Conestoga Capital Advisors, LLC on SPX Technologies, Inc.
Thesis
SPX Technologies supplies commercial HVAC, detection and measurement equipment. A strong quarter included 17% organic revenue growth and raised guidance, supporting the potential for continued compounding. The shares were pressured by investor expectations that treated SPX as a major AI infrastructure beneficiary despite data centers accounting for less than one-fifth of sales. Conestoga remains positive on the broader and more diversified earnings opportunity.
“We remain constructive on its ability to compound earnings in the years ahead”
Key risks
- Reversal in enthusiasm for AI-linked data-center stocks despite limited direct exposure.
- Rising interest rates have weakened industrial stock valuations.
- High recent organic growth may moderate from the reported 17% pace.