Perma-Pipe International Holdings, Inc. (PPIH Quick QuotePPIH - Free Report) shares have gained 42.7% in the past six months compared with the industry’s 17.8% growth. The company has outperformed other industry players, including Valmont Industries, Inc. (VMI Quick QuoteVMI - Free Report) and Tenaris S.A. (TS Quick QuoteTS - Free Report) . Shares of VMI and TS have posted increases of 33.7% and 13.1%, respectively, in the same time frame. Perma-Pipe’s growth is fueled by Saudi Aramco approval, rising project awards, strong sales and expanded local capacity supporting infrastructure and energy markets.

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A Key Look Into PPIH’s Business Operations

Perma-Pipe is a Delaware-based company that operates in a single segment focused on engineering, manufacturing, and selling specialty piping and leak detection systems. These systems are used in applications such as district energy, chemical transport, oil and gas pipelines and corrosion prevention. PPIH’s products are often custom-fabricated and installed underground, with trenching handled by third-party contractors. It operates globally, with facilities in North America, the Middle East, India and Egypt, and sells through a mix of direct sales and agents. The company emphasizes quality, engineering expertise, service, and a comprehensive product line as key competitive advantages. It supports energy-efficient district heating and cooling systems that reduce environmental impact and improve operational efficiency.

Perma-Pipe’s Key Tailwinds

Perma-Pipe’s growth is being significantly bolstered by its strategic expansion in Saudi Arabia, marked by its recent technical and commercial approval from Saudi Aramco. This milestone enables the company to directly access the region’s vast oil and gas infrastructure market, which was previously out of reach. This approval enhances Perma-Pipe’s ability to participate in Saudi Arabia’s sizable pipe coating sector, moving beyond its prior concentration in district heating and cooling. The development reflects both regulatory confidence and alignment with national goals under Vision 2030, securing the company’s presence in a high-growth, high-demand market.

Complementing its strategic expansion is a strong uptick in new project awards. In the third quarter of 2025 alone, Perma-Pipe announced $52 million in awards, including major U.S. data center infrastructure projects and Saudi Aramco-related contracts. This surge in orders, following a $30 million award earlier that quarter, reflects heightened demand for its engineered piping systems and containment solutions. The rapidly growing backlog provides operational stability and future revenue visibility, supporting better resource planning and reinforcing the company’s position in mission-critical infrastructure development.

Perma-Pipe’s financial performance provides additional evidence of positive momentum. In the first nine months of fiscal 2025, the company achieved a 37% increase in net sales year over year, totaling $155.8 million. Gross profit rose to $52.2 million, and net income attributable to common stock climbed to $12.1 million from $7.2 million the prior year. These improvements were fueled by increased sales volumes in both North America and the Middle East, along with better project execution. 

Investments in local capacity have played a crucial role in reinforcing Perma-Pipe’s competitive edge. The expansion of its Dammam facility in Saudi Arabia has enhanced its regional production capabilities, enabling quicker deployment of modular systems and integrated solutions. These developments are aligned with customer expectations for localized manufacturing and faster project execution, particularly in energy and data center applications.

Challenges Persist for PPIH’s Business

Perma-Pipe faced several headwinds during the nine months ended Oct. 31, 2025. One significant challenge was the rise in general and administrative expenses, which increased by $6.7 million compared to the prior year. This rise included a one-time $2 million charge tied to executive compensation from a leadership departure, along with higher payroll and professional fees. Additionally, the company continued to manage high debt levels ($29.7 million), with rising lease obligations and finance commitments across multiple global operations, especially in the Middle East. There were also material weaknesses in internal controls over financial reporting, particularly in the MENA region, which required remediation efforts and could impact financial accuracy and oversight.

Perma-Pipe’s Valuation

The company is cheaply priced compared with the industry average. Currently, PPIH is trading at 1.23X trailing 12-month EV/sales value, below the industry’s average of 2.39X. The metric remains lower than the company’s peers, Valmont Industries (2.25X) and Tenaris (1.8X).

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Conclusion

Perma-Pipe’s strategic expansion into Saudi Arabia and its growing project backlog position it as a compelling long-term investment opportunity in critical infrastructure markets. However, elevated operating costs and high debt levels may pose short-term risks that investors should closely monitor.

Strong fundamentals coupled with PPIH’s undervaluation present a lucrative opportunity for investors to add the stock to their portfolio.