Perma-Pipe International Holdings, Inc. (PPIH) | Investment Case

1. Company Snapshot

1.a. Company Description

Perma-Pipe International Holdings, Inc., together with its subsidiaries, engineers, designs, manufactures, and sells specialty piping and leak detection systems.It offers provides and jacketed district heating and cooling piping systems for energy distribution from central energy plants to various locations; and primary and secondary containment piping systems for transporting chemicals, hazardous fluids, and petroleum products, as well as engages in the coating and insulation of oil and gas gathering and transmission pipelines.The company also offers liquid and powder based anti-corrosion coatings for external and internal surfaces of steel pipe, including shapes like bends, reducers, tees, and other spools/fittings that is used in pipelines for the transportation of oil and gas products and potable water.

It has operations in the United States, Canada, the Middle East, Europe, India, and internationally.The company was formerly known as MFRI, Inc.and changed its name to Perma-Pipe International Holdings, Inc.

in March 2017.Perma-Pipe International Holdings, Inc.was incorporated in 1993 and is headquartered in Niles, Illinois.

Show Full description

1.b. Last Insights on PPIH

Perma-Pipe International Holdings, Inc.'s recent performance was driven by robust Q1 fiscal 2025 financial results, with sales increasing 36.2% year-over-year to $46.7 million and net income attributable to common stock rising 243% to $5.0 million. Strong demand in the Middle East and North Africa (MENA) region, particularly in energy infrastructure, fueled growth. A new contract award in Qatar and expansion into data centers, driven by the shift to liquid cooling, present additional growth opportunities. The company's strategic hires and leadership transition, with Saleh Sagr appointed as President and CEO, also contributed to its positive momentum.

1.c. Company Highlights

Last Price	27.87
Change Percentage	-2.14%
Open	28.21
Previous Close	28.48
Market Cap ( Millions)	223
Volume	46961
Year High	33.09
Year Low	8.81
M A 50	25.76
M A 200	20.62

FCF Yield	2.14%
Dividend Yield	0.00%
ROE	13.34%
Debt / Equity	54.89%
Net Debt / EBIDTA	101.64%
Price To Book	2.78
Price Earnings Ratio	22.2
Price To FCF	46.81
Price To sales	1.23
EV / EBITDA	9.47

2. Transcript Summary

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3. NewsRoom

Perma-Pipe International Holdings, Inc. Secures $52 Million in Third-Quarter Awards, Expands Global Reach With U.S. Data Centers and Saudi Aramco Projects

Dec -03

Source: businesswire.com

Perma-Pipe: AI, HPC, And Middle East Tailwinds Coupled With An Attractive Valuation

Nov -18

Source: seekingalpha.com

2 Small Cap Geography Plays

Oct -30

Source: zacks.com

Perma-Pipe International: Overreaction Restores Upside Potential

Oct -07

Source: seekingalpha.com

Perma-Pipe International Holdings, Inc. Announces $30 Million in Contract Awards and the Strategic Milestone Approval for Saudi Aramco

Sep -24

Source: businesswire.com

PPIH's Q2 Earnings Down Y/Y, Sales Rise on Strong Middle East Demand

Sep -19

Source: zacks.com

Perma-Pipe International Holdings, Inc. Announces Second Quarter 2025 Financial Results and Initiates Exploration of Strategic Alternatives to Maximize Shareholder Value

Sep -15

Source: businesswire.com

Perma-Pipe International: Unexpected Data Center Player

Aug -05

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.90%)

6. Segments

Specialty Piping Systems and Coating

Expected Growth: 4.65%

Perma-Pipe International Holdings, Inc.'s Specialty Piping Systems and Coating segment growth of 4.65% is driven by increasing demand for corrosion protection in the oil and gas industry, expansion into new geographic markets, and strategic acquisitions. Additionally, growing adoption of high-temperature and high-pressure piping systems, as well as increasing focus on pipeline integrity and safety, contribute to the segment's growth.

Leak Detection Systems

Expected Growth: 8.37%

Perma-Pipe International Holdings, Inc.'s Leak Detection Systems growth of 8.37% is driven by increasing demand for pipeline infrastructure, rising concerns over environmental safety, and growing adoption of IoT-based monitoring solutions. Additionally, the need for efficient and cost-effective leak detection methods, coupled with government regulations and investments in pipeline maintenance, contribute to the segment's growth.

7. Detailed Products

Insulated Piping Systems

Perma-Pipe's insulated piping systems are designed to transport fluids in extreme temperatures, providing thermal insulation and corrosion protection.

Pre-Insulated Pipe Systems

Perma-Pipe's pre-insulated pipe systems provide thermal insulation and corrosion protection for pipes in various industries.

Coatings and Linings

Perma-Pipe's coatings and linings provide corrosion protection and abrasion resistance for pipes and tanks in various industries.

Field Joint Coatings

Perma-Pipe's field joint coatings provide corrosion protection for field joints in pipelines.

Pipe Fabrication

Perma-Pipe's pipe fabrication services provide custom pipe fabrication solutions for various industries.

Engineering and Design Services

Perma-Pipe's engineering and design services provide customized solutions for piping systems and pipeline projects.

8. Perma-Pipe International Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Perma-Pipe International Holdings, Inc. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the availability of alternative materials and technologies.

Bargaining Power Of Customers

Perma-Pipe International Holdings, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are often customized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Perma-Pipe International Holdings, Inc. relies on a few key suppliers for raw materials, which gives them some bargaining power. However, the company's long-term relationships with suppliers and its ability to negotiate prices mitigate this risk.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the piping industry, including significant capital expenditures and regulatory hurdles. Additionally, Perma-Pipe International Holdings, Inc. has established relationships with customers and suppliers, making it difficult for new entrants to gain traction.

Intensity Of Rivalry

The piping industry is highly competitive, with several established players competing for market share. Perma-Pipe International Holdings, Inc. faces intense competition from rivals, which can lead to pricing pressure and reduced margins.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	18.31%
Debt Cost	5.22%
Equity Weight	81.69%
Equity Cost	5.22%
WACC	5.22%
Leverage	22.42%

11. Quality Control: Perma-Pipe International Holdings, Inc. passed 6 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

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

Perma-Pipe International Holdings

A-Score: 4.7/10

Value: 4.4

Growth: 6.8

Quality: 5.8

Yield: 0.0

Momentum: 10.0

Volatility: 1.3

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Latham

A-Score: 3.4/10

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Growth: 4.7

Quality: 2.9

Yield: 0.0

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Volatility: 2.3

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Growth: 5.8

Quality: 3.2

Yield: 0.0

Momentum: 1.5

Volatility: 4.0

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Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

0.95%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

5.22%

Perma-Pipe International Holdings, Inc. - US7141671039

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on PPIH

1.c. Company Highlights

Weak Momentum

Fairly Valued

Average Growth

Average Yield

Stable Momentum

Medium Volatility

Strong Momentum

Better Quality

More Volatile

Average Quality

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.90%)

6. Segments

Specialty Piping Systems and Coating

Expected Growth: 4.65%

Leak Detection Systems

Expected Growth: 8.37%

7. Detailed Products

Insulated Piping Systems

Pre-Insulated Pipe Systems

Coatings and Linings

Field Joint Coatings

Pipe Fabrication

Engineering and Design Services

8. Perma-Pipe International Holdings, 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: Perma-Pipe International Holdings, 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

27.87$

Current Price

27.87$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA