While the S&P 500 is up 17.4% since March 2025, Standex (currently trading at $202.09 per share) has lagged behind, posting a return of 7.2%. This may have investors wondering how to approach the situation.
Is now the time to buy Standex, or should you be careful about including it in your portfolio? Get the full breakdown from our expert analysts, it’s free.
Why Is Standex Not Exciting?
We're cautious about Standex. Here are three reasons there are better opportunities than SXI and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Standex grew its sales at a tepid 5.5% compounded annual growth rate. This was below our standard for the industrials sector.
2. Recent EPS Growth Below Our Standards
While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.
Standex’s EPS grew at an unimpressive 7.8% compounded annual growth rate over the last two years. On the bright side, this performance was higher than its 3.3% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.
3. Free Cash Flow Margin Dropping
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
As you can see below, Standex’s margin dropped by 4.2 percentage points over the last five years. If its declines continue, it could signal increasing investment needs and capital intensity. Standex’s free cash flow margin for the trailing 12 months was 5.2%.
Final Judgment
Standex’s business quality ultimately falls short of our standards. With its shares underperforming the market lately, the stock trades at 23.6× forward P/E (or $202.09 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. We're fairly confident there are better investments elsewhere. We’d recommend looking at the most dominant software business in the world.
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