SPX Technologies currently trades at $202.14 and has been a dream stock for shareholders. It’s returned 251% since March 2021, blowing past the S&P 500’s 68.2% gain. The company has also beaten the index over the past six months as its stock price is up 10.5%.
Following the strength, is SPXC a buy right now? Or is the market overestimating its value? Find out in our full research report, it’s free.
Why Are We Positive On SPXC?
With roots dating back to 1912 as the Piston Ring Company, SPX Technologies (NYSE: SPXC) supplies specialized infrastructure equipment for HVAC systems and detection and measurement applications across industrial, commercial, and utility markets.
1. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, SPX Technologies’s sales grew at an excellent 12.8% compounded annual growth rate over the last five years. Its growth surpassed the average industrials company and shows its offerings resonate with customers.
2. Operating Margin Rising, Profits Up
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
Looking at the trend in its profitability, SPX Technologies’s operating margin rose by 9.4 percentage points over the last five years, as its sales growth gave it immense operating leverage. Its operating margin for the trailing 12 months was 15.5%.
3. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
SPX Technologies’s EPS grew at 19.3% compounded annual growth rate over the last five years, higher than its 12.8% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Final Judgment
These are just a few reasons why we're bullish on SPX Technologies, and with its shares beating the market recently, the stock trades at 24.9× forward P/E (or $202.14 per share). Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
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