BWX Technologies: A Wide Moat And Strong Future Growth

2026-02-03 00:29:05 ET

Recap

I last covered BWX Technologies ( BWXT ) in July of last year when the stock traded for about $150 per share and appeared about 8% undervalued based on my custom free cash flow valuation model. I rated the stock a BUY due to excellent revenue growth, reliable margins, and strong barriers to entry - particularly related to the Government segment. Since my initial coverage , the stock has risen significantly, but not without a few bumps along the way. As you can see from the chart below, shortly after the November 2025 mark, BWXT declined following their Q3 2025 earnings amid high valuation concerns as the stock traded for close to 55x future earnings. Soon after that drop-off, BWXT suffered more downward pressure as a result of a convertible notes offering of $1.0B, which was priced at a conversion premium of 32.5%. However, since the new year, the stock has returned to its November highs at more than $205 per share....

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