SPX Technologies (SPXC): Assessing Valuation Following Strong Growth and Improved Margins

SPX Technologies (NYSE:SPXC) has seen its stock surge by 51% in the past six months, following strong quarterly results and steady revenue growth that suggest rising demand for its products and services.

See our latest analysis for SPX Technologies.

The strong momentum in SPX Technologies’ share price this year, with a 30.3% year-to-date return, signals that investor confidence is gathering steam as the company continues to deliver on growth and profitability. The three- and five-year total shareholder returns of 194% and 324% respectively highlight a track record of creating real long-term value.

If you’re searching for fresh opportunities as industrials like SPX Technologies rally, now is a great time to broaden your search and discover fast growing stocks with high insider ownership.

With SPX Technologies boasting rapid revenue growth and rising profitability, is its impressive rally offering investors a rare buying window, or has the market already factored in all of the company’s future prospects?

Most Popular Narrative: 5.6% Undervalued

SPX Technologies is currently trading at $190.40, while the most popular narrative estimates its fair value at $201.64, representing a meaningful premium to its last close. This creates a clear focal point for examining the key fundamentals behind analyst consensus.

Expansion in data center cooling solutions, highlighted by the new OlympusV Max launch, which addresses the rapidly growing demand for energy-efficient, large-scale data center infrastructure, positions SPX to meaningfully expand its addressable market and top-line growth as hyperscale projects accelerate into 2026. This supports both revenue and margin improvement due to product differentiation and high-engineering requirements.

Read the complete narrative.

Want to know what powers that higher fair value? The narrative hinges on ambitious projections for revenue growth, fatter profit margins, and a bold future earnings multiple. Wondering how this industrial can command a price once reserved for the fastest-growing tech companies? Dive in to uncover the numbers creating this surprising target.

Result: Fair Value of $201.64 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ambitious M&A integration or potential slowdowns in key project-driven segments could challenge SPX Technologies' ability to meet these bullish expectations.

Find out about the key risks to this SPX Technologies narrative.

Another View: High Earnings Multiple Could Limit Upside

Looking at valuation through the lens of the price-to-earnings ratio provides a different perspective. SPX Technologies trades at 44.5 times earnings, much higher than both the US Machinery industry at 24.5x and the peer average at 32.9x. Notably, this multiple is well above the market's fair ratio of 29.7x. That significant premium suggests investors may already be factoring in considerable future growth and increases the risk that any earnings shortfall could lead to a sharp re-rating. Are you comfortable with that premium?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own SPX Technologies Narrative

If these insights spark a different conclusion or you enjoy digging into the data yourself, you can put together your own view in just a few minutes. Do it your way.

A great starting point for your SPX Technologies research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

Looking for More Investment Ideas?

Take your investing to the next level with hand-picked screens, curated for real opportunity. Miss out now and you could leave profits on the table.

• Supercharge your passive income by tapping into these 17 dividend stocks with yields > 3% that offer attractive yields and stable returns above 3%.
• Catch the AI wave early and fuel your portfolio’s growth with these 27 AI penny stocks driving innovation across industries.
• Ride the market’s most undervalued opportunities by uncovering these 868 undervalued stocks based on cash flows that the crowd may be overlooking right now.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com