BWX currently trades at $210.00 and has been a dream stock for shareholders. It’s returned 272% since February 2021, more than tripling the S&P 500’s 80.1% gain. The company has also beaten the index over the past six months as its stock price is up 35.9% thanks to its solid quarterly results.
Is now still a good time to buy BWXT? Or is this a case of a company fueled by heightened investor enthusiasm? Find out in our full research report, it’s free.
Why Do Investors Watch BWXT Stock?
Contributing components and materials to the famous Manhattan Project in the 1940s, BWX (NYSE:BWXT) is a manufacturer and service provider of nuclear components and fuel for government and commercial industries.
Three Things to Like:
1. Long-Term Revenue Growth Shows Momentum
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, BWX grew its sales at a decent 8.1% compounded annual growth rate. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.
2. Projected Revenue Growth Is Remarkable
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite, though some deceleration is natural as businesses become larger.
Over the next 12 months, sell-side analysts expect BWX’s revenue to rise by 15.2%, an improvement versus its 8.1% annualized growth for the past five years. This projection is eye-popping and suggests its newer products and services will fuel better top-line performance.
3. Increasing Free Cash Flow Margin Juices Financials
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, BWX’s margin expanded by 16.9 percentage points over the last five years. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose while its operating profitability fell. BWX’s free cash flow margin for the trailing 12 months was 15.1%.
Final Judgment
BWX possesses several positive attributes, and with its shares outperforming the market lately, the stock trades at 51.1× forward P/E (or $210.00 per share). Is now the time to initiate a position? See for yourself in our full research report, it’s free.
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