Electrical Systems Stocks Q3 Teardown: Allegion (NYSE:ALLE) Vs The Rest

What Happened?

A number of stocks jumped in the afternoon session after the Federal Reserve lowered its benchmark interest rate by a quarter-percentage point, signaling a more accommodative monetary policy. 

This dovish action, combined with highly accommodating signals from Chair Jerome Powell and the Federal Open Market Committee (FOMC), sent the Dow Jones Industrial Average and S&P 500 surging.The market's bullish reaction was rooted in several key takeaways from the Fed's announcement. Most significantly, the central bank confirmed it would begin expanding its balance sheet by buying short-term bonds, a move that injects critical liquidity and lowers short-term Treasury yields. Furthermore, the Fed signaled a shift in priority by removing language that described the labor market as "remaining low," suggesting it would be more focused on supporting economic growth. While the Fed's official forecast projected only one cut for the next year, traders immediately priced in the expectation of more aggressive easing, banking on at least two rate reductions. This widespread anticipation of sustained, low borrowing costs and the virtual certainty that rate hikes would be off the table boosted corporate valuations and created powerful momentum for the equity market rally.

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:

• Heavy Transportation Equipment company Douglas Dynamics jumped 4.9%. Is now the time to buy Douglas Dynamics? Access our full analysis report here, it’s free for active Edge members.
• Ground Transportation company Old Dominion Freight Line jumped 5.9%. Is now the time to buy Old Dominion Freight Line? Access our full analysis report here, it’s free for active Edge members.
• Electrical Systems company Thermon jumped 4.7%. Is now the time to buy Thermon? Access our full analysis report here, it’s free for active Edge members.
• Maintenance and Repair Distributors company DXP jumped 4.6%. Is now the time to buy DXP? Access our full analysis report here, it’s free for active Edge members.
• Renewable Energy company Enphase jumped 5.1%. Is now the time to buy Enphase? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Old Dominion Freight Line (ODFL)

Old Dominion Freight Line’s shares are somewhat volatile and have had 12 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 7 days ago when the stock gained 4.3% on the news that investors focused on improved pricing power despite a drop in shipping volumes reported in the company's November operational update. The company reported that its revenue per day decreased by 4.4% compared to the same month in the previous year. This drop resulted from a 10.0% decrease in less-than-truckload (LTL) tons per day. However, the decline was partly offset by an increase in LTL revenue per hundredweight, a key measure of pricing. The stock's positive reaction suggested that investors weighed the stronger pricing more heavily than the fall in shipping volume. Separately, an analyst at B of A Securities maintained a Neutral rating on the stock while raising the price target.

Old Dominion Freight Line is down 10.5% since the beginning of the year, and at $157.35 per share, it is trading 24.8% below its 52-week high of $209.29 from February 2025. Investors who bought $1,000 worth of Old Dominion Freight Line’s shares 5 years ago would now be looking at an investment worth $1,584.

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at electrical systems stocks, starting with Kimball Electronics .

Like many equipment and component manufacturers, electrical systems companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include Internet of Things (IoT) connectivity and the 5G telecom upgrade cycle, which can benefit companies whose cables and conduits fit those needs. But like the broader industrials sector, these companies are also at the whim of economic cycles. Interest rates, for example, can greatly impact projects that drive demand for these products.

The 13 electrical systems stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.8% while next quarter’s revenue guidance was 1.1% below.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Kimball Electronics

Founded in 1961, Kimball Electronics (NYSE:KE) is a global contract manufacturer specializing in electronics and manufacturing solutions for automotive, medical, and industrial markets.

Kimball Electronics reported revenues of $365.6 million, down 2.3% year on year. This print exceeded analysts’ expectations by 8%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $30.51.

Is now the time to buy Kimball Electronics? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Thermon

Creating the first packaged tracing systems, Thermon is a leading provider of engineered industrial process heating solutions for process industries.

Thermon reported revenues of $131.7 million, up 14.9% year on year, outperforming analysts’ expectations by 10.3%. The business had a stunning quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

Thermon delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 34.3% since reporting. It currently trades at $39.50.

Is now the time to buy Thermon? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Atkore

Protecting the things that power our world, Atkore designs and manufactures electrical safety products.

Atkore reported revenues of $752 million, down 4.6% year on year, exceeding analysts’ expectations by 2.5%. Still, it was a slower quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.

As expected, the stock is down 4.7% since the results and currently trades at $63.41.

Read our full analysis of Atkore’s results here.

Vertiv

Formerly part of Emerson Electric, Vertiv manufactures and services infrastructure technology products for data centers and communication networks.

Vertiv reported revenues of $2.68 billion, up 29% year on year. This print topped analysts’ expectations by 3.4%. Overall, it was an exceptional quarter as it also logged an impressive beat of analysts’ organic revenue estimates and a beat of analysts’ EPS estimates.

Vertiv pulled off the fastest revenue growth among its peers. The stock is up 2.1% since reporting and currently trades at $178.50.

Read our full, actionable report on Vertiv here, it’s free for active Edge members.

Acuity Brands

One of the pioneers of smart lights, Acuity designs and manufactures light fixtures and building management systems used in various industries.

Acuity Brands reported revenues of $1.21 billion, up 17.1% year on year. This result came in 1.5% below analysts' expectations. Zooming out, it was a mixed quarter as it also logged an impressive beat of analysts’ EBITDA estimates but a miss of analysts’ organic revenue estimates.

The stock is up 7.7% since reporting and currently trades at $370.92.

Read our full, actionable report on Acuity Brands here, it’s free for active Edge members.