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ZYBERNO

Stock Report

Updated Aug 31, 2026

GRAHAM CORPORATION (GHM)

Technology • NYSE

$86.08

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

51.0/100

AVERAGE BUSINESS

GRAHAM CORPORATION (GHM) scores 51/100 — decent metrics but limited evidence of durable competitive advantage.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full GHM quality analysis & detailed breakdown

VALUATION SIGNAL

MARGIN OF SAFETY

Is this stock cheap or expensive relative to what the business has historically generated for owners?

Margin of Safety unavailable — insufficient data for the owner-earnings DCF.

BRINA GAP ↗

Is the market underestimating or overestimating what this business is capable of going forward?

-2.4%

Fairly Priced

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full GHM valuation analysis · → View full GHM Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):AVERAGE (10.1%)

Debt-to-Equity (Solvency Risk):EXCELLENT (0.06x)

Operating Margin (Operational Efficiency):POOR (6.6%)

Return on Capital (Capital Efficiency):POOR (9.0%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

GRAHAM CORPORATION (GHM) stock report — Zyberno Score 51/100 (AVERAGE BUSINESS). Full financial analysis on Zyberno.

According to Zyberno's DCF model, GRAHAM CORPORATION (GHM) shows a Brina Gap of -2.4%, which weakens the case: based on the company's ROIC (9.0%) and reinvestment rate (229.9%), the business can fundamentally grow at 20.6% — but the current enterprise value implies the market expects 23.1%.

Over the trailing twelve months, GHM generated -$4.35M in Owner Earnings. Capital was deployed as follows: $44.00K returned via share buybacks, $16.09M invested in capital expenditures. Reinvestment rate: 229.9%.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:86.08

Market Cap:$998.27M

Valuation Multiples (4)

P/E Ratio:

67.25x

📊 Click to view full GHM P/E analysis →

P/B Ratio:5.19x

P/S Ratio:4.00x

Peg Ratio:5.07x

Enterprise Metrics (2)

Enterprise Value:$978.07M

Ev Ebitda Ratio:40.07x

Price Action & Momentum (3)

12-1 Momentum:

+82.5% (95th pctile)

📈 Click to view full GHM Momentum analysis →

Momentum Percentile:95 / 100

% of 52-Week High:68.4%

B. Profitability Assessment

Return Metrics (7)

ROE:

10.1%

📊 Click to view full GHM ROE analysis →

ROA:4.8%

Roic:

9.0%

📊 Click to view full GHM ROIC analysis →

Reinvestment Rate:229.9%

Fundamental Growth Rate (g):20.6%

Market-Implied Growth Rate:23.1%

Brina Gap:

-2.4%

☷ Click to view full GHM Brina Gap analysis →

Margin Analysis (3)

Operating Margin Ttm:6.6%

Net Margin Ttm:5.8%

Ebitda Margin:9.8%

TTM Performance (3)

Gross Margin Ttm:24.2%

Operating Margin Ttm:6.6%

Net Margin Ttm:5.8%

Yield Metrics (2)

Earnings Yield:$1.49

Dividend Yield:0.0%

C. Log-Linear Regression Growth Trends

Earnings Surprise (SUE) (3)

Earnings Surprise (SUE):

-0.06

📊 Click to view full GHM Earnings Surprise analysis →

EPS Surprise vs Expected:-4.6%

Latest Earnings Filed:2026-08-06

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):20.1%

Earnings Growth (Linear) (1)

Net Income Growth Rate (Linear):47.1%

Cash Flow Growth (Linear) (2)

Free Cash Flow Growth Rate (Linear):16.9%

Operating Cash Flow Growth Rate (Linear):26.8%

Operating Growth (Linear) (1)

Operating Income Growth Rate (Linear):17.2%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:1.23x

Quick Ratio:0.92x

Cash Ratio:0.17x

Leverage Analysis (3)

Debt To Equity Ttm:0.06x

Debt-to-Equity Ratio:0.06x

Debt To Ebitda:0.28x

Coverage Ratios (2)

Interest Coverage Ratio:28.12x

Times Interest Earned:28.12

Capital Structure (4)

Working Capital:37,255,000.00

Cash And Cash Equivalents:26,953,000.00

Long Term Debt:$4.95M

Net Debt:-$20.20M

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $249.56M

Linear Growth: 20.1%

📊 Click to view full GHM Revenue analysis & methodology →

Cost Of Revenue Ttm:$189.26M

Profitability Breakdown (2)

Gross profit TTM: $60.30M

Linear Growth: 39.8%

📊 Click to view full GHM Gross Profit analysis & methodology →

Operating income TTM: $16.51M

Linear Growth: 17.2%

📊 Click to view full GHM Operating Income analysis & methodology →

Bottom Line Performance (3)

Net income TTM: $14.44M

Linear Growth: 47.1%

📊 Click to view full GHM Net Income analysis & methodology →

Income Before Tax:$16.62M

Ebitda Ttm:24,408,000.00

Operating Expenses (5)

Operating Expenses:0.00

R And D Expense:6,354,000.00

Sga Expense:41,869,000.00

Income Tax Expense:$2.18M

Interest Expense:534,000.00

Expense Ratios (3)

R And D To Revenue Percentage:8.9%

Sga To Revenue Percentage:58.7%

Ebitda Margin:9.8%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$363.96M

Current Assets:$198.38M

Ppe Net:60,747,000.00

Goodwill:37,326,000.00

Intangible Assets:$37.71M

Liability Structure (4)

Total Liabilities:171,764,000.00

Current Liabilities:161,123,000.00

Long Term Debt:$4.95M

Short Term Debt:$1.80M

Equity & Capital (3)

Equity:$192.20M

Retained Earnings:$110.64M

Common Stock:25,500,000.00

Working Capital Items (3)

Accounts Receivable:49,750,000.00

Inventory:49,436,000.00

Accounts Payable:24,697,000.00

Special Items (2)

Contract Liabilities:113,135,000.00

Stock Based Compensation:645,000.00

C. Cash Flow Analysis

Operating Activities (2)

Operating cash flow TTM: $3.43M

Linear Growth: 26.8%

Free cash flow TTM: -$12.66M

Linear Growth: 16.9%

📊 Click to view full GHM Free Cash Flow analysis & methodology →

Investment Activities (2)

Investing Cash Flow:-$1.04M

Capital Expenditures Ttm:16,091,000.00

Financing Activities (3)

Financing Cash Flow:$34.04M

Dividends Paid Ttm:0.00

Stock Repurchase:44,000.00

Capital Transactions (3)

Common Stock Issuance:50,000,000.00

Long Term Debt Issuance:$0.00

Long Term Debt Repayments:$13.00M

Non-Cash Items (1)

Depreciation Amortization Ttm:7,897,000.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (3)

EPS (Basic TTM):1.30

Eps diluted TTM: $1.28

Linear Growth: 43.2%

📊 Click to view full GHM EPS analysis & methodology →

Earnings Per Share Ttm:$1.25

Revenue & Cash Per Share (2)

Sales Per Share Ttm:21.52

Operating Cash Flow Per Share:$1.37

Book Value & Capital (2)

Book Value Per Share:$16.57

Cash Per Share:2.32

Dividend Policy (1)

Dividend Payout Ratio:0.00x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:0.83x

Working Capital Turnover Ttm:6.70x

Receivables Management (2)

Receivables Turnover Ttm:5.02x

Days Sales Outstanding Ttm:72.76

Inventory Management (2)

Inventory Turnover Ttm:3.83x

Days Inventory Outstanding Ttm:95.34

Payables & Cash Cycle (2)

Days Payable Outstanding:47.63

Cash Conversion Cycle:120.47

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:80.00

Quality Score:90.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Owner Earnings Analysis (1)

-$4.35M

Damodaran Growth Analysis (4)

Reinvestment Rate:229.9%

Fundamental Growth Rate (g):20.6%

Market-Implied Growth Rate:23.1%

Brina Gap:

-2.4%

☷ Click to view full GHM Brina Gap analysis →

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (3)

Revenue Growth Rate (Linear):20.1%

Net Income Growth Rate (Linear):47.1%

Operating Income Growth Rate (Linear):17.2%

Cash Flow Growth Rates (2)

Free Cash Flow Growth Rate (Linear):16.9%

Operating Cash Flow Growth Rate (Linear):26.8%

Other Growth Rates (2)

Gross Profit Growth Rate (Linear):39.8%

Book Value Growth Rate (Linear):7.6%

C. Company Profile & Context

Corporate Information (6)

Symbol:GHM

Company Name:GRAHAM CORPORATION

Sector:Technology

Industry:General Industrial Machinery & Equipment

Exchange:NYSE

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:high

Volume Category:N/A

Share Structure (3)

Shares Outstanding:11.60M

Shares Outstanding Basic:11.60M

Shares Outstanding Diluted:11.71M

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-08-31 23:23:33 UTC

Data Timestamp:2026-08-31T23:23:33.411611