POWL · Powell Industries
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $172.86
Note written ·
Price against the kill line
17.4% 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 $172.86, on record since 11 November 2026. The shares are down 34.7% 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 $172.86, just over the 50-day average of closes, which would show the shares leading the S&P 500 again. Fiscal fourth-quarter revenue growth above the 9% of the third quarter with gross margin at or above 30.6% would also show it.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Technology
Quarter to 30 June 2026, filed 4 August 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 312
- Revenue, change on a year (%)
- +8.9
- Gross margin (%)
- 30.6
- Operating margin (%)
- 20.6
- Free cash flow, four quarters ($M)
- 244
- Net cash, cash less debt ($M)
- 634
- Price to earnings (×)
- 27.2
- Enterprise value to sales (×)
- 3.9
All filed numbers
What Powell Industries 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 ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 312 | +8.9 | 30.6 | 20.6 |
| first filed | 297 | +6.5 | 29.6 | 19.4 |
| first filed | 251 | +4.0 | 28.4 | 17.0 |
| first filed | 298 | +8.3 | 31.4 | 21.2 |
| first filed | 286 | −0.7 | 30.7 | 21.0 |
| first filed | 279 | +9.2 | 29.9 | 21.1 |
| Pre-tax income ($M) | 69.1 |
| Net income ($M) four quarters: 191 | 52.2 |
| Diluted shares, change on a year (%) against the quarter to 30 June 2025 | +0.2 |
| Operating cash flow ($M) | 256 |
| Capital spending ($M) | 12.2 |
| Free cash flow ($M) | 244 |
| Cash and short-term investments ($M) | 634 |
| Debt ($M) | None reported |
| Net cash, cash less debt ($M) no debt reported | 634 |
| Deferred revenue ($M) +55.7% on a year | 466 |
| Backlog, orders not yet delivered ($M) +71.4% on a year | 2,400 |
| Receivables ($M) | 362 |
| Inventory ($M) | 95.4 |
| Shareholders' equity ($M) | 756 |
| Market value ($M) | 5,200 |
| Enterprise value, market value plus net debt ($M) no debt reported | 4,566 |
| Enterprise value to sales (×) no debt reported | 3.9 |
| Enterprise value to operating income (×) no debt reported | 20.1 |
| Price to earnings (×) | 27.2 |
| Price to book value (×) | 6.9 |
| Free-cash-flow yield (%) | 4.7 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 8.6% of shares outstanding sold short, 4.9 days of average trading to cover, +15.7% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $1.1M |
| 12 monthsfrom | $0 | $69.5Mand 1 trade without a stated price |
The thesis
Powell Industries' shares are more likely to lag the S&P 500 over the next three months. The record $2.4 billion backlog is real, but revenue has grown far more slowly than orders, and the shares closed at $141.77 on 12 November 2026, down 33.6% over three months. The fiscal fourth-quarter and full-year report, due after the market closes on 16 November 2026, settles whether orders are turning into revenue.
Powell reported fiscal third-quarter orders of $934 million, a book-to-bill ratio (orders divided by revenue) of 3.0 times, backlog of $2.4 billion up 69% from a year earlier, and revenue of $312 million up 9% from a year earlier (company release, 3 August 2026). The year-earlier fiscal fourth quarter produced revenue of $297.98 million, up 8.3% from a year before that (RTTNews). That is the base the 16 November 2026 report is measured against.
The shares bounced after the 5 November 2026 close of $125.06, and closed at $141.77 on 12 November 2026. They remain 56.8% below the 52-week intraday high of $328.00 set on 11 May 2026. The consensus target of $187.92 (MarketBeat, 22 October 2026) sits above the last close, so the market already prices in slower conversion than the order headline implied.
Bullish and bearish views on Powell Industries, Inc.
The bull case on Powell Industries, Inc. (POWL), in brief: orders provide a long conversion runway. The bear case: revenue trails bookings.
Bull case
- Orders provide a long conversion runway. Backlog reached $2.4 billion at 30 June 2026 on $934 million of fiscal third-quarter orders. Revenue grew 9% in that quarter, so later quarters carry the work.
- A large data-center award sits in backlog. Powell disclosed a behind-the-meter data-center order above $400 million within third-quarter bookings on 3 August 2026.
- Margins held while orders surged. Gross profit was $95.3 million, a 30.6% gross margin, for the quarter ended 30 June 2026.
- Cash is ample. Cash and short-term investments totaled $633.6 million at 30 June 2026, and Powell declared its regular quarterly cash dividend on 3 November 2026.
- Analysts still carry positive ratings. JPMorgan kept Overweight on 13 October 2026 with a $250 target, cut from $300. MarketBeat's consensus target was $187.92 on 22 October 2026.
Bear case
- Revenue trails bookings. Fiscal third-quarter revenue rose 9% while orders rose 158% (company release, 3 August 2026). Fiscal fourth-quarter growth at or below 9% with flat or higher backlog would leave conversion unproven.
- Earnings missed in the last report. Third-quarter earnings per share were $1.42 against $1.49 expected, and revenue was $311.74 million against $316.70 million expected (MarketBeat, 22 October 2026).
- Analyst targets keep falling. JPMorgan cut its target from $300 to $250 on 13 October 2026. Cantor Fitzgerald cut to $235 from $320 on 14 August 2026 and kept Neutral.
- Insiders have sold into the decline. Corporate Controller Ping Ni sold 700 shares at $167.14 on 16 October 2026, and Vice President of R&D William Mauney sold 301 shares at $187.67 on 30 September 2026 (SEC Form 4 filings).
- One award concentrates execution risk. The data-center order above $400 million is a large part of the quarter's $934 million of orders. A cancellation or deferral would cut directly into backlog.
Price setup
The shares closed at $141.77 on 12 November 2026, against $213.48 on 14 August 2026, the close three months earlier. The 52-week intraday high is $328.00 (11 May 2026) and the 52-week closing low is $94.02 (21 November 2025).
The 50-day average of closes was $172.28 and the 200-day average was $213.29 on 12 November 2026. The last close sits below both, and the 50-day average is the nearest overhead level.
Closes in the past week ran $125.06 (5 November 2026), $133.12 (6 November 2026), $141.65 (9 November 2026), $138.21 (10 November 2026), $145.90 (11 November 2026) and $141.77 (12 November 2026). The rebound has come ahead of the report, with no company announcement behind it.
Catalysts ahead
- 16 November 2026: Fiscal fourth-quarter and full-year 2026 results, after the market close. Backlog, book-to-bill, revenue growth and gross margin show whether the record order book is converting to revenue.
- 17 November 2026: Management conference call at 11:00 a.m. Eastern. Commentary on conversion timing of the data-center award above $400 million and on the order outlook.
What would change the view
A daily close above $172.86, just over the 50-day average of closes, which would show the shares leading the S&P 500 again. Fiscal fourth-quarter revenue growth above the 9% of the third quarter with gross margin at or above 30.6% would also show it.
What it trades with
Powell sells switchgear and power-control systems to utilities, industrial plants and data centers, so its orders follow grid spending and data-center construction. The October drop in the shares came alongside target cuts from JPMorgan and Cantor Fitzgerald. Powell's fiscal year ends 30 September 2026, so its fiscal fourth quarter does not match the calendar fourth quarter.
The evidence, claim by claim (7)
- Fiscal third-quarter orders were $934 million, book-to-bill 3.0 times, and backlog reached $2.4 billion, up 69% from a year earlier. Powell fiscal third-quarter 2026 earnings release · as of
- Fiscal third-quarter revenue was $312 million, up 9% from a year earlier; gross margin was 30.6%. Powell fiscal third-quarter 2026 earnings release · as of
- Cash and short-term investments totaled $633.6 million at the end of the fiscal third quarter. Powell fiscal third-quarter 2026 earnings release · as of
- JPMorgan kept Overweight on Powell and cut its price target from $300 to $250. MarketBeat, analyst action reported 13 October 2026 · as of
- Powell will report fiscal fourth-quarter and full-year 2026 results after the market close on 16 November 2026, with a call on 17 November 2026 at 11:00 a.m. Eastern. Powell press release via GlobeNewswire · as of
- Corporate Controller Ping Ni sold 700 shares at $167.14 on 16 October 2026. SEC Form 4 filed 20 October 2026 · as of
- Powell closed at $141.77 on 12 November 2026, down 33.6% over three months and 56.8% below the quoted 52-week high of $328.00. Daily closes · as of
Sources
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