Powell Industries (NASDAQ:POWL) has been one of my best decisions in recent memory. I bought shares in June 2024 at $55.17 per share, and as of April 7, 2026, the stock sits at $201.70, a gain of 265%. I’ve been watching pretty much every earnings release, backlog update, and order announcement from Powell for nearly two years now, and the thesis has only gotten stronger.
Why I Bought in June 2024
Powell makes custom-engineered electrical switchgear and distribution equipment for utilities, LNG terminals, petrochemical plants, and industrial facilities. The U.S. was in the early innings of a grid infrastructure buildout, LNG export capacity was expanding rapidly, and Powell had a growing backlog pointing to years of visible revenue. The stock was cheap relative to expected earnings power.
What Has Played Out Since
Execution has been the story. Gross margins expanded consistently: 29.9% in Q2 FY2025, 30.7% in Q3, 31.4% in Q4, and 28.4% in Q1 FY2026. EPS beat consensus every quarter: +11%, +5%, +12%, and +17%.
The data center angle arrived as a bonus. In Q1 FY2026, Powell booked its first data center megaproject exceeding $75 million, with total data center orders exceeding $100 million in the quarter. CEO Brett Cope explained:
“The rapid pace of data center development and AI investment is leading to larger and more numerous opportunities for Powell in our Commercial & Other Industrial market, demonstrated by the growing market opportunity for our medium-voltage switchgear product to handle the power demands of larger data centers with greater computing power.”
—Brett Cope, Powell Industries Q1 FY2026 Earnings Call
The backlog is now a record $1.60 billion, supported by 1.7x book-to-bill ratio and $439 million in new orders in Q1 alone. The company completed a 3-for-1 stock split effective April 6, 2026 and holds $500.8 million in cash with minimal debt growth.
On the Insider Selling
Some readers flagged insider sales as a concern. The transaction data shows EVP Michael Metcalf executed 20 separate tranches on a single day, March 31, 2026, at prices ranging from roughly $510 to $541, the hallmark of a pre-arranged Rule 10b5-1 plan. CEO Cope sold just 1,480 shares on March 12. Seven directors received 200 shares each at $0.01 in February as standard compensation grants. This is scheduled plan execution by insiders following pre-arranged 10b5-1 plans. This doesn’t concern me whatsoever. I rarely pay attention to insider selling, but I love to dive into insider buying.
Why I Am Still Holding
The backlog provides multi-quarter revenue visibility. Electric Utility revenues rose 35% year over year in Q1 FY2026, with momentum expected to sustain. LNG activity is expected to persist across the back half of this decade. The Remsdaq acquisition adds margin-accretive SCADA automation capability, and the Jacintoport facility expansion completes in H2 FY2026.
The 247 Wall St base price target sits at $223.88 with a high confidence rating. The forward P/E stands at 12x against forward EPS of $17.55. That is not an expensive multiple for a company with a record backlog, expanding margins, and three secular tailwinds pulling in the same direction.
I bought Powell because I believed the electrical infrastructure supercycle was real and Powell was positioned to benefit. Two years later, the data center tailwind has added a fourth engine. The thesis has not broken. I am still holding.
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