Powell Industries, Inc. (POWL)
Valuation Overview•Is Powell Industries, Inc. Overvalued or Undervalued?
Priced at a premium to peer multiples and intrinsic cash flows, demanding strong execution to justify current levels.
High-quality fundamentals with a strong composite quality score of 80/100, backed by robust profitability and solvency.
Analysts remain cautious, with consensus price targets indicating limited room for upside expansion.
Verdict: High-quality compounder, with profitability as the only relative weakness.
Wall Street is cautious, forecasting potential downside with steady expected earnings growth. However, capital return yields remain modest, anchored by a strong, well-covered dividend yield.
POWL demonstrates strong business quality with robust profitability and healthy margins (highlighted by a massive 90.6% ROIC). This is backed by a fortress balance sheet, holding significant net cash ($449M) and minimal debt risk.
The company is driving exceptional top-line expansion (27.5% 3Y CAGR) paired with highly explosive earnings growth (134.7% EPS 3Y CAGR). The company maintains healthy operational efficiency with a 19.8% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $296.6M | +9.1% | +27.5% | +16.3% | +5.3% | |
| EBITDA | $59.8M | — | +138.4% | — | — | |
| Net Income | $45.9M | +20.6% | +136.1% | — | +34.3% | |
| EPS (Diluted) | $1.26 | +20.9% | +134.7% | +59.9% | +34.1% | |
| Free Cash Flow | $0.00 | +60.1% | — | +18.1% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 30.1% | 25.8% | 21.9% | 19.1% |
| Operating Margin | 19.8% | 15.4% | 9.6% | 5.0% |
| Net Margin | 16.5% | 13.0% | 8.3% | 4.6% |
| FCF Margin | 12.6% | 16.2% | 8.1% | 8.0% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $1.34 | $1.25 | -6.7% | ||
| Q1'26 | $0.95 | $1.13 | +18.9% | ||
| Q4'25 | $3.78 | $4.22 | +11.6% | ||
| Q3'25 | $3.73 | $3.96 | +6.2% | ||
| Q2'25 | $3.34 | $3.81 | +14.1% | ||
| Q1'25 | $2.61 | $2.86 | +9.6% | ||
| Q4'24 | $3.55 | $3.77 | +6.2% | ||
| Q3'24 | $2.12 | $3.79 | +78.8% |
Total return is +398.9% (1Y), outperforming the benchmark by +373.9%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +153.1% | +143.8% | — |
| 1Y | +398.9% | +373.9% | +0.6% |
| 3YCAGR | +147.3% | +126.8% | +5.4% |
| 5YCAGR | +94.2% | +79.6% | +27.4% |
| 10YCAGR | +37.3% | +23.8% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Powell Industries, Inc. (POWL) valuation, health, and returns.
Powell Industries, Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. overvalued (implying -67.2% downside from DCF intrinsic value of $97.53)
Powell Industries, Inc. has multiple valuation anchors: DCF Intrinsic Value: $97.53 | Peer Relative Fair Value: $165.97 | Wall Street Analyst Target: $237.67 (implying -20.0% upside). A convergence of these signals offers higher conviction.
Powell Industries, Inc. displays excellent financial health with a composite quality score of 80/100, supported by a Altman Z-Score of 16.8 (safe zone), Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 90.6%.
Powell Industries, Inc. does not return material capital to shareholders via dividends or share repurchases, electing to retain earnings to fund internal growth.
Powell Industries, Inc.'s current growth trajectory is Decelerating. The company achieved +9.1% 1Y revenue growth and +20.9% 1Y EPS growth, compared to its 3Y revenue CAGR of +27.5%.
Wall Street consensus is Hold based on 10 analysts, beating EPS expectations in 92% of recent quarters with a -1-quarter streak. The consensus price target represents a -20.0% change from current levels.
Investment risks for Powell Industries, Inc. include: -66.2% 1-year max drawdown, high beta (2.14x market volatility). Volatility risk is characterized by a beta of 2.14x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.