Steady margin growth meets falling valuationsa quality compounder is coming into its own

Hello everyone,

Just in time for the weekend, here’s another industrial stock from the U.S.

The great thing about this stock is that, thanks to its solid and growing business model and strong product portfolio, it excels in three categories of the Traderfox Check.

Scoring 13 out of 15 points in each of three categories is relatively rare. That’s why I really wanted to introduce this company to you.

I’m especially looking forward to your comments here.

$GRC (-0,8%)

The Gorman-Rupp Company, founded in 1933, designs, manufactures, and sells pumps and related equipment (pump and motor controls) for use in water, wastewater, construction, drainage, industrial, petroleum, original equipment, agriculture, fire protection, heating, ventilation, and air conditioning (HVAC), military, and other fluid handling applications from locations in the United States, Canada, the Netherlands, Belgium, Ireland, and South Africa. The company markets these products through its wholly owned subsidiaries and a broad network of dealers, through manufacturer’s representatives, through third-party distributor catalogs, and through direct sales in the U.S. and internationally.

Overview

• Founded in 1933 by J.C. Gorman and H.E. Rupp

• Headquarters: Mansfield, Ohio, USA

• Operates in 6 countries

• Approximately 1,415 employees worldwide

• Sales in 140 countries

• Annual dividend increase for 53 consecutive years

• New York Stock Exchange: GRC

• Chairman: Jeffrey S. Gorman

• President and CEO: Scott A. King

Mission Statement

The Gorman-Rupp Company was founded on a philosophy and commitment to product quality and technological leadership in the pump industry. Gorman-Rupp’s philosophy regarding growth and service is reflected in the mission statement of co-founders J.C. Gorman and H.E. Rupp, which reads: “To deliver a quality product, competitively priced, delivered on time, backed by reliable service, with a profit that provides a fair return for our shareholders, and to provide our employees with competitive wages and benefits.” Fulfilling this promise has laid the foundation for the Gorman-Rupp Company to become a global leader in pumps, with the company continuing to emphasize customer education and training as part of the sales process.

Focus on Product Quality and Customer Service

• Leading designer and manufacturer of pumps and pump systems

• Reputation for high-quality products and outstanding customer service

• Certified, state-of-the-art testing facilities

• Emphasis on customer education and training

• Over 5,000 pump models

• More than two million square feet of design, production, and distribution space worldwide • Strategically located international facilities

• Investment in research and development with a history of innovation

Product Diversity The company’s product line includes pump models ranging in size from 1/4 inch to nearly 15 feet and with flow rates from less than one gallon per minute to over one million gallons per minute. The types of pumps the company manufactures include self-priming centrifugal pumps, standard centrifugal pumps, magnetically driven centrifugal pumps, axial and mixed-flow pumps, vertical shaft-driven turbines, submersible pumps, high-pressure boosters, rotary gear, rotary vane, diaphragm, bellows, and oscillating pumps.

NEWS

24.04.2026: Gorman-Rupp Company erklärt Bardividende

04/24/26: The Board of Directors of the Gorman-Rupp Company has...

26.04.2026: Gorman-Rupp berichtet Finanzergebnisse des ersten Quartals 2026

04/23/26: Gorman-Rupp Company reports financial results for the first quarter...

06.02.2026: Gorman-Rupp berichtet Finanzergebnisse für das vierte Quartal und das gesamte Jahr 2025

02/06/26: The Gorman-Rupp Company reports financial results for the fourth quarter...

PowerPoint Presentation

In the last fiscal year, The Gorman-Rupp Company’s revenue increased by 3.4% from $659.7 million to $682.4 million. Net income rose by 32.2% from $40.1 million to $53.0 million. The net profit margin was thus 7.8%, compared to 6.1% in the previous year. On April 27, 2026, The Gorman-Rupp Company reported its Q3 results for the quarter ending March 31, 2026. Revenue for the reporting period was $176.6 million (+7.7% compared to the same quarter last year) and profit was $17.8 million (+47.1% compared to the same quarter last year).

2026
2027 2028 2029 2030

Revenue
721.20 756.42 773.10 805.10 838.40

Δ
+38.81 +35.22 +16.68 +32.00 +33.30

2026
2027 2028 2029 2030

EBIT 110.11 121.17 144.30 158.50 175.20

Δ +11.79 +11.06 +23.13 +14.20 +16.70

2026
2027 2028 2029 2030

Net income
68.82 77.18 93.10 112.50 132.20

Δ
+15.80 +8.36 +15.92 +19.40 +19.70

2026 2027 2028 2029 2030

Net debt
211.17 145.40 75.50 -14.10 -136.20

Δ
+7.97 -65.77 -69.90 -89.60 -122.10

2026
2027 2028 2029 2030

CAPEX
21.55 19.70 23.50 22.90 23.90

Δ —-
1.85 +3.80 -0.60 +1.00

2026
2027 2028 2029 2030

Free Cash Flow
83.06 90.16 109.00 130.90 151.30

Δ —
+7.10 +18.84 +21.90 +20.40

2026
2027 2028 2029 2030

EBITDA margin 19.6% 20.2% 23.2% 24.2% 25.3%

EBIT margin
15.3%
16.0% 18.7% 19.7% 20.9%

FCF margin
11.5% 11.9% 14.1% 16.3% 18.1%

2026
2027 2028 2029 2030

ROE
14.9% 14.9% 15.7% 16.8% 17.1%

2026
2027 2028 2029 2030

EPS
2.63 2.95 3.60 4.38 5.15

Δ
+0.61 +0.32 +0.65 +0.78 +0.77

2026
2027 2028 2029 2030

P/E
32.12 28.64 23.50 19.31 16.43

Juan’s Conclusion (short and sweet, just the way you like it)

Gorman-Rupp delivers a solid, steady growth package. Revenue, EBIT, and profit are rising steadily every year, while net debt is consistently shifting toward net cash—a strong signal. Margins are clearly improving, especially the FCF and EBIT margins, which shows that the business model is becoming more efficient. EPS is growing reliably, and the P/E ratio is falling year after year, even as earnings rise. Classic quality compounder look with an ever-improving valuation range.

Performance:

1 week +9.73%

1 month +11.45%

6 months +70.61%

1 year +130.24%

3 years +213.06%

June 12, 2026, 10:00:02 PM •

NYSE (USD)

$84.59

June 12, 2026, 11:20:22 •

Lang & Schwarz (EUR)

73.00 EUR

$GRC (-0,8%)

Smudo@Smudeo

4Mes

At the current price level (~$84),
however, the stock appears overvalued—the P/E ratio is well above fair value (DCF estimate
of ~$59.97 according to an analysis from early
2026). For a new entry, a pullback toward
$65–70 would be fundamentally more attractive.

•

Tenbagger-Capital@Tenbagger-Capital

@Smudeo Thanks, my friend, I agree with you. Despite the growth, the PEG ratio doesn't look quite as attractive anymore. But I think it's a good stock to keep an eye on. For long-term investors, a pullback could present a good buying opportunity. Those interested should keep an eye on the currently high RSI.

Raketentoni@Raketentoni

Hello, @Tenbagger2024!

Thanks for the introduction. Gorman-Rupp is a fascinating piece of industrial history. But before we pop the champagne corks over the “Traderfox points,” we ran the stock through our AOK template and technical chart setup with a cool, hard eye.

And honestly: Your headline about the “falling valuation” almost made us spit our coffee all over the keyboard. 😉

Here’s our no-nonsense reality check:

**1. Fact Check: Calendar Confusion**
A quick correction first: Gorman-Rupp didn’t report its Q3 numbers on April 23, 2026—it reported results for **Q1 2026**. But hey, at least the raw numbers from the quarter are correct: $176.6 million in revenue and $17.8 million in profit.

**2. Check 1: Core Quality Formula (The Silver Lining!)**
Credit where credit is due. Revenue growth in the first quarter was 7.7%, and the operating margin was a strong 15.6%. That results in a Core Quality Score of **23.3**. That’s a rock-solid, top-notch score! The business model is delivering, and management is working efficiently.

**3. Check 2 & 3: Cash Flow & Dividends (The Downfall for Income Investors)**
You’re celebrating 53 years of dividend increases. That’s a nice track record, but with a current dividend yield of a measly **approx. 0.9%**, you’re not going to lure anyone out of their hiding place. For a true cash and dividend portfolio that demands a rock-solid 3.5% return, the stock immediately fails this test spectacularly.

**4. Chart Analysis & Valuation (The Fairy Tale of the "Falling Valuation")**
You talk about a "falling valuation" and happily extrapolate the P/E ratio estimates all the way to 2030. Have you even looked at the current price? The stock has staged an unbelievable vertical rally over the past two weeks and is currently trading at **$84.59**.

* **The bare price:** The stock is sitting exactly at its **all-time high**!
* **P/E ratio:** The current trailing P/E ratio stands at an unbelievable **37.9**. For an industrial pump manufacturer, this is not a “compounder bargain,” but simply astronomically overvalued.
* **EMA & RSI:** The price has run miles ahead of our moving averages (EMA 50 & EMA 200). With this surge (from around $73 in early June to nearly $85 today), the RSI is glowing deep red in the massively **overbought zone**.

**Our cold, hard conclusion:**
Gorman-Rupp is a company of outstanding quality, no question. Management has margins firmly under control. But the stock is currently a runaway hype train. Anyone who blindly jumps in now at an all-time high and a P/E ratio of nearly 38 has already priced in the perfect corporate performance of the next five years at a steep cost.

The stock goes on the watchlist as a quality play, but we’re not touching it with a ten-foot pole until the RSI cools down and the price drops back into healthy entry zones near the EMA lines.

Still: Great company, lousy entry point!

Best regards,
RaketenToni & Mister Promt

@Raketentoni My dear friend. We really are on the same page here. Okay, I have to apologize for the headline. But I already corrected it in my first comment. And the chart with the high RSI is included in the presentation. Still, sorry—I should have done better and mentioned it in the description so as not to give the wrong impression. But luckily, you corrected it. Still, at a reasonable valuation, it’s a solid stock in my view.

Stocktective@Stocktective

Thanks for the introduction. I recently found the stock using a screener, but I haven't looked into it yet. I'll have to check it out later.

Max@Maximilian1

My dear. Small steps add up to big ones.

••

“Steady margin growth meets falling valuations—a quality compounder is coming into its own.”