The BWX Technologies story

What drives the business

• BWXT's core business supplies precision naval nuclear components, reactors and fuel to the U.S. Department of Energy and National Nuclear Security Administration's Naval Nuclear Propulsion Program, whose long-term contracts generate most Government Operations revenue.
• Technical requirements, regulatory costs, classified designs and substantial capital investment limit competition in this business, while Government Operations generated $601.3 million of revenue in the quarter to June 2026.
• Commercial Operations is the only commercial heavy nuclear component manufacturer in North America, supplying steam generators, reactor components, fuel handling systems and services for utility maintenance, refurbishment and plant life extensions.
• Kinectrics, acquired in May 2025, expanded lifecycle services for nuclear power and electricity networks and contributed to Commercial Operations revenue growth of 72% in the quarter to June 2026.
• The announced medical business sale redirects focus and resources toward nuclear national defense and commercial power, while the Precision Components Group acquisition closed on July 1, 2026, establishing a U.S. footprint for commercial nuclear component manufacturing.

What the price assumes

At $141.87 per share, the reverse DCF implies free cash flow after stock pay grows 19.0% a year for ten years, using a 10.3% discount rate.

BWXT delivered 10.6% annual growth on that measure over the last 10 years, while the TenQ check sets a 7.3% bar by slowing the historical record halfway toward 4%.

The implied growth therefore exceeds both the historical pace and the check's bar, alongside a free cash flow yield of 2.4% and a price to earnings ratio of 36.7x.

Value BWXT on your own assumptions

What could change the story

• Government funding remains central to contract execution, with $2,151.3 million of unfunded U.S. Government backlog included in total backlog of $7,260.7 million at December 31, 2025.
• A relatively small number of major projects can account for significant operations, and fixed-price commercial contracts expose BWXT to cost overruns while utility outage and refurbishment schedules can shift revenue timing.
• Government Operations operating income fell to $105.7 million in the quarter to June 2026 from $109.4 million a year earlier because the comparison period had larger positive contract adjustments and the business mix became less favorable.
• Total debt of $2.0 billion against $608 million in cash and short-term investments leaves financing obligations alongside acquisition and manufacturing investment needs, and BWXT fails TenQ's debt burden check.
• The operating margin of 12.1% falls below the TenQ sector benchmark of 14.5%, while capital expenditures increased to $41.4 million in the quarter to June 2026 from $32.7 million a year earlier, reducing cash left after investment.

What to watch next

• BWXT's raised 2026 guidance calls for approximately $3,800 million in revenue, adjusted EBITDA of $662 million to $672 million and non-GAAP EPS of $4.70 to $4.80, including a contribution from Precision Components Group.
• The free cash flow guidance of $345 million to $360 million for 2026 provides a concrete measure of whether earnings growth and working capital management can cover increased manufacturing investment.
• The next releases will show whether Government Operations profit improves as contract adjustments and business mix change, and how much commercial growth comes from existing operations versus acquisitions.
• Further details on the medical business sale and Precision Components Group integration will clarify how the narrower nuclear focus changes revenue, spending and cash generation.

Sources

• BWX Technologies's earnings release, filed with the SEC
• Its latest 10-Q or 10-K, for the risk factors
• The BWXT stock report, for every figure and check