SPX Technologies’s stock price has taken a beating over the past six months, shedding 27.5% of its value and falling to $116.99 per share. This may have investors wondering how to approach the situation.
Following the pullback, is now a good time to buy SPXC? Find out in our full research report, it’s free.
Why Are We Positive On SPX Technologies?
SPX Technologies (NYSE: SPXC) is an industrial conglomerate catering to the energy, manufacturing, automotive, and aerospace sectors.
1. Organic Growth Indicates Solid Core Business
We can better understand Gas and Liquid Handling companies by analyzing their organic revenue. This metric gives visibility into SPX Technologies’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.
Over the last two years, SPX Technologies’s organic revenue averaged 9.8% year-on-year growth. This performance was solid and shows it can expand steadily without relying on expensive (and risky) acquisitions. 
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
SPX Technologies’s EPS grew at a spectacular 15.3% compounded annual growth rate over the last five years, higher than its 5.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Increasing Free Cash Flow Margin Juices Financials
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
As you can see below, SPX Technologies’s margin expanded by 5.1 percentage points over the last five years. This is encouraging because it gives the company more optionality. SPX Technologies’s free cash flow margin for the trailing 12 months was 13.5%.
Final Judgment
These are just a few reasons SPX Technologies is a high-quality business worth owning. After the recent drawdown, the stock trades at 20× forward price-to-earnings (or $116.99 per share). Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More Than SPX Technologies
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