POWL Stream

POWL Current Analysis

Most recent update June 5, 2025

6/5/2025.

POWL⁠

Price at 6/5/2025: $182.60

Date of Idea & Source: 6/5/2025. Joe Presti, from one of his friends who uses stock charts. Presti’s friend says the chart is forming a base that looks like it is attractive to buy.

Current Analysis at 6/5/2025: Unchanged from Preliminary Analysis.

Preliminary Conclusion at 6/5/2025: POWL initiated a BUY.

What would convince me to buy POWL at 6/5/2025: Evidence of new large sales to LNG and/or Utility customers.

Where to look for more information at 6/5/2025: Liquid Natural Gas operators. (1) Read PWOL’s SEC filings to seek clues as to possible new LNG / Utility deals, eg any new or existing BoD members who are also on the BoD of an LNG company; (2) Review LNG / Utility earnings calls for clues on potential new facilities - of there are members of POWL’s BoD sit on board of LNG / Utility companies, those would be the first to start evaluating.

Preliminary Analysis at 6/5/2025:

Positives

Over the last several years sales, earnings and gross margins have grown considerably.

Notably, so has the stock price, even though the P/E ratio has been declining.

The stock has a small float and a high short interest, making it attractive.

Price of approximately $180 per share is half of the 52-week high in excess of $360 per share.

Negatives

Concentration of customers in Oil & Gas, particularly LNG, when the price per barrel is approximately $60 and Oil & Gas companies may be looking to postpone or terminate longer term investments.

Despite price of approximately $180 per share being half of the 52-week high in excess of $360 per share, buying on 6/6/2025 is still in the parabolic portion of the chart; stock price was $24.67 end of October 2022, $83.61 end of November 2023, and crossed to the over $154 level in January 2024.

On the May 7, 2025-earnings call for the quarter ended March 31, 2025, Management stated that they had a $1.3 billion backlog, revenue was visible for the next 2.5 years, meaning approximately $520 mm per year, compared to the approximate $1.0 bn revenue for fiscal year end September 30, 2024 and trailing 12 months revenue of the same amount.

The book to bill was only 0.9 X and they expected only an incremental 2% to 4% revenue growth from recent bookings.

When asked about a stock buyback or M&A, the company “signaled” that they are really talking about a 3-year factory build, which would require significant capital, implying no significant stock buyback or M&A.

Technically, the stock has been basing between $155 and $200 since March 3, 2025 to June 5, 2025. This industrial electrical product and provisioning company has shown strong sales and earnings growth with expanding gross margins over the last several years. The stock is prices around $180 per share versus a year and all time high of $364.98 [11/20/2024]. The P/E ratio is declining, from 30.19 at end of FY 2021 to 12.47 at end of FY 2024, and end of 3/31/2025. Meanwhile, the shares outstanding and float are small, 12.1 and 9.4, respectively, with a short interest of 18.92%.

We guess that the stock is off the all-time high, because of the 4.99% projected EPS growth in the next years, which is materially slower than the 15+% for the latest fiscal year, and approximately 40% of the sales are concentrated in oil, which appears at risk with a low price per barrel and recession threats.

What might be next at 6/5/2025:

Expected earnings sometime around July 8, 2025.

Expect announcement on a possible 3-year factory build.

Possible retirement of segregation of HR / IT duties, because Callahan is 67 years old.

Possible addition to BoD of director with direct utility ties.

Summary at 6/5/2025: Founded in 1947; Headquartered in Houston, TX and employing 3,187 people, POWL develops, designs, manufacturers and provisions custom electrical products and systems, including power room controls, electrical houses, and switch and control gear.

Financials at 6/5/2025: POWL generated $1.51, $0.05, $1.15, $4.50, $12.29 $14.24 in fiscal years, ending September 30, 2020, 2021, 2022, 2023 and 2024, and the trailing twelve months at 3/31/2025 on $518 mm, $470.6 mm, $532.6, $699.3, $1,012.4 mm and $1,083.29 mm in revenue. Gross margin was 18.2%, 15.92%, 15.96%, 21.10%, 26.98% and 28.17% for those same periods. Cash flows from operations were $72.39, -$30.46, -$3.58, $182.55, $108.66, and $67.25 for those same periods. -$17.54, -$2.46, $6.46, -$26.57, -$21.87, -$12.77 and -$6.06 for those same periods. POWL has very low debt. Share count is 12.1 mm with 9.4 mm in the float. Short ratio, meaning the days of average volume required to eliminate all short positions, is 5.21, short interest, meaning the number of shares sold short, is 1.78 mm shares, and the short ratio, meaning the percentage of shares sold short, is 18.92%.

Chart Narrative at 3/5/2025: The stock has been basing between $155 and $200 since March 3, 2025 to June 5, 2025. During the last twelve months, the stock has declined following each of the earnings reports. The 52-week high was $364.98 and the 52-week low was $127.01. The five and ten-year lows were $18.81 on April 11, 2022 and $15.62 on March 18, 2020.

Longer term, since about 1984 and through 1989, the stock was in the $4 to $5 range. From 1991 to about 2001, the stock ranged between $9 and $13. From early 2001, right up to the great recession in 2009, POWL stock had a significant up and to the right chart from $30 to $49. POWL sold off in the great recession of 2009, but resumed its up and to the right pattern to a high around $65. However, it sold off in 2015 and was range-bound from a low of mid 20s to mid 30s through 2023. Since then, POWL has been parabolic from $31 to a high around $365 and is currently $180.

Bullet Points from Earnings Call May 7, 2025 for Period End March 31, 2025

Management says, “close outs,” which are good for gross margin are seasonal, with higher close outs in the second half of the year, which is incrementally positive for POWL.

Management says the recent quarters’ bookings should be accretive to revenue growth in the amount of $20 mm to $40 mm in annual revenue for 2026, which represents under 2% to under 4% of total revenue. Note, the book to bill ratio was 0.9.

Highlighted the growth in concentration of sales to utilities - 25% to 30%.

Noted that including sales to utilities, POWL estimates that data centers have grown from 6% of sales to about 15% of sales but also notes that Liquid Natural Gas facility projects are much larger dollar value projects.

Management & Director Notes at 6/5/2025

Management: Brett Cope, age 56, CEO since 2009; no other data in 10-K; Michael Metcalf, CFO, aged 57, since 2018, Robert B. Callahan, age 67, VP HR and IT.

Directors: Chair - Brett Cope;

Aliana K. Brooks⁠

Counsel for Enlink Midstream LLC since 2008 and two big law firms since 2000;

Christopher E. Cragg⁠

(2008) Chair of Audit Committee. Oil States, UMC Petroleum and Sr, Mgr at PWC;

Katheryn B. Curtis⁠

(2020) various positions at Dominion Energy since before 2014;

James W. McGill⁠

(2018) 40 years at Eaton Corporation;

Mohit Singh⁠

(no date appointed) I-banker at GS and RBC, then worked in corporate development at a subsidiary of Expand, Chesapeake and BP, ;

John D. Stacey⁠

(2020) Currently Director at Harmen, subsidiary of Samsung, serves on BoD of THRM; previously worked in HR at Labbatt and Inbev;

Richard E. Williams⁠

(2016), formerly at Shell.

Sells to

Oil, gas and liquid natural gas facilities.

Utilities

Data centers

Competes against

ABB, Eaton, Schneider, and Siemens Industries, Inc.

Description

POWL develops, designs, manufactures, and provides services pertaining to custom-engineered large scale, industrial electrical system products and systems. POWL’s products include integrated power control room substation, custom-engineered modules, electrical houses, traditional and arc-resistant distribution switch gear and control gear, medium-voltage circuit breakers, monitoring and control communications systems, motor control centers and bus duct systems. POWL was founded by William E. Powell in 1947, is headquartered in Houston, TX and had approximately 3,187 employees around May 2025.

Links

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Finviz quote for POWL⁠

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SEC page for POWL⁠

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