Gorman Rupp Co (GRC) stock analysis

P/E below its 5-year median

Gorman Rupp's P/E of 25.2 is below its own 5-year median of 30.3.

P/E below the industry

Gorman Rupp's P/E of 25.2 is below the General Industrial Machinery and Equipment median of 26.9.

EV/EBITDA above its 5-year median

Gorman Rupp's EV/EBITDA of 15.0 is above its 5-year median of 13.9.

P/B above the industry

Gorman Rupp's price-to-book of 4.03 is above the General Industrial Machinery and Equipment median of 2.84.

Trading above fair value

The share price of $70.44 is above our fair value estimate of $68.15.

Margin of safety under 20%

The price is 3.4% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 9.4% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings growth accelerating

Net income grew 46.7% over the last twelve months, against a 5-year average of 16.0% a year.

Growing slower than the industry

Revenue grew 6.5% over the last twelve months; the General Industrial Machinery and Equipment median is 12.4%.

Guidance raised

Gorman Rupp raised its full-year 2026 Capital expenditures outlook on Jul 24, 2026.

Gross margin improving

Gross margin was 32.5% over the last twelve months, against 30.4% a year earlier.

Return on equity under 15%

Return on equity was 17.0% over the last twelve months and averaged 9.5% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 13.5%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Gorman Rupp's return on equity of 17.0% is above the General Industrial Machinery and Equipment median of 9.9%.

Earnings grew over 5 years

Net income grew 16.0% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 10.2% over the last twelve months, against a 5-year average of 5.8%.

Net margin above the industry

Gorman Rupp's net margin of 10.2% is above the General Industrial Machinery and Equipment median of 8.0%.

High debt

Debt is 54.3% of shareholders' equity, above the 40% we consider low.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 51.9% of total debt.

Interest well covered

Operating income covers interest expense 6.0 times.

Short-term assets cover short-term debts

Current assets are 2.70 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.90; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Gorman Rupp paid dividends worth 1.1% of the share price over the last twelve months.

Yield below Treasuries

The 1.1% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Gorman Rupp yields 1.1%.

Dividend stability

Fewer than five years of dividend history.

Earnings cover

Needs dividends paid and net income.

Cash-flow cover

Needs dividends paid and free cash flow.