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    Powell Industries (POWL): Is Strong Growth and Rising Free Cash Flow Already Fully Priced In?

    Simply Wall St·12/17/2025 11:16:31
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    Powell Industries (POWL) is back on investor radar after two years of strong execution, with revenue up about 26% and earnings climbing roughly 86%. At the same time, a rising free cash flow margin signals healthier, more flexible profitability.

    See our latest analysis for Powell Industries.

    The strong execution story is clearly feeding into performance, with the share price now at $332.65 and a robust year to date share price return of 45.42% pointing to sustained positive momentum. A huge three year total shareholder return of 862.49% underlines how long term holders have already been well rewarded.

    If Powell’s run has you thinking about what else might be gaining traction, it could be a good time to discover fast growing stocks with high insider ownership.

    But with the share price now well above analyst targets and traditional valuation metrics looking stretched, is Powell still mispriced relative to its earnings power? Or is the market already baking in years of future growth?

    Most Popular Narrative: 24% Overvalued

    With Powell Industries closing at $332.65 against a narrative fair value of $269.26, the current price implies a rich future earnings profile.

    The analysts have a consensus price target of $245.927 for Powell Industries based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $280.0, and the most bearish reporting a price target of just $224.78.

    Read the complete narrative.

    Want to see why steady revenue growth, easing margins and a higher future earnings multiple still add up to a lower value than today? The most followed narrative unpacks how modest top line expansion, profit compression and a rising discount rate combine into a surprisingly restrained earnings outlook. Curious which long range profit assumptions are doing the heavy lifting in that fair value math, and how much optimism is already priced in?

    Result: Fair Value of $269.26 (OVERVALUED)

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

    However, resilient electrification demand and stronger than expected margin expansion from higher value projects could keep earnings outgrowing the cautious consensus.

    Find out about the key risks to this Powell Industries narrative.

    Build Your Own Powell Industries Narrative

    If you see the outlook differently or simply prefer to dig into the numbers yourself, you can build a custom view in minutes: Do it your way.

    A great starting point for your Powell Industries research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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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.