3 and US$0.18 in Q4, even as quarterly revenue stayed in a band between US$55.5 million and US$67.1 million.
• Bulls point to the record US$500.1 million backlog and growth investments as the reason they still expect earnings to ramp from about US$13.7 million today to US$36.7 million by around 2028. However, the step down in quarterly EPS through FY 2026 gives a clear contrast between that optimistic path and the most recent run rate.
  • The bullish view references a backlog where 35% to 40% is expected to convert within 12 months, which sits beside the latest trailing twelve month net income of US$12.5 million and helps frame how much backlog conversion would need to translate into profit to hit those earnings targets.
  • Forecasts that earnings could reach US$36.7 million with EPS of US$3.16 assume profit margins rising from about 6.0% to 12.2%, so the current 5.1% trailing margin shows how early Graham is in that margin step up according to those assumptions.

If you want to see how bullish investors turn that backlog and margin story into a detailed thesis, walk through the 🐂 Graham Bull Case.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Graham on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With bulls and bears both making strong cases, it makes sense to look at the numbers yourself and see which story actually resonates. To understand what optimism is based on and where the potential upsides sit, take a closer look at the 2 key rewards.

Explore Alternatives

The company is carrying a high 93.8x P/E with modest 2.2% earnings growth, easing margins around 5.1%, and quarterly EPS trending lower through FY 2026.

If that mix of rich valuation and softer recent earnings leaves you cautious, take a few minutes to compare it with 46 high quality undervalued stocks that pair stronger value signals with more grounded expectations.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.