SPX Technologies (SPXC)

Infrastructure equipment supplier SPX Technologies (NYSE:SPXC) reported revenue ahead of Wall Streets expectations in Q3 CY2025, with sales up 22.6% year on year to $592.8 million. The company expects the full year’s revenue to be around $2.25 billion, close to analysts’ estimates. Its non-GAAP profit of $1.84 per share was 13.8% above analysts’ consensus estimates.

Company Overview

With roots dating back to 1912 as the Piston Ring Company, SPX Technologies (NYSE:SPXC) supplies specialized infrastructure equipment for HVAC systems and detection and measurement applications across industrial, commercial, and utility markets.

Gas and liquid handling companies possess the technical know-how and specialized equipment to handle valuable (and sometimes dangerous) substances. Lately, water conservation and carbon capture–which requires hydrogen and other gasses as well as specialized infrastructure–have been trending up, creating new demand for products such as filters, pumps, and valves. On the other hand, gas and liquid handling companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.

SPX Technologies competes with HVAC equipment manufacturers like Johnson Controls (NYSE: JCI), Carrier Global (NYSE: CARR), and Trane Technologies (NYSE: TT), while in the detection and measurement space, it faces competition from Emerson Electric (NYSE: EMR), FLIR Systems (now part of Teledyne Technologies, NYSE: TDY), and Xylem (NYSE: XYL).

A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, SPX Technologies grew its sales at a solid 10.1% compounded annual growth rate. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. SPX Technologies’s annualized revenue growth of 12.7% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, SPX Technologies reported robust year-on-year revenue growth of 22.6%, and its $592.8 million of revenue topped Wall Street estimates by 2.2%.

Looking ahead, sell-side analysts expect revenue to grow 10.2% over the next 12 months, a slight deceleration versus the last two years. Still, this projection is healthy and suggests the market is forecasting success for its products and services.

SPX Technologies’s unit economics are great compared to the broader industrials sector and signal that it enjoys product differentiation through quality or brand. As you can see below, it averaged an excellent 38.5% gross margin over the last five years. Said differently, roughly $38.49 was left to spend on selling, marketing, R&D, and general administrative overhead for every $100 in revenue.

In Q3, SPX Technologies produced a 40.4% gross profit margin, in line with the same quarter last year. On a wider time horizon, the company’s full-year margin has remained steady over the past four quarters, suggesting its input costs (such as raw materials and manufacturing expenses) have been stable and it isn’t under pressure to lower prices.

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

SPX Technologies has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 11.1%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Analyzing the trend in its profitability, SPX Technologies’s operating margin rose by 8.5 percentage points over the last five years, as its sales growth gave it immense operating leverage.

In Q3, SPX Technologies generated an operating margin profit margin of 16.4%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

SPX Technologies’s EPS grew at a spectacular 17.4% compounded annual growth rate over the last five years, higher than its 10.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into SPX Technologies’s earnings to better understand the drivers of its performance. As we mentioned earlier, SPX Technologies’s operating margin was flat this quarter but expanded by 8.5 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For SPX Technologies, its two-year annual EPS growth of 23% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q3, SPX Technologies reported adjusted EPS of $1.84, up from $1.39 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects SPX Technologies’s full-year EPS of $6.38 to grow 11.8%.

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.

SPX Technologies has shown impressive cash profitability, enabling it to ride out cyclical downturns more easily while maintaining its investments in new and existing offerings. The company’s free cash flow margin averaged 8.9% over the last five years, better than the broader industrials sector.

Taking a step back, we can see that SPX Technologies’s margin dropped by 3 percentage points during that time. If its declines continue, it could signal increasing investment needs and capital intensity.

SPX Technologies’s free cash flow clocked in at $96.1 million in Q3, equivalent to a 16.2% margin. This result was good as its margin was 3.9 percentage points higher than in the same quarter last year. Its cash profitability was also above its five-year level, and we hope the company can build on this trend.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Although SPX Technologies has shown solid business quality lately, it historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 8.4%, somewhat low compared to the best industrials companies that consistently pump out 20%+.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, SPX Technologies’s ROIC has increased. its rising ROIC is a good sign and could suggest its competitive advantage or profitable growth opportunities are expanding.

SPX Technologies reported $229.4 million of cash and $501.6 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $543.7 million of EBITDA over the last 12 months, we view SPX Technologies’s 0.5× net-debt-to-EBITDA ratio as safe. We also see its $25.2 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

We enjoyed seeing SPX Technologies beat analysts’ EBITDA expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 1.5% to $201.63 immediately after reporting.

Updated: December 4, 2025 at 9:13 PM EST

Before deciding whether to buy SPX Technologies or pass, we urge investors to consider business quality, valuation, and the latest quarterly results.

SPX Technologies is a high-quality business worth owning. First, the company’s revenue growth was solid over the last five years, and analysts believe it can continue growing at these levels. And while its cash profitability fell over the last five years, its expanding operating margin shows the business has become more efficient. On top of that, SPX Technologies’s spectacular EPS growth over the last five years shows its profits are trickling down to shareholders.

SPX Technologies’s P/E ratio based on the next 12 months is 28.6x. Analyzing the industrials landscape today, SPX Technologies’s positive attributes shine bright. We like the stock at this price.

Wall Street analysts have a consensus one-year price target of $230.50 on the company (compared to the current share price of $208.22), implying they see 10.7% upside in buying SPX Technologies in the short term.