Breaking Down Taylor Devices, Inc. (TAYD) Financial Health: Key Insights for Investors

If you're looking at Taylor Devices, Inc. (TAYD), you're defintely focused on how a small-cap precision engineering firm navigates a choppy economic environment, and the headline is that their financial health is surprisingly robust, but with a key shift in market dependency. The company closed out fiscal year 2025 with record-breaking results, posting full-year sales of $46.29 million and net income of $9.41 million, translating to an impressive $3.01 in earnings per share (EPS). This performance, which included a massive 49.2% surge in Q4 net income to $3.69 million, was powered almost entirely by the Aerospace/Defense and Industrial sectors, which now account for about 71% of total revenue, successfully offsetting the drag from the interest-rate-sensitive Structural market. Still, you need to watch the forward-looking indicators: they entered fiscal year 2026 with a firm order backlog of $27.1 million, a dip from the prior year's entry point, so the focus now shifts to converting that pipeline quickly to maintain their 20.3% net margin. This is a high-quality balance sheet with a current ratio of 6.88, but you need to understand the concentration risk in their core markets.

Revenue Analysis

You want to know if the growth story at Taylor Devices, Inc. (TAYD) is holding up, and the short answer is yes, but the engine driving that growth is shifting. The company hit a record high for sales in the fiscal year (FY) ending May 31, 2025, reaching a total of $46.29 million.

This result represents a year-over-year revenue growth rate of 3.8% over the FY2024 sales of $44.58 million. Honestly, that growth is solid, especially considering the economic headwinds in some of their core markets. It shows the value of their highly specialized products-things like fluidic dampers and shock absorbers-which are engineered-to-order components where mechanical failure isn't an option.

The Shifting Mix of Primary Revenue Streams

Taylor Devices, Inc. segments its revenue primarily across three customer-facing product groups: Aerospace/Defense, Structural, and Industrial. The big trend here is the increasing reliance on the defense sector, which provides more stable, long-term contracts.

Here's the quick math on where the future revenue is locked in, based on the firm order backlog of $27.1 million as of the end of FY2025:

• Aerospace/Defense: Accounted for 75% of the backlog.
• Structural: Made up 19% of the backlog.
• Industrial: The remaining portion, which is still a vital contributor.

That 75% backlog share for Aerospace/Defense is a significant jump from prior years, and it's a clear signal of where management is focusing its efforts to secure revenue stability. This is a deliberate strategic move to lean into military contracts, which tend to be more resilient to cyclical downturns than commercial construction.

Geographic Concentration and Market Headwinds

The vast majority of Taylor Devices, Inc.'s sales remain domestic. The United States of America (USA) segment was the primary driver, contributing approximately 79% of the total revenue in the trailing twelve months leading up to August 2025.

What this geographic estimate hides is the impact of global economics on the other 21%. The company faced continued headwinds in its Structural markets-think large-scale construction projects like bridges and buildings in seismic zones-due to higher interest rates and unfavorable foreign exchange rates (forex). But, to be fair, the positive momentum in the Aerospace/Defense and Industrial markets was strong enough to offset those structural challenges and still deliver record-high sales. The diversification across these three markets is defintely helping them navigate a choppy economic environment.

The key action for you as an investor is to watch the backlog composition. The firm order backlog of $27.1 million is slightly down from the $33.1 million they entered FY2025 with, but the quality of that backlog is higher-it's heavily weighted toward the more reliable defense sector. For a deeper dive into the company's long-term vision, you can review their Mission Statement, Vision, & Core Values of Taylor Devices, Inc. (TAYD).

Profitability Metrics

You want to know if Taylor Devices, Inc. (TAYD) is a well-run, profitable company, and the quick answer is a resounding yes. The company's fiscal year (FY) 2025 results show market-leading profitability, with a net profit margin of over 20% that few competitors in the Machinery industry can touch.

For FY 2025, Taylor Devices, Inc. posted record sales of $46.29 million, which translated into a net income of $9.41 million. Here's the quick math: that works out to a net profit margin of 20.3%, a slight improvement from the 20.2% reported in FY 2024. This kind of margin consistency at a high level is defintely a sign of strong pricing power and disciplined cost control.

Operational efficiency is where Taylor Devices, Inc. truly shines. The gross profit margin-the revenue left after paying for the cost of goods sold-was approximately 46.4% for FY 2025. This is a formidable number, and it suggests a significant competitive advantage in their specialized vibration control products. Even after accounting for General & Administrative (G&A) expenses, which were around $11.4 million for the trailing twelve months (TTM), the estimated operating profit margin sits at a healthy 21.8%.

To be fair, you should always compare a company against its peers. When you look at the Trailing Twelve Months (TTM) profitability ratios for Taylor Devices, Inc. against the broader US Machinery industry, the outperformance is clear. This isn't just a good company; it's a sector leader in turning sales into profit.

The trend is also encouraging. Net income for FY 2025 was up 4.6% year-over-year. The CEO noted that the favorable gross margins were a direct result of the team's excellent work on continuous improvements, which is a great sign of proactive cost management, not just luck. This focus on operational efficiency is what allows them to maintain a high gross margin even as the product mix shifts.

Still, what this estimate hides is the inherent volatility in their Structural markets, which faced headwinds in FY 2025 due to higher interest rates and unfavorable foreign exchange rates. The growth came from positive momentum in their Aerospace/Defense and Industrial markets, showing the benefit of market diversification. For more on the drivers behind these numbers, you should check out Exploring Taylor Devices, Inc. (TAYD) Investor Profile: Who's Buying and Why?

Here are the key takeaways for your investment decision:

• Net Margin is double the industry average.
• Gross Margin strength points to a strong competitive moat.
• Profitability is growing, with FY2025 Net Income up 4.6%.

Debt vs. Equity Structure

You're looking at Taylor Devices, Inc. (TAYD) and wondering how they fund their operations, especially in a capital-intensive sector like specialized industrial machinery. The direct takeaway is this: Taylor Devices, Inc. operates with virtually zero financial leverage.

The company is a rare example of a debt-free business in the industrials sector. This means both their short-term debt and long-term debt levels for the fiscal year ended May 31, 2025, were $0. This rock-solid financial structure is a core part of their investment profile, providing a massive cushion against economic downturns or interest rate spikes.

This conservative approach shows up clearly in the Debt-to-Equity (D/E) ratio, which is a measure of financial leverage (total debt divided by shareholder equity). Here's the quick math:

• Total Debt (FY 2025): $0
• Total Stockholders' Equity (FY 2025): Approximately $61,434,847
• Debt-to-Equity Ratio: 0.00

A D/E ratio of 0.00 is defintely a strong signal of financial health. It means every dollar of the company's assets is financed by owner's equity, not by creditors. This is a significant outlier when you compare it to the industry benchmarks for 2025:

The company's ratio is dramatically lower than the average of 0.38 for the Aerospace & Defense industry and 0.5002 for the broader Industrial Machinery sector. This low leverage strategy means Taylor Devices, Inc. carries no interest expense burden, allowing more of its operating income to flow directly to net income.

Since the company is debt-free, there has been no need for recent debt issuances, credit ratings, or refinancing activity. Instead, Taylor Devices, Inc. relies almost entirely on internally generated cash flow and retained earnings to fund its growth, capital expenditures (CapEx), and working capital needs. For example, the company's free cash flow was about $4.3 million in the nine months leading up to the end of FY2025. Equity issuance is minimal-around $240,000 in the first nine months of FY2025, which was largely offset by share buybacks of $140,000. They self-fund comfortably.

The trade-off here is that while the financial risk is near-zero, the conservative capital structure might signal a limited appetite for aggressive, debt-fueled growth or major acquisitions. For a deeper look at who is investing in this low-risk, high-margin business, you should check out Exploring Taylor Devices, Inc. (TAYD) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You need to know if Taylor Devices, Inc. (TAYD) has the cash on hand to meet its short-term obligations, and the answer is a resounding yes. The company's liquidity position is defintely a core strength, backed by a significant cushion of cash and short-term investments that far exceed its current liabilities. This is a debt-free balance sheet, which is rare for an industrial manufacturer.

The most recent data, as of the first quarter of fiscal year 2026 (ended August 31, 2025), shows a remarkably strong liquidity profile. Here's the quick math on the key ratios:

• Current Ratio: The current ratio, which compares current assets to current liabilities, stood at 9.21 as of October 2025, up significantly from 5.88 at the end of fiscal year 2025 (May 31, 2025). A ratio above 2.0 is generally considered healthy, so this is exceptional.
• Quick Ratio: The quick ratio (or acid-test ratio), which excludes inventory, was 7.54 in October 2025, compared to 4.90 in May 2025. This tells you that even without selling a single component from inventory, Taylor Devices, Inc. can cover its immediate bills more than seven times over.

This massive liquidity is driven by the company's substantial holdings in cash and short-term investments, totaling approximately $36.3 million in liquid assets as of August 31, 2025.

Working Capital and Cash Flow Trends

The trend in working capital (Current Assets minus Current Liabilities) is also highly favorable. It increased from $46.71 million at the close of FY 2025 to $49.59 million in the first quarter of FY 2026. This increase suggests that the company is accumulating more current assets than current liabilities, which is a sign of financial stability. Still, you should watch the underlying components, as a strong ratio can hide operational shifts.

Looking at the cash flow statement provides a clearer picture of where the money is coming from and going:

The company continues to self-fund comfortably, but the modest operating cash flow in Q1 FY2026, despite a strong balance sheet, is a trend to monitor. While the balance sheet is pristine, the drop in operating cash flow from $6.7 million to $5.5 million for the nine-month period ending February 28, 2025, was mainly due to higher working capital needs like receivables and inventory. This means they are tying up more cash in the business cycle, which isn't a liquidity crisis, but it does affect cash conversion. For more on the strategic implications of these shifts, you can read the full post: Breaking Down Taylor Devices, Inc. (TAYD) Financial Health: Key Insights for Investors.

The biggest strength is the lack of debt and the sheer volume of liquid assets. What this estimate hides, however, is the reliance on a few large defense contracts, which can make revenue lumpy. A delay in a single major payment could temporarily strain receivables, but the overall cash position is a huge buffer against this risk. You defintely have a business here that is built to withstand a downturn.

Valuation Analysis

Is Taylor Devices, Inc. (TAYD) overvalued or undervalued? The quick answer is that TAYD is trading at what looks like a fair-to-undervalued level against its historical average and its Industrials sector peers, but this assessment is based on extremely thin analyst coverage. You should focus on the underlying profitability driving these multiples, which for the 2025 fiscal year has been strong.

Key Valuation Multiples (FY 2025)

When I look at TAYD, I defintely start with the core valuation multiples-these are the most concrete way to map the market's expectation against the company's real assets and earnings. The Trailing Price-to-Earnings (P/E) ratio, a measure of how much investors are willing to pay for every dollar of past earnings, stands at 17.68. This is notably lower than the broader Industrials sector average of roughly 25.15, suggesting TAYD is trading at a discount to its peer group.

The Enterprise Value-to-EBITDA (EV/EBITDA) ratio, which gives you a clearer picture of the company's operating cash flow relative to its total value (including debt), is currently 10.10. This is a healthy number, showing that the market is not overpaying for TAYD's operating performance. Plus, the Price-to-Book (P/B) ratio of 2.26 indicates the stock is trading at a reasonable premium to its net asset value, which is common for a specialized engineering firm.

Stock Performance and Analyst View

The market has recognized TAYD's record performance in the 2025 fiscal year, which saw Earnings Per Share (EPS) hit $3.01 and revenue reach $46.3 million. The stock price reflects this momentum. Starting the year at $41.62 on January 1, 2025, TAYD shares have climbed by 15.1% to a recent price of approximately $47.91 as of November 20, 2025. The 52-week range tells the full story of volatility and opportunity, moving between a low of $29.50 and a high of $53.73.

Here's the quick math on the analyst side: there is minimal coverage, which is a major risk factor for liquidity and price stability. Only one analyst has recently provided a 12-month price target, setting it at $48.00. This target is essentially flat against the current trading price, suggesting the stock is fully priced right now. The consensus rating is split between a 'Hold' and a 'Strong Buy', which honestly just tells you the market is still trying to figure out the long-term growth trajectory.

• Stock is up 15.1% year-to-date through November 2025.
• 52-week price range is $29.50 to $53.73.
• Average analyst price target is $48.00.

Dividend Policy and Shareholder Return

Taylor Devices, Inc. is not a dividend stock. The company's Forward Dividend Yield and Trailing Dividend Yield are both 0.00% as of November 2025, and the Payout Ratio is not applicable. This is a company focused on reinvesting its earnings back into the business, which is typical for a growth-oriented, specialized industrial firm. Instead of cash dividends, TAYD has generated shareholder value through capital appreciation, and also through a buyback yield of 3.03%. If you are looking for income, this is not the right vehicle. If you want to dive deeper into the strategic intent behind their capital allocation, you can review their Mission Statement, Vision, & Core Values of Taylor Devices, Inc. (TAYD).

Risk Factors

You're looking at Taylor Devices, Inc. (TAYD) because the fiscal year 2025 results were strong-record sales of $46.3 million and net income of $9.4 million-but you need to look past those headline numbers. The real work for an investor is mapping the risks that could derail that momentum. Honestly, the biggest risks for Taylor Devices are not new, but their impact is growing because the company is leaning so heavily into one sector.

Internal and Operational Concentration Risks

The core vulnerability for Taylor Devices, Inc. is concentration risk, both in its customer base and its physical footprint. This isn't a company with sprawling manufacturing; it runs out of a single plant in North Tonawanda, New York. If there's any major disruption-a labor issue, a key material shortage, or a mechanical failure-production for the entire company essentially stops. That's a defintely high-impact operational risk.

Financial risk is also tied to customer concentration, especially in the defense sector. The company's sales order backlog at the end of fiscal 2025 was $27.1 million, down from $33.1 million the prior year, and approximately 75% of that remaining backlog value is for aerospace/defense customers. This reliance means a few contracts drive the majority of near-term revenue. For perspective, four customers accounted for 40% of the company's revenue in the preceding fiscal year, which is a single point of failure if one of those contracts shifts or is canceled.

• Single-plant operation: High vulnerability to any physical disruption.
• Customer concentration: 75% of backlog tied to defense sector.
• Backlog decline: Total backlog dropped from $33.1 million to $27.1 million in FY2025.

External and Strategic Headwinds

On the external front, the primary risk is political and macroeconomic. The heavy reliance on U.S. defense means Taylor Devices, Inc. is directly exposed to the volatility of the federal budget and procurement timelines. If Congress delays appropriations or shifts priorities, it can cause significant holdups in the aerospace and naval programs where the company's shock isolation systems are embedded. The timing of defense contracts is always unknowable, and that limits your visibility into new order flow.

Also, the structural construction market remains a headwind. Management noted in their fiscal 2025 reports that higher interest rates and unfavorable foreign exchange rates continued to pressure performance in this segment, which accounted for only 19% of the backlog at May 31, 2025. Competition is also a factor, particularly in mature aerospace and defense programs where other companies offer hydraulic energy absorbers or competing technologies that aren't necessarily of similar design to Taylor Devices' products.

The company's mitigation strategy is less about radical diversification and more about doubling down on what works: operational efficiency and strategic investment. They are focused on diligent execution of profitable growth strategies and continued investments in people, technology, processes, and facilities, which helped them achieve a gross profit margin of 46% in FY2025. Still, without a clear pickup in new structural or industrial orders, the defense exposure remains the dominant risk. For a deeper dive into who is betting on Taylor Devices, Inc. despite these factors, you should read Exploring Taylor Devices, Inc. (TAYD) Investor Profile: Who's Buying and Why?.

Growth Opportunities

You want to know where Taylor Devices, Inc. (TAYD) goes from here, especially after a record-setting year. The short answer is that the company is defintely positioned for continued growth, but the momentum is shifting away from their traditional structural markets and heavily toward defense and industrial applications. You need to focus on their specialized technology moat and their clear expansion into military markets.

Fiscal Year 2025 was a record for both sales and profit, with full-year revenue hitting $46.3 million and net income climbing to $9.4 million. That's a solid 3.8% and 5% growth, respectively, over the prior year. The real story is that this growth came despite headwinds in the Structural markets-think higher interest rates slowing down construction-which means their other segments are pulling significant weight.

Growth Drivers: Aerospace/Defense and Industrial Strength

The primary engines for Taylor Devices' near-term growth are the Aerospace/Defense and Industrial sectors. Their core product, the Fluid Viscous Damper (FVD), is a highly engineered shock absorption system that started with a NASA contract back in the 1960s to protect launch systems. This history of mission-critical, high-reliability application is a massive competitive advantage.

• Aerospace/Defense: Strong demand for shock attenuation solutions in naval shipbuilding and weapon systems.
• Industrial: Increased need for high-precision vibration control in heavy machinery and equipment.
• Product Innovation: Their seismic dampers are unique, often being the only solution that reduces stress, deflection, and acceleration in a structure, sometimes allowing for immediate occupancy after a major earthquake. That's a powerful selling point.

Here's the quick math on the forward view: Analysts forecast Taylor Devices' revenue to grow at an average of 8.2% per annum over the next three years. That's a significant acceleration from the FY 2025 growth rate and outpaces the broader US Machinery industry's projected 5.0% growth. For Fiscal Year 2026, the CEO is projecting earnings per share (EPS) to land between $1.25 and $1.35.

Strategic Expansion and Competitive Moat

The company isn't just relying on organic demand; they are executing a clear market expansion strategy. In July 2025, Taylor Devices signed an exclusive agreement with Force Development Services (FDS) Ltd.. This partnership makes FDS the sole supplier of Taylor's NATO-approved technology for containerized mission modules across the UK and European Military markets. This is a direct, actionable step into a high-margin, specialized international defense market.

Their competitive advantage is essentially a deep, specialized engineering moat. Their products are engineered-to-order (ETO), meaning they custom-build complex solutions for mission-critical applications like missile launch structures, naval ships, and landmark buildings. This insulates them from the brutal pricing pressure that hits commodity manufacturers. Plus, the firm order backlog of $27.1 million entering FY 2026 gives them excellent revenue visibility for the near term.

To understand the depth of their market position and who is investing in this unique technology, you should check out Exploring Taylor Devices, Inc. (TAYD) Investor Profile: Who's Buying and Why?

The table below summarizes the key financial metrics that underpin this growth narrative:

The company is making the right investments in technology and facilities to sustain this momentum into Fiscal Year 2026 and beyond. The risk is still the Structural segment, which faces higher interest rate pressure, but the strength in Aerospace/Defense is more than compensating for it.