Powell Industries misses Q1 revenue estimates

Overview

• Electrical solutions provider's fiscal Q1 revenue rose 4% yr/yr but missed analyst expectations

• New orders in fiscal Q1 surged 63%, driven by data center and LNG projects

• Fiscal Q1 net income rose 19% yr/yr, driven by strong project execution

Outlook

• Powell Industries expects strong order activity in Electric Utility market to continue

• Company anticipates increased LNG market activity after subdued period

• Powell sees opportunities in data center market due to AI investment

Result Drivers

• PROJECT EXECUTION - Powell attributed strong Q1 results to solid project execution, achieving a gross margin of 28.4% despite seasonality

• ORDER ACTIVITY - High levels of order activity, particularly in Commercial & Other Industrial markets, boosted Q1 results

• MEGAPROJECTS - First megaproject order in data center market and large LNG award supported Q1 growth

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the electrical components & equipment peer group is "buy"

• Wall Street's median 12-month price target for Powell Industries Inc is $399.50, about 9.3% below its February 2 closing price of $440.36

• The stock recently traded at 28 times the next 12-month earnings vs. a P/E of 26 three months ago

Press Release: ID:nGNX5Nqr78

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