Assessing NPK International (NPKI) Valuation After Riverwater Partners’ Infrastructure Buildout Investment News

Riverwater Partners’ Small Cap Strategy recently added NPK International (NPKI) as a new holding after highlighting its role in grid expansion, electrification projects and energy system upgrades tied to the ongoing infrastructure buildout.

See our latest analysis for NPK International.

The latest share price of $13.65 sits alongside a 30 day share price return of 12.62% and a year to date share price return of 12.81%. The 1 year total shareholder return of 88.28% and very large 5 year total shareholder return indicate that momentum has been building despite short term pullbacks.

If news around grid expansion has you looking at infrastructure related themes, it could be a good moment to scan aerospace and defense stocks as another way to uncover potential ideas.

So, with NPK International posting an 88.28% 1 year total shareholder return and trading at a discount to the US$16.75 analyst price target, is there still an entry point here, or is the market already pricing in future growth?

Most Popular Narrative: 18.5% Undervalued

With NPK International’s most followed narrative pointing to a fair value of $16.75 against a $13.65 share price, the story hinges on how durable its earnings and cash generation can be as infrastructure work continues.

Strong and flexible balance sheet with ample liquidity allows continued investment in fleet expansion, operational efficiency, and share repurchases, while also enabling potential strategic acquisitions. This supports both revenue growth and shareholder returns (EPS uplift from buybacks) and underpins the company's undervaluation relative to forward growth prospects.

Read the complete narrative.

Want to see what is really behind that fair value? The narrative leans heavily on future revenue expansion, margin resilience, and a richer earnings multiple. Curious which assumptions do the heavy lifting and how they tie back to 2028 earnings expectations? The full story is in the detailed forecasts, not just the headline price target.

Result: Fair Value of $16.75 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this upbeat story could be challenged if large projects are delayed or if higher SG&A and overhead pressures squeeze margins more than expected.

Find out about the key risks to this NPK International narrative.

Another View: Rich P/E Multiples Raise Questions

The fair value story suggests upside, but the current P/E of 34.7x is well above the US Trade Distributors industry at 23.1x and the peer average at 20.9x. It also sits higher than the 27.1x fair ratio our model points to, which could mean less margin for error if growth or margins disappoint. How comfortable are you paying that kind of premium?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own NPK International Narrative

If you see the numbers differently or prefer to test your own assumptions, you can build a custom view in just a few minutes: Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding NPK International.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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