Gorman-Rupp Co Dossier - Source-backed chat

Gorman-Rupp Co

GRCNYSE

SectorIndustrials

IndustrySpecialty Industrial Machinery

Beta (adjusted)1.20

Intrinsic Value $70.46median of 6 methods · middle span $44-$179based on filings through 30 Jun 2026

Market Price $75.13Price as of 1 Oct 2026

Near fair valueIntrinsic value is 6% below the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

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Market Cap $2B

Enterprise Value $2.2B

Shares Outstanding 26.4M diluted

Moat Rating Narrow

Next Earnings Date23 Oct 2026

Last ex-dividend14 Aug 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Gorman-Rupp Co. (GRC) continues to deliver robust operational performance, highlighted by record Q1 2026 sales and significant margin expansion driven by favorable product mix and pricing actions. The company is benefiting from secular tailwinds in municipal water infrastructure and OEM data center cooling applications. However, the stock's valuation has become highly stretched, trading at a trailing P/E of approximately 34.7x, which represents a substantial premium to both its historical averages and its machinery industry peers. While the long-term outlook remains positive due to steady infrastructure demand and disciplined debt reduction, the current share price fully reflects these growth prospects, leaving a limited margin of safety for new investors.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets3 analysts · as of 18 Aug 2026

Low · most bearish analyst$78.00

Mean target$80.67

High · most bullish analyst$84.00

Street targets sit above today's price; our intrinsic value sits below it. Different horizons, different questions.

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 18 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

The bear case assumes a slowdown in municipal project approvals and a cyclical downturn in the construction and agriculture markets. Margin compression occurs due to persistent material inflation and negative leverage on fixed manufacturing costs, leading to a contraction in the P/E multiple toward historical industry averages.

Base CaseCentral scenario

The base case assumes steady organic revenue growth of 5-6% annually over the next two years, supported by municipal infrastructure spending and data center cooling demand. Operating margins are expected to stabilize around 15.0-15.5% as labor and overhead leverage offset localized cost pressures. Debt reduction will continue to lower interest expenses, supporting double-digit EPS growth.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Strong secular tailwinds from municipal water infrastructure investments and data center cooling demand.
Consistent margin expansion driven by operational leverage, pricing actions, and favorable product mix.
Disciplined capital allocation focused on debt reduction and maintaining a 50+ year history of dividend payments.

Key Investment Risks

Stretched valuation multiples with a trailing P/E of 34.7x, leaving the stock vulnerable to any earnings misses.
Weakness in specific end markets, such as the recent decline in fire suppression shipments.
Highly fragmented pump industry with intense competition from larger diversified corporations and foreign-sourced pumps.

Thesis Invalidation Triggers

A material slowdown in municipal water and wastewater infrastructure spending.
Failure to sustain operating margins above 14% due to rising labor or material costs.
A significant drop in incoming orders leading to a rapid depletion of the order backlog.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.