Gorman-Rupp (NYSE: GRC) manufactures and sells pumps globally. missed Wall Street’s revenue expectations in Q2 CY2026 as sales rose 3.9% year on year to $186.1 million. Its GAAP profit of $0.74 per share was 5% above analysts’ consensus estimates.
Is now the time to buy Gorman-Rupp? Find out by accessing our full research report, it’s free.
Gorman-Rupp (GRC) Q2 CY2026 Highlights:
- Revenue: $186.1 million vs analyst estimates of $188.9 million (3.9% year-on-year growth, 1.5% miss)
- EPS (GAAP): $0.74 vs analyst estimates of $0.71 (5% beat)
- Adjusted EBITDA: $38.2 million vs analyst estimates of $35.5 million (20.5% margin, 7.6% beat)
- Operating Margin: 16.3%, up from 14.8% in the same quarter last year
- Free Cash Flow Margin: 19.8%, up from 13.9% in the same quarter last year
- Backlog: $239.7 million at quarter end, up 6.8% year on year
- Market Capitalization: $2.10 billion
Scott A. King, President and CEO, commented, “Our strong start to the year continued into the second quarter. We are pleased with our record second quarter results, which included record net sales and earnings per share. Sales growth was broad-based across many of our markets, led by increased demand in construction and agriculture, as well as increased demand related to data centers across multiple end markets. Our margins remained strong in the second quarter and our earnings performance through the first half of 2026 helped generate solid operating cash flows. The strong cash flows allowed us to reduce total debt by $33.0 million during the first six months of 2026 while continuing to invest in the business. Incoming orders and backlog remained healthy, positioning us well for the second half of the year.”
Company Overview
Powering fluid dynamics since 1934, Gorman-Rupp (NYSE: GRC) has evolved from its Ohio origins into a global manufacturer and seller of pumps and pump systems.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Gorman-Rupp’s 14.7% annualized revenue growth over the last five years was exceptional. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Gorman-Rupp’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 3.4% over the last two years was well below its five-year trend. 
This quarter, Gorman-Rupp’s revenue grew by 3.9% year on year to $186.1 million, falling short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 6.8% over the next 12 months. Although this projection implies its newer products and services will fuel better top-line performance, it is still below average for the sector. At least the company is tracking well in other measures of financial health.
ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable.
These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE.
Operating Margin
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.
Gorman-Rupp has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 12.8%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.
Looking at the trend in its profitability, Gorman-Rupp’s operating margin rose by 5.8 percentage points over the last five years, as its sales growth gave it immense operating leverage.
In Q2, Gorman-Rupp generated an operating margin profit margin of 16.3%, up 1.6 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.
Gorman-Rupp’s EPS grew at 16.8% compounded annual growth rate over the last five years, higher than its 14.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Diving into Gorman-Rupp’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Gorman-Rupp’s operating margin expanded by 5.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For Gorman-Rupp, its two-year annual EPS growth of 35% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.
In Q2, Gorman-Rupp reported EPS of $0.74, up from $0.60 in the same quarter last year. This print beat analysts’ estimates by 5%. Over the next 12 months, Wall Street expects Gorman-Rupp’s full-year EPS to grow 17.3% from $2.37 to $2.78.
Key Takeaways from Gorman-Rupp’s Q2 Results
We were impressed by how significantly Gorman-Rupp blew past analysts’ EBITDA expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its revenue slightly missed. Overall, this print had some key positives. The stock remained flat at $79.67 immediately following the results.
So do we think Gorman-Rupp is an attractive buy at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
