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Woodward (WWD): 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 Jul 30, 2026; rules v1.1
Woodward (WWD): 0 rules of 10 triggered on the filings to Jun 30, 2026. 1 to review; 2 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
Low P/E at a cyclical peak = undervalued To review · confidence medium
Net income of $552M is at a high against a median of $240M over eight years; at 35.1× the market is not pricing it as cheap, but a multiple on this year's profit still understates the mid-cycle one (80.5×).
Every rule
A01 FCF growth = the business improved Not triggered confidence high
Free cash flow did not rise ($343M → $340M): the trap does not arise.
The figures and how they are read
| Fiscal year before | FY24 |
| Fiscal year | FY25 |
| Operating cash flow, year before | $439M |
| Operating cash flow | $471M |
| Capex, year before | $96M |
| Capex | $131M |
| Free cash flow, year before | $343M |
| Free cash flow | $340M |
| Change in FCF | −$2M |
| Change in capex | $35M |
| Working capital: change in its cash contribution | $6M |
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 0.9% of revenue: small enough that adding it back changes little.
The figures and how they are read
| Fiscal year | FY25 |
| Stock compensation | $32M |
| Revenue | $3.6B |
| SBC / revenue | +0.9% |
| Buybacks | $173M |
| Buybacks / SBC | 5.5 |
| Diluted shares, year before | 62.1M shares |
| Diluted shares | 61.5M shares |
| Diluted shares: change | -1.0% |
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 Not triggered confidence medium
Receivables grew 30% against revenue 21% in Q3 FY26; DSO 47 against a median of 44: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q3 FY26 |
| Revenue, year over year | +21.2% |
| Receivables, year over year | +30.0% |
| Quarter before | Q2 FY26 |
| Revenue y/y, quarter before | +23.4% |
| Receivables y/y, quarter before | +8.2% |
| Days sales outstanding | 47.3 |
| DSO, median of eight quarters | 44.0 |
| Receivables | $618M |
| Revenue | $1.1B |
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)
B08 Adjusted profit = economic profit Not triggered confidence low
Adjusted and GAAP EPS were within 10% of each other in the last 3 quarters.
The figures and how they are read
| Quarter / adjusted EPS / GAAP EPS / gap | 2025-12-31 / 2.17 / 2.17 / 0.0; 2026-03-31 / 2.27 / 2.19 / 0.035; 2026-06-30 / 2.52 / 2.4 / 0.048 |
| Quarters with adjusted ≥ 10% above GAAP | 0 |
| Quarters compared | 3 |
| Latest gap | +4.8% |
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: 2025-12-31 (adjusted 2.17 vs GAAP 2.17) · 2026-03-31 (adjusted 2.27 vs GAAP 2.19) · 2026-06-30 (adjusted 2.52 vs GAAP 2.40)
C02 Low net debt = no refinancing risk Not triggered confidence medium
$724M comes due within a year, 1.2× covered by cash and investments of $475M plus $377M of free cash flow.
The figures and how they are read
| Cash and investments | $475M |
| Debt | $1.2B |
| Net debt | $697M |
| Due within a year | $724M |
| Read from | the current portion of debt on the balance sheet |
| Free cash flow, twelve months | $377M |
| Cash plus free cash flow | $851M |
| Coverage of what is due | 1.2 |
| Due in the second year | — |
| Balance sheet date | 2026-06-30 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: 2026-06-30 (debt maturities, cash and investments)
D03 EPS growth = profit growth Insufficient data
no quarter with EPS, net income and diluted shares for both this year and last
E02 Low P/E at a cyclical peak = undervalued To review confidence medium
Net income of $552M is at a high against a median of $240M over eight years; at 35.1× the market is not pricing it as cheap, but a multiple on this year's profit still understates the mid-cycle one (80.5×).
The figures and how they are read
| market value | $19.4B |
| net income ttm | $552M |
| pe ttm | 35.10 |
| net income median fy | $240M |
| pe mid cycle | 80.50 |
| net income peak fy | $442M |
| years | FY18 / 180.0; FY19 / 260.0; FY20 / 240.0; FY21 / 209.0; FY22 / 172.0; FY23 / 232.0; FY24 / 373.0; FY25 / 442.0 |
| down years in window | 3 |
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)
What would show the trap does not apply
- Profit holds at this level through the next two years (the eight-year peak was a new base, not a top)
- The industry's capacity and prices stay where they are rather than reverting
Look again: next filing.
E07 A precise DCF value = the true value Insufficient data
no DCF in the valuation research for this company
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 → Woodward: 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.