Graham Corporation (GHM) saw its stock price plummet 6.36% in pre-market trading on Tuesday, following the release of its first-quarter fiscal 2026 financial results. Despite reporting overall growth in sales and profitability, the company's revenue fell short of analyst expectations, leading to a negative market reaction.

The industrial machinery manufacturer reported Q1 sales of $55.49 million, representing an 11% increase year-over-year. However, this figure missed the consensus estimate of $56.60 million provided by four analysts. On a more positive note, Graham's net income per diluted share rose 56% to $0.42, and adjusted EBITDA grew 33% to $6.84 million, beating the estimate of $5.35 million.

While Graham Corporation reaffirmed its fiscal 2026 guidance, including net sales of $225 million to $235 million and adjusted EBITDA of $22 million to $28 million, investors appear to be focusing on the revenue miss. The company's growth was primarily driven by major commercial projects and robust aftermarket demand in Energy & Process markets, as well as large defense orders. However, the market's reaction suggests that expectations were set higher, possibly due to the recent strong performance of the stock, which had been trading at 40 times the next 12-month earnings compared to a P/E of 26 three months ago.