• EN

    • -+ 0.00%
    -+ 0.00%
    -+ 0.00%

    Power Solutions International (PSIX): Valuation Check After Surging Sales, EPS Growth and AI Data Center Pivot

    Simply Wall St·12/05/2025 13:29:50
    Listen to the news

    Power Solutions International (PSIX) just posted a standout quarter, with sales up 62% and EPS up 60% year over year. This performance underscores its pivot toward higher margin, AI data center power solutions.

    See our latest analysis for Power Solutions International.

    That growth story has been mirrored in the share price, with a 1 day share price return of 4.2 percent and 7 day share price return of 13.0 percent, even after a sharp 31 percent 30 day pullback. The 1 year total shareholder return of 97.8 percent and 3 year total shareholder return of roughly 1,698 percent suggest long term momentum is still very much intact.

    If this kind of AI infrastructure demand has your attention, it could be a good moment to scout other high growth tech and AI names through high growth tech and AI stocks.

    With Wall Street targets sitting nearly double the last close and intrinsic value screens still flagging a steep discount, is PSIX an overlooked AI infrastructure winner, or is the market already baking in years of hypergrowth?

    Price-to-Earnings of 11.6x: Is it justified?

    On a price-to-earnings ratio of 11.6 times, Power Solutions International looks markedly cheap versus its recent $61.12 close and its high growth profile.

    The price to earnings multiple compares what investors pay today for each dollar of current earnings and is a core yardstick for profitable industrial and electrical equipment companies. For a business growing earnings at triple digit rates and tied to structurally rising data center power demand, such a modest multiple suggests the market is still discounting the durability of its current profitability and growth trajectory.

    Against this backdrop, PSIX trades at a substantial markdown to both the US Electrical industry average price to earnings of 31.2 times and the peer group average of 26 times. These are levels the market could migrate toward if it gains confidence in future earnings. Our fair price to earnings estimate of 50.3 times implies an even steeper gap, highlighting how far sentiment and the share price may need to rerate to align with its earnings power.

    Explore the SWS fair ratio for Power Solutions International

    Result: Price-to-Earnings of 11.6x (UNDERVALUED)

    However, sustained multiple expansion hinges on continued AI data center demand and flawless execution, while any slowdown or project delays could quickly compress this valuation.

    Find out about the key risks to this Power Solutions International narrative.

    Another View: DCF Signals Even Deeper Value

    While the earnings multiple makes PSIX look cheap, our DCF model goes further, putting fair value near $254.70, roughly 76 percent above the current $61.12 price. If that long term cash flow story is right, is the market misreading how durable this cycle could be?

    Look into how the SWS DCF model arrives at its fair value.

    PSIX Discounted Cash Flow as at Dec 2025
    PSIX Discounted Cash Flow as at Dec 2025

    Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Power Solutions International for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 912 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

    Build Your Own Power Solutions International Narrative

    If you see the numbers differently or like to dig into the data yourself, you can craft a personalized view in just minutes: Do it your way.

    A great starting point for your Power Solutions International research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

    Ready for more high conviction ideas?

    Do not stop at one opportunity; use the Simply Wall St Screener now to uncover focused, data driven stock ideas before other investors catch on.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.