Over the past six months, SPX Technologies’s shares (currently trading at $143.96) have posted a disappointing 8.9% loss, well below the S&P 500’s 3.8% gain. This was partly driven by its softer quarterly results and might have investors contemplating their next move.

Following the pullback, is now an opportune time to buy SPXC? Find out in our full research report, it’s free.

Why Is SPXC a Good Business?

SPX Technologies (NYSE:SPXC) is an industrial conglomerate catering to the energy, manufacturing, automotive, and aerospace sectors.

1. Core Business Firing on All Cylinders

Investors interested in Gas and Liquid Handling companies should track organic revenue in addition to reported revenue. This metric gives visibility into SPX Technologies’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.

Over the last two years, SPX Technologies’s organic revenue averaged 10.9% year-on-year growth. This performance was impressive and shows it can expand quickly without relying on expensive (and risky) acquisitions.

2. Operating Margin Rising, Profits Up

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Analyzing the trend in its profitability, SPX Technologies’s operating margin rose by 5.5 percentage points over the last five years, showing its efficiency has meaningfully improved. . Its operating margin for the trailing 12 months was 14.6%.

3. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

SPX Technologies’s EPS grew at a remarkable 14.5% compounded annual growth rate over the last five years, higher than its 4.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Final Judgment

These are just a few reasons SPX Technologies is a high-quality business worth owning. After the recent drawdown, the stock trades at 24.6× forward price-to-earnings (or $143.96 per share). Is now a good time to initiate a position? See for yourself in our full research report, it’s free.

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