Is Graham Corporation (GHM) Poised for Sustained Growth Amid Defense and Space Sector Expansion?

The defense and space sectors are undergoing a renaissance, driven by geopolitical tensions, technological innovation, and the rapid commercialization of space. For investors, the question is whether companies like Graham Corporation (GHM) can capitalize on these trends. Based on recent financial performance, strategic investments, and insider confidence, the answer appears to be a resounding yes.

Strategic Positioning in High-Growth Industrial Markets

Graham Corporation has carved out a niche in mission-critical industries, with defense and space accounting for a significant portion of its revenue. In fiscal year 2025, the company reported total revenue of $209.9 million, a 13% increase from the prior year, with defense sales alone surging by 23%. This growth is underpinned by a record backlog of $412.3 million, 83% of which is tied to defense contracts. . By the second quarter of fiscal 2026, the backlog had grown to $500.1 million, with 85% linked to defense, signaling strong visibility for future revenue.

The company's exposure to the space sector is also expanding. In Q2 2026, Graham secured $22 million in new orders from leading aerospace customers, including components for space launch vehicles. These contracts are expected to convert into revenue over the next 12 to 24 months, aligning with the broader trend of commercial space exploration. Management has further emphasized its commitment to this sector by investing in production capacity at its Colorado-based Barber-Nichols facility. New CNC machining centers and a liquid nitrogen test stand are being added to meet rising demand for precision-engineered turbomachinery.

Insider Confidence and Strategic Management Insights

Insider activity often serves as a barometer of corporate health. In 2025, Gregorio Mauro, a Graham insider, purchased 1,200 shares of GHM stock, signaling optimism about the company's trajectory. This confidence is echoed in management's public statements. Mike Dixon, General Manager of Barber-Nichols, highlighted the company's "strong and sustained momentum" in the space sector, crediting its expertise in high-speed rotating equipment and precision manufacturing.

Graham's strategic focus on defense and space is further evidenced by its recent contract wins. The company secured a $25.5 million follow-on order for the MK48 Torpedo program and over $65 million in defense and space contracts, including components for the Columbia-class submarine. These projects underscore Graham's ability to deliver mission-critical solutions in high-stakes environments, a differentiator in industries where reliability is paramount.

A Compelling Case for Sustained Growth

The confluence of macroeconomic trends and Graham's operational strengths creates a compelling case for long-term growth. Defense spending is projected to rise globally, while the space sector is being reshaped by private-sector players like SpaceX and Blue Origin. Graham's expertise in turbomachinery and precision engineering positions it to benefit from both.

Moreover, the company's financial discipline-evidenced by its growing backlog and consistent revenue growth-suggests it is well-equipped to handle increased demand. With insiders and management aligned on the company's strategic direction, and with a pipeline of high-margin contracts in place, Graham Corporation appears poised to outperform in a sector that is only beginning to realize its potential.