Since August 2020, the S&P 500 has delivered a total return of 90.9%. But one standout stock has more than doubled the market - over the past five years, Woodward has surged 189% to $245 per share. Its momentum hasn’t stopped as it’s also gained 28.6% in the last six months thanks to its solid quarterly results, beating the S&P by 23.2%.
Is now the time to buy Woodward, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Is Woodward Not Exciting?
Despite the momentum, we're cautious about Woodward. Here are three reasons why there are better opportunities than WWD and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Regrettably, Woodward’s sales grew at a tepid 4.9% compounded annual growth rate over the last five years. This fell short of our benchmark for the industrials sector. 
2. EPS Barely Growing
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Woodward’s EPS grew at an unimpressive 7.1% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 4.9% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.
3. Free Cash Flow Margin Dropping
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
As you can see below, Woodward’s margin dropped by 11.2 percentage points over the last five years. If its declines continue, it could signal increasing investment needs and capital intensity. Woodward’s free cash flow margin for the trailing 12 months was 8.1%.
Final Judgment
Woodward’s business quality ultimately falls short of our standards. With its shares beating the market recently, the stock trades at 33.8× forward P/E (or $245 per share). At this valuation, there’s a lot of good news priced in - we think other companies feature superior fundamentals at the moment. Let us point you toward one of our all-time favorite software stocks.
Stocks We Would Buy Instead of Woodward
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
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