Graham Corporation heads into its June earnings window with a striking divergence: the stock is up 16% in a month, while short sellers have been steadily covering their positions.
The price action tells a strong story on its own. GHM closed the week at $90.76, up 47% year-to-date, though it gave back about 4% on the week after a brief pullback. The one-month gain of 16% has been broad-based — this is not a one-day squeeze. Yet shorts appear to have anticipated or participated in that run by reducing exposure: short interest has fallen roughly 16% over the past month, down to around 2.6% of the free float. That level is not extreme in absolute terms, but the direction of travel is clear. Shorts have been cutting since late March, when SI stood closer to 3.0% of float.
The options market reinforces the bullish tilt decisively. The put/call ratio has collapsed to 0.12 — near its 52-week low of 0.12 and almost 1.7 standard deviations below its 20-day average of 0.32. That is one of the most call-skewed readings GHM has seen all year. The shift was abrupt: through most of April the PCR was running above 0.45, and it dropped sharply from April 23 onward. Call buyers overwhelmed put buyers just as the stock began its latest leg higher. The borrow market, for its part, remains relaxed — cost to borrow is a negligible 0.42%, and while that's up around 38% on the week, it started from a very low base. Lending conditions pose no constraint on new shorts.
Analyst coverage is thin but directionally positive. Oppenheimer initiated with an Outperform rating in mid-March, setting a $100 target — roughly 10% above the current price. That is the most recent and most relevant data point; prior initiations from smaller firms stretch back to 2024 and 2025 at significantly lower price levels and should not be read as current views. The consensus return potential of around 6% is modest, reflecting how far the stock has already run toward targets. The PE of 43x has compressed meaningfully from over 52x a month ago, as earnings estimates have moved sharply higher: EPS momentum ranks in the 97th percentile on a 30-day basis and the 94th percentile over 90 days. The stock's EPS surprise rank of 84 suggests the company has repeatedly beaten, not just met, expectations. The EV/EBITDA of 23.6x has also de-rated by roughly 10 turns over 30 days, as the earnings upgrade cycle does the work.
Institutional ownership is diversified across a broad set of holders. Brandes Investment Partners holds the largest single stake at around 11%, unchanged through year-end. Vanguard added roughly 34,000 shares through March. William Blair added 24,000. These are quiet, incremental moves rather than aggressive accumulation or trimming. The most notable recent institutional entry in the ownership data is Driehaus Capital Management, which went from zero to a roughly 3.2% position. Driehaus is a growth-oriented manager, and the timing of that build aligns with the period when GHM's earnings upgrade cycle was becoming visible.
The February earnings print is a useful reference point. The stock jumped 15% on the day results were released and held most of that gain over the following week, closing five days later still up more than 14%. The next event is scheduled for June 9. With EPS momentum this strong and options skewing heavily toward calls, the market appears to be positioning for another positive surprise rather than bracing for disappointment.
The key question for June 9 is whether GHM can deliver results that justify a stock now priced at 43x earnings — and whether the call-heavy options skew holds through the quiet period ahead.
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