Filing Flows › Companies › Powell Industries › Analysis traps
Powell Industries (POWL): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 FY26, to Jun 30, 2026, filed Aug 4, 2026; rules v1.1
Powell Industries (POWL): 1 rule of 10 triggered on the filings to Jun 30, 2026: receivables growing = future cash is certain. 1 to review; 1 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
Receivables growing = future cash is certain Triggered · severity high · confidence medium
Receivables grew 71% year over year in Q3 FY26 against revenue growth of 9%, and the quarter before 18% against 6%; days sales outstanding is 88 against a median of 66 over the eight quarters before. More of each quarter's revenue is still owed by customers.
Innocent reading: Seasonality: a quarter that always ends with big shipments.
A precise DCF value = the true value To review · confidence high
The DCF's point value is 69.15 a share (price 150.71); 63% of it is the terminal value, a number about years no one has seen. Moving revenue growth (each year) by ±5 pts alone takes it from 60.19 to 79.79; across every method the research ran the range is 3 to 333. The value is a range; the decimals are not information.
Innocent reading: A stable, mature business with a narrow range of outcomes, where the point value is a fair summary.
Every rule
A01 FCF growth = the business improved Not triggered confidence medium
Free cash flow rose $58M to $155M; working capital and lower capex explain 25% of it, so most of the gain is in operating cash flow itself.
The figures and how they are read
| Fiscal year before | FY24 |
| Fiscal year | FY25 |
| Operating cash flow, year before | $109M |
| Operating cash flow | $168M |
| Capex, year before | $12M |
| Capex | $13M |
| Free cash flow, year before | $97M |
| Free cash flow | $155M |
| Change in FCF | $58M |
| Change in capex | $1M |
| Working capital: change in its cash contribution | $14M |
| Of which: capex cut | 0.00 |
| Of which: working capital released | $14M |
| Share of the increase that need not repeat | +24.9% |
| Operating cash flow before working capital: change | 44817000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY25 (cash flow statement, fiscal year) · FY24 (cash flow statement, fiscal year before)
A07 Stock compensation added back = no economic cost Not triggered confidence high
Stock compensation is 0.4% of revenue: small enough that adding it back changes little.
The figures and how they are read
| Fiscal year | FY25 |
| Stock compensation | $5M |
| Revenue | $1.1B |
| SBC / revenue | +0.4% |
| Buybacks | 0 |
| Buybacks / SBC | 0.0 |
| Diluted shares, year before | 12.2M shares |
| Diluted shares | 12.2M shares |
| Diluted shares: change | -0.2% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY25 (stock compensation, buybacks and the diluted share count, fiscal year)
B02 Receivables growing = future cash is certain Triggered severity high · confidence medium
Receivables grew 71% year over year in Q3 FY26 against revenue growth of 9%, and the quarter before 18% against 6%; days sales outstanding is 88 against a median of 66 over the eight quarters before. More of each quarter's revenue is still owed by customers.
The figures and how they are read
| Quarter | Q3 FY26 |
| Revenue, year over year | +8.9% |
| Receivables, year over year | +71.2% |
| Quarter before | Q2 FY26 |
| Revenue y/y, quarter before | +6.5% |
| Receivables y/y, quarter before | +17.6% |
| Days sales outstanding | 87.7 |
| DSO, median of eight quarters | 65.8 |
| Receivables | $362M |
| Revenue | $312M |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q3 FY26 (receivables and revenue) · Q3 FY25 (the same quarter a year earlier)
What would explain it innocently
- Seasonality: a quarter that always ends with big shipments
- An acquisition brought its own receivables
- New business with longer standard terms (government, large enterprise)
- Currency: receivables booked in a strengthening currency
What to look for in the filing
- The receivables ageing and the allowance for credit losses
- Any factoring or receivables sold (and whether with recourse)
- Credit terms by customer group
What would show the trap does not apply
- Receivables fall back in line with revenue in the next quarter and DSO returns to its history
- The 10-Q attributes the increase to a disclosed one-off (a large customer's timing, an acquisition) and the allowance for doubtful accounts did not rise
Look again: next filing.
B08 Adjusted profit = economic profit Not triggered confidence low
Adjusted and GAAP EPS were within 10% of each other in the last 4 quarters.
The figures and how they are read
| Quarter / adjusted EPS / GAAP EPS / gap | 2025-09-30 / 1.40667 / 4.22 / -2.0; 2025-12-31 / 1.13333 / 3.4 / -2.0; 2026-03-31 / 1.25 / 1.25 / 0.0; 2026-06-30 / 1.42 / 1.42 / 0.0 |
| Quarters with adjusted ≥ 10% above GAAP | 0 |
| Quarters compared | 4 |
| Latest gap | +0.0% |
the analysts' 'actual' (usually the company's adjusted EPS) against GAAP net income ÷ diluted shares for the matching quarter; a gap of 10% or more counts (the stand-in until three releases' reconciliation tables are on file)
Source: 2025-09-30 (adjusted 1.41 vs GAAP 4.22) · 2025-12-31 (adjusted 1.13 vs GAAP 3.40) · 2026-03-31 (adjusted 1.25 vs GAAP 1.25) · 2026-06-30 (adjusted 1.42 vs GAAP 1.42)
C02 Low net debt = no refinancing risk Insufficient data
no debt figure could be read from the balance sheet (the filing may tag it in other lines)
D03 EPS growth = profit growth Not triggered confidence high
EPS rose 8% and net income rose 8% in Q3 FY26; the share count rose 0.2%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q3 FY26 |
| Quarter before | Q3 FY25 |
| EPS, year before | $1.32 |
| EPS | $1.43 |
| Net income, year before | $48M |
| Net income | $52M |
| Diluted shares, year before | 36.5M shares |
| Diluted shares | 36.6M shares |
| EPS growth | +7.9% |
| Net income growth | +8.1% |
| Diluted shares: change | +0.2% |
| eps from profit | $0.11 |
| eps from share count | $0.00 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q3 FY26 (net income, diluted shares, EPS) · Q3 FY25 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued Not triggered confidence medium
Net income of $191M is a high, but the last eight years rose almost every year (median $17M): a steady climb, not a cycle's top, so the P/E of 28.9× is not on peak profit in that sense.
The figures and how they are read
| market value | $5.5B |
| net income ttm | $191M |
| pe ttm | 28.90 |
| net income median fy | $17M |
| pe mid cycle | 331.10 |
| net income peak fy | $181M |
| years | FY18 / -7.0; FY19 / 10.0; FY20 / 17.0; FY21 / 1.0; FY22 / 14.0; FY23 / 55.0; FY24 / 150.0; FY25 / 181.0 |
| down years in window | 1 |
P/E on the trailing twelve months' net income against the P/E on the median net income of the last eight fiscal years (a mid-cycle stand-in); 'at a peak' = this year's profit at or above 90% of the best year and at least 1.3× the median
Source: Q3 FY26 (net income, trailing twelve months)
E07 A precise DCF value = the true value To review confidence high
The DCF's point value is 69.15 a share (price 150.71); 63% of it is the terminal value, a number about years no one has seen. Moving revenue growth (each year) by ±5 pts alone takes it from 60.19 to 79.79; across every method the research ran the range is 3 to 333. The value is a range; the decimals are not information.
The figures and how they are read
| dcf value | 69.15 |
| price | 150.71 |
| terminal value share | +62.9% |
| swing by input | Revenue growth (each year) / ±5 pts / 60.19 / 79.79; Operating margin / ±3 pts / 61.09 / 77.21; WACC / ±1 pt / 64.42 / 74.93; Tax rate / ±5 pts / 65.75 / 72.55 |
| range all methods | 3.28; 333.0 |
the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran
Source: 2026-11-08 (valuation research)
What would explain it innocently
- A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
- The inputs that matter most are themselves well known (a regulated return, a long contract)
What to look for in the filing
- Which input you believe differs from the research's and why
- What the price implies for growth (the reverse DCF on the fair-value page)
What would show the trap does not apply
- The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
- The company's cash flows over the next three years track the DCF's early years
Look again: next filing.
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Powell Industries: cash flow → Earnings quality score →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.