Dj Vp Mckertcher Sells 2100 Of Powell Industries Inc >Powl

Powell’s third quarter results surpassed Wall Street’s expectations for both revenue and earnings, yet the market responded negatively following the announcement. Management attributed the quarter’s performance to increased project execution, particularly in nonindustrial markets—such as Electric Utility and Commercial sectors—which now comprise a much larger share of backlog than five years ago. CEO Brett Cope described the quarter as a reflection of “the ongoing high level of project execution across all of our operations,” noting significant progress in diversifying beyond traditional oil and gas markets. The company also highlighted favorable gross profit margins driven by strong pricing discipline and operational throughput. However, some end markets, like oil and gas and petrochemicals, experienced softness, while the mix of projects shifted toward smaller and medium-sized orders rather than large-scale contracts.

Is now the time to buy POWL? Find out in our full research report (it’s free for active Edge members).

Powell (POWL) Q3 CY2025 Highlights:

• Revenue: $298 million vs analyst estimates of $292.8 million (8.3% year-on-year growth, 1.8% beat)
• Adjusted EPS: $4.22 vs analyst estimates of $3.78 (11.6% beat)
• Adjusted EBITDA: $59.06 million vs analyst estimates of $59.32 million (19.8% margin, in line)
• Operating Margin: 21.2%, in line with the same quarter last year
• Backlog: $1.4 billion at quarter end, up 7.7% year on year
• Market Capitalization: $3.63 billion

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Powell’s Q3 Earnings Call

• John Franzreb (Sidoti & Company) asked about changes in the competitive landscape and pricing. CEO Brett Cope explained that Electric Utility and data center markets are more demand-driven and less price sensitive, while certain oil and gas subsectors are “a little softer, a little bit more price sensitive.”

• Alfred Moore (ROTH Capital) questioned the timing behind the modest decline in Commercial and Other Industrial revenue. Cope attributed the decline to project timing, emphasizing that opportunities in the sector, particularly data centers, are “clearly growing.”

• Moore (ROTH Capital) sought more detail on sustainability of Electric Utility growth. Cope highlighted the company’s decade-long strategy in the sector and noted that demand is robust, with plans to “grab as much of that as we can.”

• Jon Braatz (Kansas City Capital) inquired about delays in LNG project final investment decisions. Cope acknowledged the slower pace but expressed confidence in the “very strong activity” and fundamentals supporting future LNG demand.

• Franzreb (Sidoti & Company) asked about the sustainability of margin gains from project closeouts. CFO Michael Metcalf responded that closeouts were heavier than usual in 2025 but expects continued strong execution and margin benefits into the next year.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will be monitoring (1) the pace at which Powell converts its growing backlog into revenue, especially in Electric Utility and data center segments; (2) the impact of the Jacintoport facility expansion on capacity and order fulfillment; and (3) early returns from the Remsdaq acquisition as Powell integrates automation offerings. The sustainability of margins and new product launches will also be important signposts for execution.

Powell currently trades at $300.86, down from $321.66 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

High-Quality Stocks for All Market Conditions

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return).

What Happened?

A number of stocks jumped in the morning session after strong results from chipmaker Nvidia eased lingering concerns about a potential bubble, especially in the tech sector. 

The tech giant delivered another blockbuster earnings report, with sales, profits, and guidance exceeding Wall Street expectations. CEO Jensen Huang let the data do the talking as he acknowledged the growing sentiment about an AI bubble, while affirming that sales for Nvidia's current-generation GPU, called Blackwell (mostly used for AI applications), are "off the charts." A stronger-than-expected September jobs report from the Bureau of Labor Statistics reinforced this bullish sentiment. Nonfarm payrolls rose by 119,000, easily surpassing the consensus estimates of 50,000. While the unemployment rate ticked up to 4.4% and wage growth slowed slightly, the data suggest the U.S. economy remains on a firm footing.While this resilience made some investors unsure of the Fed's December rate decision, the market welcomed the news, rallying on the strength of a solid economy and a booming tech sector.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Engineering and Design Services company Sterling jumped 4.8%. Is now the time to buy Sterling? Access our full analysis report here, it’s free for active Edge members.
• Renewable Energy company SolarEdge jumped 7.9%. Is now the time to buy SolarEdge? Access our full analysis report here, it’s free for active Edge members.
• Renewable Energy company Sunrun jumped 4.9%. Is now the time to buy Sunrun? Access our full analysis report here, it’s free for active Edge members.
• Home Construction Materials company JELD-WEN jumped 7.2%. Is now the time to buy JELD-WEN? Access our full analysis report here, it’s free for active Edge members.
• Electrical Systems company Powell jumped 5.8%. Is now the time to buy Powell? Access our full analysis report here, it’s free for active Edge members.

Zooming In On SolarEdge (SEDG)

SolarEdge’s shares are extremely volatile and have had 95 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 6 days ago when the stock gained 2.4% on the news that an analyst at UBS raised the firm's price target on the stock to $40 from $30. The adjustment represented a 33.33% increase in the price target. Despite the more optimistic valuation, the investment bank maintained its 'Neutral' rating on the shares. This suggested that while the firm saw more potential value in the stock, it was not signaling a strong recommendation to buy.

SolarEdge is up 127% since the beginning of the year, but at $33.64 per share, it is still trading 25.9% below its 52-week high of $45.38 from November 2025. Investors who bought $1,000 worth of SolarEdge’s shares 5 years ago would now be looking at an investment worth $130.42.

Electrical energy control systems manufacturer Powell (NYSE:POWL) announced better-than-expected revenue in Q3 CY2025, with sales up 8.3% year on year to $298 million. Its GAAP profit of $4.22 per share was 12.2% above analysts’ consensus estimates.

Is now the time to buy POWL? Find out in our full research report (it’s free for active Edge members).

Powell (POWL) Q3 CY2025 Highlights:

• Revenue: $298 million vs analyst estimates of $292.8 million (8.3% year-on-year growth, 1.8% beat)
• EPS (GAAP): $4.22 vs analyst estimates of $3.76 (12.2% beat)
• Adjusted EBITDA: $64.99 million vs analyst estimates of $59.32 million (21.8% margin, 9.6% beat)
• Operating Margin: 21.2%, in line with the same quarter last year
• Backlog: $1.4 billion at quarter end, up 7.7% year on year
• Market Capitalization: $3.44 billion

StockStory’s Take

Powell’s third quarter results surpassed Wall Street’s expectations for both revenue and earnings, yet the market responded negatively following the announcement. Management attributed the quarter’s performance to increased project execution, particularly in nonindustrial markets—such as Electric Utility and Commercial sectors—which now comprise a much larger share of backlog than five years ago. CEO Brett Cope described the quarter as a reflection of “the ongoing high level of project execution across all of our operations,” noting significant progress in diversifying beyond traditional oil and gas markets. The company also highlighted favorable gross profit margins driven by strong pricing discipline and operational throughput. However, some end markets, like oil and gas and petrochemicals, experienced softness, while the mix of projects shifted toward smaller and medium-sized orders rather than large-scale contracts.

Looking ahead, Powell’s management is focused on continued expansion in Electric Utility, data center, and natural gas projects, as well as the integration of Remsdaq to broaden its automation offerings. CEO Brett Cope emphasized that “opportunities are growing in both size and volume as well as product applications” in the data center space, which is expected to be a key driver of future growth. The company plans further investments in manufacturing capacity, particularly to support anticipated LNG project demand, and expects to see new product launches from increased R&D investment in the coming year. CFO Michael Metcalf stated that margins in the upper 20% range remain realistic, underpinned by a solid backlog and stable pricing, but acknowledged that certain segments may face ongoing competitive and pricing pressures.

Key Insights from Management’s Remarks

Management attributed the quarter’s results to strong execution in nonindustrial segments, a growing backlog, and strategic investments in manufacturing and automation.

• Nonindustrial market momentum: Electric Utility and Commercial sectors drove revenue growth, now making up nearly half the company’s backlog, compared to just under 20% five years ago. Management sees this as a result of a deliberate diversification strategy away from traditional oil and gas reliance.

• Data center opportunity expansion: The Commercial and Other Industrial segment, largely powered by demand from data centers, continues to show robust activity. CEO Brett Cope noted that “the size and breadth of the opportunity for Powell is clearly growing,” with the company actively quoting sizable projects and expanding its footprint in this fast-evolving market.

• Project mix shift: The quarter saw a higher volume of small- and medium-sized project orders, rather than large-scale “mega” projects. Management explained this shift supports manufacturing productivity and balances risk, though it can moderate revenue visibility compared to periods dominated by larger contracts.

• Gross margin improvement: Gross profit margins increased due to project closeouts, disciplined pricing, and operational leverage. CFO Michael Metcalf pointed to “continued strong project execution” as a key factor in margin sustainability, with project closeouts contributing an incremental 100 basis points in the quarter.

• Strategic acquisitions and capacity investment: Powell closed its acquisition of Remsdaq, aiming to accelerate its electrical automation strategy. The company also announced a major expansion at its Jacintoport facility in Houston, primarily to capture anticipated growth from U.S. LNG projects, reflecting a commitment to organic and inorganic growth initiatives.

Drivers of Future Performance

Powell’s outlook centers on sustained momentum in Electric Utility, data center, and LNG markets, alongside margin stability and new product introductions.

• Electric Utility and data center strength: Management expects continued demand for power distribution solutions from both Electric Utility customers—driven by infrastructure investment—and data center operators, where reliability and capacity remain critical. Brett Cope stated that Powell’s presence in these sectors is expanding, and that “opportunities are growing in both size and volume.”

• Capacity and automation investments: The ongoing expansion of the Jacintoport facility and integration of Remsdaq are intended to support growth in LNG and automation markets. These investments are expected to enhance Powell’s manufacturing capabilities and product offerings, with management believing these will yield “margin-accretive economics.”

• Margin and competitive headwinds: While margins are projected to remain in the upper 20% range, management cautioned that portions of the traditional oil and gas and petrochemical segments are experiencing softness and increased price sensitivity. CFO Michael Metcalf noted that some subsectors are “a little softer, a little bit more price sensitive,” which may temper overall profitability.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will be monitoring (1) the pace at which Powell converts its growing backlog into revenue, especially in Electric Utility and data center segments; (2) the impact of the Jacintoport facility expansion on capacity and order fulfillment; and (3) early returns from the Remsdaq acquisition as Powell integrates automation offerings. The sustainability of margins and new product launches will also be important signposts for execution.

Powell currently trades at $292.70, down from $321.66 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

High Quality Stocks for All Market Conditions

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return).

What Happened?

Shares of electrical energy control systems manufacturer Powell (NYSE:POWL) fell 11% in the afternoon session after the stock's negative momentum continued as the company reported third-quarter 2025 revenue and earnings that surpassed analyst expectations, but its results also included signs of slowing growth. 

While revenue grew 8.3% year-on-year to $298 million and GAAP earnings per share of $4.22 beat Wall Street's estimates, investors seemed to focus on potential headwinds. The company's backlog of future work, a key indicator of demand, grew by 7.7% year-on-year to $1.4 billion. This rate was slower than its revenue growth, which can suggest that new orders are not keeping pace with current sales. Furthermore, analysts' forward-looking estimates project that revenue growth will decelerate to 6.1% over the next 12 months and that full-year earnings per share will remain flat, pointing to a less robust outlook.

The shares closed the day at $284.87, down 11.4% from previous close.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Powell? Access our full analysis report here.

What Is The Market Telling Us

Powell’s shares are extremely volatile and have had 41 moves greater than 5% over the last year. But moves this big are rare even for Powell and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 6 days ago when the stock dropped 8.2% on the news that the broader U.S. stock market declined amid investor caution and a pullback in technology stocks. 

The main story? Investors are cashing in on a good run and feeling a bit cautious. After a fantastic run, many of those high-flying AI and technology stocks saw investors take profits: selling shares to lock in their gains.This is often called a "market rotation." Money is moving out of the red-hot tech sector (which some worry has become too expensive) and into other parts of the market that investors may currently deem more stable or reasonably-priced.There's a secondary reason for the cautious mood: The long government shutdown came to an end. Though it's typically interpreted as good news, it also means a flood of delayed economic reports will be released. For weeks, investors were "flying blind" without key updates on the economy's health, like inflation data and the jobs report. In typical "sell the news" fashion, investors may also be taking profits and selling in anticipation that the new data would potentially give the Federal Reserve reasons to slow or even pause future rate cuts.

Powell is up 25.6% since the beginning of the year, but at $287.23 per share, it is still trading 29.7% below its 52-week high of $408.37 from October 2025. Investors who bought $1,000 worth of Powell’s shares 5 years ago would now be looking at an investment worth $10,690.