Woodward, Inc. (WWD) | Investment Case

1. Company Snapshot

1.a. Company Description

Woodward, Inc.designs, manufactures, and services control solutions for the aerospace and industrial markets worldwide.The company operates through two segments: Aerospace and Industrial.

The Aerospace segment provides fuel pumps, metering units, actuators, air valves, specialty valves, fuel nozzles, and thrust reverser actuation systems for turbine engines and nacelles, and flight deck controls, actuators, servocontrols, motors, and sensors for aircraft.These products are used on commercial and private aircraft and rotorcraft, as well as on military fixed-wing aircraft and rotorcraft, guided weapons, and other defense systems.It also provides aftermarket maintenance, repair and overhaul, and other services to commercial airlines, repair facilities, military depots, third party repair shops, and other end users.

This segment sells its products to original equipment manufacturers (OEMs), tier-one suppliers, and various contractors, as well as through aftermarket sales of components, such as provisioning spares or replacements, and spare parts.The Industrial segment offers actuators, valves, pumps, fuel injection systems, solenoids, ignition systems, speed controls, electronics and software, and sensors.These products are used on industrial gas turbines, steam turbines, compressors, and reciprocating engines.

This segment sells its aftermarket products, and other related services to OEMs through an independent network of distributors, as well as directly to end users.The company was founded in 1870 and is headquartered in Fort Collins, Colorado.

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1.b. Last Insights on WWD

Woodward, Inc.'s recent performance was driven by strong Q4 earnings, fueled by growth in Aerospace and Industrial segments, as well as a key acquisition. The company's quarterly earnings of $2.09 per share beat estimates, representing a 48% year-over-year surge. A positive outlook for 2026, driven by aerospace recovery, defense tailwinds, and improving operating leverage, also contributed to the momentum. Additionally, rising production rates for Boeing and Airbus programs, along with defense and power generation demand, support a positive multi-year outlook.

1.c. Company Highlights

Last Price	303.45
Change Percentage	0.60%
Open	303.65
Previous Close	301.64
Market Cap ( Millions)	18197
Volume	473379
Year High	304.72
Year Low	146.82
M A 50	264.74
M A 200	230.11

FCF Yield	1.52%
Dividend Yield	0.37%
ROE	18.46%
Debt / Equity	9.56%
Net Debt / EBIDTA	-17.08%
Price To Book	7.09
Price Earnings Ratio	41.13
Price To FCF	65.67
Price To sales	5.1
EV / EBITDA	37.64

2. Woodward's 2025 Earnings: A Record-Breaking Year

Woodward, Inc. reported a record-breaking revenue of $3.6 billion in 2025, marking a 7% increase driven by strong performance in both its Aerospace and Industrial business segments. The Aerospace segment saw a 14% rise in sales to a record high, with margin expansion of 290 basis points. The company's adjusted earnings per share (EPS) also reached an all-time high, increasing by nearly 13% to $2.23, surpassing analyst estimates of $1.83. The Industrial segment reported healthy sales growth of approximately 10% excluding China. The company's net cash provided by operating activities was $471 million, and free cash flow was $340 million.

Publication Date: Nov -25

                                    📋 Highlights
                                    Record Revenue & Margin Expansion::
                                                2025 revenue hit $3.6B (+7%), with Aerospace margins expanding 290 bps and Industrial margins up despite core sales growth of 10% (excluding China).
Aerospace Dominates Growth::
                                                Segment sales reached $2.3B (+14%), driven by 38% defense OEM growth and 29% commercial services surge, earning $507M.
Strong Cash Flow & Shareholder Returns::
                                                Generated $471M operating cash flow and $340M free cash flow, returning $238M to shareholders via dividends and buybacks under a new $1.8B repurchase program.
2026 Guidance Confirmed::
                                                Targets 7–12% sales growth, $7.50–$8.00 adjusted EPS, and $300–$350M free cash flow, with $650–$700M planned shareholder returns and $290M capex for automation and Spartanburg expansion.

                                

Segment Performance

Aerospace segment sales for 2025 were $2.3 billion, up 14%, driven by a 29% increase in commercial services sales and a 38% rise in defense OEM sales. Aerospace earnings for 2025 were $507 million, with margins expanding 290 basis points. The Industrial segment reported sales of $1.25 billion, a decrease of 3%, but excluding China's impact, core industrial sales increased by 10%. Industrial segment earnings for 2025 were $183 million.

Cash Flow and Shareholder Returns

The company generated significant cash flow, returning over $238 million to stockholders through share repurchases and dividends. A new three-year share repurchase program authorizing up to $1.8 billion of common stock has been announced. For fiscal year 2026, Woodward expects to return $650-$700 million to shareholders in the form of dividends and share repurchases.

Guidance and Outlook

Woodward guides for fiscal year 2026 with net sales growth between 7-12%, driven by sustained strong demand, with Aerospace sales growth of 9-15% and Industrial sales growth of 5-9%. The company expects adjusted earnings per share of $7.50-$8.00 and adjusted free cash flow of $300-$350 million. With a current P/E Ratio of 35.4 and an EV/EBITDA of 32.38, the market appears to have high expectations for the company's future performance. Analysts estimate next year's revenue growth at 10.0%, indicating a continued upward trajectory.

Margin Expectations

The company expects to expand margins, driven by plans to advance automation and programs like automation benefits. Service margins on LEAP and GTF are good, with the primary driver of rate expansion being the OE mix. The company also discussed the dynamic between LTSA and spot aftermarket on LEAP versus CFM, noting no structural difference in profitability between the two platforms in the aftermarket over time.

3. NewsRoom

Woodward (NASDAQ:WWD) and BWX Technologies (NYSE:BWXT) Head-To-Head Analysis

Dec -07

Source: defenseworld.net

John Cohn Sells 3,000 Shares of Woodward (NASDAQ:WWD) Stock

Dec -03

Source: defenseworld.net

Creative Planning Trims Stock Holdings in Woodward, Inc. $WWD

Nov -29

Source: defenseworld.net

Advisors Asset Management Inc. Purchases 1,121 Shares of Woodward, Inc. $WWD

Nov -28

Source: defenseworld.net

Woodward: A Solid Player in Aerospace or Just Average?

Nov -27

Source: fool.com

This Boeing Supplier Scores A Big Breakout

Nov -25

Source:

Woodward's Q4 Earnings Surge 48% Y/Y, Revenues Beat, Shares Rise

Nov -25

Source:

Woodward, Inc. (WWD) Q4 2025 Earnings Call Transcript

Nov -25

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.62%)

6. Segments

Aerospace

Expected Growth: 4.5%

Woodward, Inc.'s Aerospace segment growth of 4.5% is driven by increasing demand for fuel-efficient aircraft, rising defense spending, and growing adoption of unmanned aerial vehicles (UAVs). Additionally, the company's focus on innovative engine control systems, propulsion systems, and aftermarket services contributes to its growth momentum.

Industrial

Expected Growth: 4.8%

Woodward Inc.'s Industrial segment growth of 4.8% is driven by increasing demand for industrial gas turbines, expansion in the aerospace market, and growing adoption of renewable energy sources. Additionally, the company's focus on innovation and R&D investments in industrial valves and actuators is contributing to the segment's growth.

7. Detailed Products

Aerospace Control Systems

Woodward's aerospace control systems provide advanced engine control and fuel systems for commercial and military aircraft, as well as for industrial and marine applications.

Aerospace Fuel Systems

Woodward's aerospace fuel systems provide advanced fuel management and delivery systems for commercial and military aircraft, as well as for industrial and marine applications.

Industrial Turbomachinery Controls

Woodward's industrial turbomachinery controls provide advanced control systems for industrial gas turbines, compressors, and pumps.

Industrial Valve Systems

Woodward's industrial valve systems provide advanced valve solutions for industrial applications such as power generation, oil and gas, and process industries.

Wind Turbine Systems

Woodward's wind turbine systems provide advanced control and pitch systems for wind turbines.

Industrial Gas and Steam Turbine Systems

Woodward's industrial gas and steam turbine systems provide advanced control and fuel systems for industrial gas and steam turbines.

8. Woodward, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Woodward, Inc. is moderate due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the concentration of buyers in the market, giving them significant negotiating power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the availability of multiple suppliers in the market, reducing their negotiating power.

Threat Of New Entrants

The threat of new entrants is moderate due to the moderate barriers to entry and the availability of resources in the market.

Intensity Of Rivalry

The intensity of rivalry is high due to the high level of competition in the market, leading to a competitive pricing strategy.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	25.84%
Debt Cost	7.88%
Equity Weight	74.16%
Equity Cost	10.43%
WACC	9.77%
Leverage	34.84%

11. Quality Control: Woodward, Inc. passed 6 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Huntington Ingalls

A-Score: 5.3/10

Value: 4.7

Growth: 4.2

Quality: 5.0

Yield: 4.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

Woodward

A-Score: 5.0/10

Value: 1.1

Growth: 5.6

Quality: 6.7

Yield: 0.0

Momentum: 9.0

Volatility: 7.7

1-Year Total Return ->

Textron

A-Score: 4.9/10

Value: 5.5

Growth: 5.9

Quality: 5.2

Yield: 0.0

Momentum: 4.0

Volatility: 8.7

1-Year Total Return ->

BWXT

A-Score: 4.7/10

Value: 0.2

Growth: 6.3

Quality: 5.3

Yield: 1.0

Momentum: 9.5

Volatility: 5.7

1-Year Total Return ->

Axon Enterprise

A-Score: 4.6/10

Value: 0.0

Growth: 9.6

Quality: 5.1

Yield: 0.0

Momentum: 9.0

Volatility: 4.0

1-Year Total Return ->

AAR

A-Score: 4.4/10

Value: 4.5

Growth: 4.9

Quality: 3.1

Yield: 0.0

Momentum: 8.5

Volatility: 5.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

21.22%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.77%

Woodward, Inc. - US9807451037

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on WWD

1.c. Company Highlights

Expensive

Less Volatile

Average Quality

Earnings Beats

Revenues Beats

Strong Momentum

Average Yield

Stable Momentum

Average Growth

Better Quality

Medium Volatility

Revenues Miss

2. Woodward's 2025 Earnings: A Record-Breaking Year

Segment Performance

Cash Flow and Shareholder Returns

Guidance and Outlook

Margin Expectations

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.62%)

6. Segments

Aerospace

Expected Growth: 4.5%

Industrial

Expected Growth: 4.8%

7. Detailed Products

Aerospace Control Systems

Aerospace Fuel Systems

Industrial Turbomachinery Controls

Industrial Valve Systems

Wind Turbine Systems

Industrial Gas and Steam Turbine Systems

8. Woodward, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Woodward, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

303.45$

Current Price

303.45$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA