PLPC · Preformed Line Products
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $343.86
Note written ·
Price against the kill line
16.9% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $343.86, on record since 11 November 2026. The shares are down 39.8% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $343.86, just under the current 200-day average of closes, which would show the shares recovering their long-term trend and leading the S&P 500. Fourth-quarter 2026 net sales growth above the third quarter's 18% would also show the shares leading.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Industrials
Quarter to 30 September 2026, filed 29 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 210
- Revenue, change on a year (%)
- +17.6
- Gross margin (%)
- 33.4
- Operating margin (%)
- 11.9
- Free cash flow, four quarters ($M)
- 36.2
- Net cash, cash less debt ($M)
- 43.3
- Price to earnings (×)
- 23.8
- Enterprise value to sales (×)
- 1.8
All filed numbers
What Preformed Line Products reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 210 | +17.6 | 33.4 | 11.9 |
| first filed | 213 | +25.4 | 34.3 | 13.1 |
| first filed | 176 | +18.7 | 31.3 | 7.8 |
| first filed | 173 | +3.6 | 29.8 | 6.8 |
| first filed | 178 | +21.2 | 29.7 | 7.4 |
| first filed | 170 | +22.3 | 32.7 | 10.1 |
| Pre-tax income ($M) | 25.6 |
| Net income ($M) four quarters: 58.5 | 18.0 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +2.7 |
| Operating cash flow ($M) | 90.0 |
| Capital spending ($M) | 53.8 |
| Free cash flow ($M) | 36.2 |
| Cash and short-term investments ($M) | 99.3 |
| Debt ($M) long-term debt plus short-term bank loans | 55.9 |
| Net cash, cash less debt ($M) | 43.3 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 137 |
| Inventory ($M) | 161 |
| Shareholders' equity ($M) | 513 |
| Market value ($M) | 1,395 |
| Enterprise value, market value plus net debt ($M) | 1,352 |
| Enterprise value to sales (×) | 1.8 |
| Enterprise value to operating income (×) | 17.3 |
| Price to earnings (×) | 23.8 |
| Price to book value (×) | 2.7 |
| Free-cash-flow yield (%) | 2.6 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 2.9% of shares outstanding sold short, 2.0 days of average trading to cover, +2.6% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $2.1M |
| 12 monthsfrom | $0 | $3.0M |
The thesis
Preformed Line Products' grid-equipment demand is real, but the shares are more likely to lag the S&P 500 over the next three months. Third-quarter 2026 sales of $209.5 million missed the $215.0 million consensus estimate, and the fourth-quarter 2026 report, expected around February 2027, settles whether sales growth and a 33% gross margin hold.
The company reported on 28 October 2026 net sales up 18% from $178.1 million a year earlier, gross margin of 33.4% (up 370 basis points) and diluted earnings per share (EPS) of $3.56 against a $3.37 estimate. The sales miss, not the profit beat, drove the reaction: Zacks reported the shares lost 16.7% after the release.
The shares have since rebounded from $252.03 on 5 November 2026 to $301.00 on 11 November 2026, and closed at $293.82 on 12 November 2026. That close is still 41.8% below the 52-week intraday high of $504.69 set on 12 August 2026, and the price context's three-month change is –36.7%. The price already reflects the third-quarter sales miss and most of the unwinding of the summer rally.
Both moving averages are above the last close. The 50-day average of closes is $369.89 and the 200-day average is $344.09 as of 12 November 2026.
Bullish and bearish views on Preformed Line Products Company
The bull case on Preformed Line Products Company (PLPC), in brief: earnings beat on higher margin. The bear case: sales missed and slipped from the second quarter.
Bull case
- Earnings beat on higher margin. Third-quarter diluted EPS was $3.56 against a $3.37 estimate, with gross margin of 33.4%, per the company's 28 October 2026 release. Net income was $18.0 million.
- US utility demand continues. PLP-USA net sales exceeded $100 million for a second straight quarter, driven mainly by transmission and distribution markets, per the release. Nine-month net sales rose 21% to $598.5 million.
- Cash generation improved. Operating cash flow rose 95% in the third quarter from a year earlier and reached $68.1 million for the nine months, per the release. Cash was $99.3 million with $53.9 million of available credit at 30 September 2026.
- Asia-Pacific and acquisition add volume. Asia-Pacific sales grew 17% in constant currency on energy volumes, and the Americas segment rose 7% with help from the May 2026 Delta Star acquisition, per the release.
- Dividend keeps rising. The company declared $0.21 per share for the third quarter of 2026, up from $0.20 a year earlier, per the release.
Bear case
- Sales missed and slipped from the second quarter. Third-quarter sales of $209.5 million compare with $212.7 million in the second quarter of 2026 and a $215.0 million consensus estimate (company news, 28 October 2026). Growth of 18% is below the 25% of the second quarter.
- Gross margin slipped from the second quarter. The 33.4% margin compares with 34.3% in the second quarter, per the company's quarterly releases. Net income, not sales, carried the beat.
- Tariffs still weigh on net income. The 28 October 2026 release said tariff headwinds continued to affect net income, and nine-month tariff expenses were higher than a year earlier.
- A 10% owner has been selling. Randall M. Ruhlman reported an open-market sale of 5,142 shares at an average of $407.57 between 4 September 2026 and 8 September 2026, per an SEC Form 4 filed 9 September 2026.
- No guidance and a thin share count. The company issues no forward revenue or EPS guidance, and 4.89 million shares were outstanding at 28 August 2026, so single sessions can move the price sharply.
Price setup
The shares closed at $252.03 on 5 November 2026 and $261.98 on 6 November 2026. They then rose to $284.42 on 9 November 2026, $285.27 on 10 November 2026 and $301.00 on 11 November 2026, before closing at $293.82 on 12 November 2026.
The 52-week closing low was $186.26 on 20 November 2025. The 52-week intraday high of $504.69 came on 12 August 2026, and the close of $464.63 on 14 August 2026 is the three-month reference point.
The 200-day average of $344.09 is the nearest overhead level in the adjusted closes. The 50-day average of $369.89 sits above it. A rebound that stalls below the 200-day average would fit a lag; a close above it would be the first sign the shares are leading again.
The 10-Q for the quarter ended 30 September 2026 was filed on 29 October 2026. No earnings report falls inside the next 30 days.
Catalysts ahead
- 20 November 2026: Deadline for shareholder proposals for the 2027 annual meeting. A minor governance date; it does not test the earnings case.
- ~10 December 2026 (est.): Quarterly dividend announcement; last year's came on 11 December 2025. Shows whether management keeps raising the payout after a third-quarter sales miss.
- ~February 2027 (est.): Fourth-quarter and full-year 2026 results. Settles whether sales growth stays near 18% and gross margin holds near 33% after the third-quarter miss.
What would change the view
A daily close above $343.86, just under the current 200-day average of closes, which would show the shares recovering their long-term trend and leading the S&P 500. Fourth-quarter 2026 net sales growth above the third quarter's 18% would also show the shares leading.
What it trades with
The shares trade with US utility transmission and distribution spending and with other small-cap grid equipment makers. The company was removed from the Russell 2000 Value and Russell 3000 Value indexes in the June 2026 reconstitution, which ended index-driven buying from those benchmarks.
Currency matters in every quarter: foreign currency translation added $3.1 million to third-quarter 2026 net sales, per the company's release. Operations in Poland, Brazil and Australia tie reported results to non-US utility budgets as well.
The evidence, claim by claim (8)
- Q3 2026 net sales were $209.5 million, up 18% from $178.1 million; gross margin 33.4%, up 370 basis points; diluted EPS $3.56; net income $18.0 million. Preformed Line Products Q3 2026 earnings release · as of
- Q3 2026 net sales missed a $215.0 million consensus estimate while EPS of $3.56 beat a $3.37 estimate. Company news headlines, 28 October 2026 · as of
- Nine-month 2026 operating cash flow was $68.1 million; Q3 operating cash flow rose 95% from a year earlier. Preformed Line Products Q3 2026 earnings release · as of
- Cash was $99.3 million with $53.9 million of available credit at quarter end. Preformed Line Products Q3 2026 earnings release · as of
- The company said tariff headwinds continued to affect net income; Q3 2026 dividend declared was $0.21 per share versus $0.20 a year earlier. Preformed Line Products Q3 2026 earnings release · as of
- Shares fell 16.7% after the Q3 2026 report, against a 2.4% decline in the S&P 500. Zacks, PLPC stock declines 16.7% despite strong earnings growth in Q3 · as of
- Randall M. Ruhlman, a 10% owner, sold 5,142 shares at an average of $407.57 between 4 September 2026 and 8 September 2026. SEC Form 4 filed 9 September 2026 · as of
- The shares closed at $293.82 on 12 November 2026, 41.8% below the 52-week intraday high of $504.69 set on 12 August 2026. Split-adjusted daily closes · as of
Sources
- Preformed Line Products announces third quarter 2026 financial results · finviz.com
- Zacks
- Preformed Line Products Q3 revenue rises · capital.com
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