PSIX

Rating neutralAI MemoPost-earnings T+3

Power Solutions International

As of 2026-05-14/Post-earnings T+3/Confidence medium

Open ticker Back to Memos

Data freshness

AI Memo

As of 2026-05-14 • Model: RankAlpha Sentiment Codex

Decision Panel

Action, confidence, horizon, and decision blockers at a glance.

Action

neutral

Confidence

medium

Horizon

—

Key catalyst

Q2/Q3 conversion of larger Power Systems orders is the next earnings checkpoint • 2026-08-10

Expected move: +25%

Biggest risk

The post-earnings evidence cut against the prior upside narrative: Q1 sales were down 5%, gross profit fell 27%, net income fell 62%, no formal full-year guidance was given, oil-and-gas softness persists, and CEO turnover immediately followed the print. That leaves the stock dependent on deferred second-half execution rather than visible near-term momentum.

Invalidation

Break below $32 or thesis failure.

What would change my mind?

The primary-source earnings release still points to solid data-center demand, sequential gross-margin improvement versus Q4 2025, and expected stronger second-half sales if larger Power Systems orders convert as planned. If Wisconsin ramp inefficiencies moderate, the market could revisit a cleaner growth-and-margin narrative.

Research note

Recommendation

neutral

Confidence

medium

As of

2026-05-14

Base target

$48

p=45%

Bull target

$60

p=25%

Bear target

$32

p=30%

Key bullets

Fast scan of bull, bear, and watch items

BullKey bullets

CEO resignation adds near-term execution and messaging risk
Weichai collaboration renewal remains an unresolved overhang
The primary-source earnings release still points to solid data-center demand, sequential gross-margin improvement versus Q4 2025, and expected stronger second-half sales if larger Power Systems orders convert as planned.

BearKey bullets

A disclosed federal securities class action adds legal and distraction risk.
CEO resignation and interim leadership create execution and communication risk during a fragile operating period.
Customer concentration remains meaningful, with Customer C at 27% of Q1 2026 net sales and Customer B at 12%.

WatchKey bullets

Q2/Q3 conversion of larger Power Systems orders is the next earnings checkpoint

Summary

High-level snapshot

Recommendation

neutral

Model confidence

medium

Timeframe

Asset

Equity

Trigger

Post-earnings T+3

Base case: $48 (p=45%)

Bull/Bear spread: +57% / -16%

Vs latest close: Bull +57% · Base +25% · Bear -16%

Scenario probabilities

Bull Target: $60 (p=25%)Base Target: $48 (p=45%)Bear Target: $32 (p=30%)

Commentary

This T+3 follow-up stays in monitoring mode. The company-source earnings release provided the key signal: weaker Q1 results, no formal full-year guidance, and a second-half recovery story that still depends on timing and throughput. Subsequent company news then added CEO-transition risk. Third-party market coverage characterized the immediate reaction as sharply negative after the miss, which fits the May 13 anchor price of $45.11, but dependable sell-side revision and target-change detail were not available in the checked sources, so confidence should not be upgraded on missing analyst data.

As of 2026-05-14 • Updated bi-weekly / post-earningsSource: Internal modelMethodology

Analyst Summary

Thesis highlights from the latest analysis

Bull Case

Bear Case

Drivers

Scannable catalysts and supporting factors

CEO resignation adds near-term execution and messaging risk
Weichai collaboration renewal remains an unresolved overhang

Scenarios

Bull Target (Scenario probability)

$60 / p=25% prob

Base Target (Scenario probability)

$48 / p=45% prob

Bear Target (Scenario probability)

$32 / p=30% prob

Price $38 as of 2026-06-10

Nearest Scenario: Bear (∆ 16%)

Targets vs latest close: Bull +57% · Base +25% · Bear -16%

Sentiment & Exposure

News Sentiment (30d)

-0.35

Social Sentiment (7d)

0.00

Events

Other notable items detected

EVENT2026-08-10
Q2/Q3 conversion of larger Power Systems orders is the next earnings checkpoint
The May 11 earnings release said Q1 net sales fell 5% to $128.6 million, gross margin fell to 22.9%, the company is not providing formal full-year guidance, Q2 revenue is expected to be generally consistent with Q1, and stronger second-half sales are expected only as larger Power Systems orders move into production; management also said shipment timing remains subject to customer scheduling, manufacturing throughput and supply-chain factors. That makes the next earnings windows the clearest test of whether data-center demand converts into cleaner revenue and margin recovery. [#EX-99.1-2026-05-11]
Prob 65.00% • Move 16.00% • Priced-in 60.00%

Short-term Catalysts

Next few weeks

CEO resignation adds near-term execution and messaging risk
2026-08-31
PSI disclosed on May 13 that CEO Dino Xykis resigned effective May 12 and CFO Xun Li was appointed Interim CEO while the board continues its permanent CEO search. Coming immediately after a weaker quarter and no formal full-year guidance, the transition raises the bar for consistent execution and investor communication. [#8-K-2026-05-13]
Prob 55% • Move 12% • Priced-in 45%

Long-term Catalysts

Months to a year

Weichai collaboration renewal remains an unresolved overhang
2026-09-30
The 10-Q repeated that the Weichai collaboration agreement expired in March 2026, that PSI received a renewal notice, and that no formal extension had been executed as of the filing date. A completed renewal would remove a relationship overhang, while further delay would keep partner and supply-chain questions in focus. [#10-Q-2026-05-11]
Prob 45% • Move 10% • Priced-in 40%

Risks

A disclosed federal securities class action adds legal and distraction risk.
CEO resignation and interim leadership create execution and communication risk during a fragile operating period.
Customer concentration remains meaningful, with Customer C at 27% of Q1 2026 net sales and Customer B at 12%.
No formal full-year 2026 guidance and only flat sequential Q2 revenue commentary.
Oil and gas softness and uneven order timing are weighing on Power Systems sales.
The Weichai collaboration renewal was still not formally executed as of the Q1 filing.
Wisconsin capacity ramp-up is still carrying elevated production costs and could delay margin recovery.

Peers

Symbol	Summary
ALNT	Allient is not a direct engine-packaging peer, but it is a closer small-cap industrial execution benchmark than the prior broad comps and helps frame whether PSIX can stabilize margins while scaling manufacturing activity.
ETN	Eaton is a much larger and more diversified power-management company, but it is a useful benchmark for how investors are rewarding data-center and power-infrastructure demand where manufacturing execution is credible.
FCEL	FuelCell is only an adjacent power-equipment comp, yet it helps show how public markets treat smaller energy-oriented manufacturers when visibility depends on project timing, customer concentration, and execution credibility.

Sources

Internal and external references used in this analysis

Model source: RankAlpha Sentiment Codex
Human targets: serper
Analysis date: 2026-05-14

AI Stock Memo: PSIX - Power Solutions International - RankAlpha