PPIH - A deep value play in the AI infra - no one is covering this!!

I spend most of my time mapping the AI infrastructure supply chain.  not the NVIDIAs and the Broadcoms, the stuff underneath. The physical layer. Who actually builds this stuff. And I keep coming back to this one company that the market has completely wrong.

Perma-Pipe. Ticker PPIH. They make pre-insulated piping systems. Pipes wrapped in foam insulation. Sounds boring. Boring Oil and gas, steady 3-5% growth and invisible ot everyone, no one cared.

Here's what changed. Data centers need cooling loops. Liquid cooling is going from optional to mandatory as AI racks push past 100kW. Those cooling loops need piping. Insulated piping. That's literally what this company makes. They also own a leak detection business called PermAlert. ensors and software that detect a coolant leak in 30 seconds. Zero false alarms. When you've got racks of H100s sitting in dielectric fluid, you want to know immediately if something's leaking.

Now look at the numbers:

FY2023: $143M revenue. FY2024: $151M. FY2025: $158M. FY2026: $211M.

That last jump is 33% growth. From a company that was doing 3-5% for years. EBITDA margins went from 10-11% to 16.4%. Gross margins stepped up from 27% to 33%, and that happened before the revenue surge. That's pricing power, not just volume.

But here's what actually got my attention , the supply chain around them.

I track the companies that sit above and below PPIH in the chain. Comfort Systems (FIX) is the biggest MEP contractor for data centers in the US. They install PPIH's piping. FIX just reported a $12.5B backlog and their CEO said they're turning away projects. Not chasing work., turning it away. EMCOR (EME), same story 15.6B in remaining work, all-time record, 1.5x book-to-bill. EME specifically said AI data centers need 1.5-2x the mechanical scope of regular ones because of liquid cooling. More cooling, more pipes.

On the equipment side Carrier's data center cooling orders are up 500% year over year. Vertiv has a $15B backlog and 8 straight beat-and-raise quarters. Every chiller Carrier sells, every cooling unit Vertiv ships , they all need piping underneath to connect to the loop. That's PPIH's product.

So everyone around this company in the chain is telling you demand is at record levels. The contractors can't build fast enough. The equipment is selling faster than ever. And the one company making the pipes that connects all of it trades at 8x EBITDA.

8x. The peer group trades at 19-20x. Companies this size growing 15-30% trade at 22-28x according to every comp table I've built. PPIH is growing 33% and the market is pricing it like nothing changed.

Why? Because one analyst covers this stock. One. The estimate looks stale , they have next year at $227M but the current run rate is already $220M. Market cap is $254M so institutions can't really build positions. They don't do earnings calls. And half the revenue is still Middle East oil & gas, so the screen says "small pipe company, energy services" and everyone moves on. They don't see the transformation happening inside.

The board just finished a strategic alternatives review , looked at selling, decided to stay independent. Said they think the stock is undervalued. New CEO is an owner-operator who built their Saudi business. They just opened a new facility in the Northeast purpose-built for data center customers.

The risks are real. Half the revenue is MENA oil & gas , if Saudi spending pulls back, that hurts. Quarterly margins are all over the place (8.6% one quarter, 20.2% the next) because project revenue is lumpy. No earnings calls means you're reading 10-Ks in the dark. And if Carrier or Vertiv decide to vertically integrate into piping, the competitive picture changes.

Q1 earnings should be coming soon , quarter ended April 30. First look at whether the FY2026 momentum carried over. The new facility should start showing up. Worth watching.

I'm not telling anyone to buy anything. I'm just saying , when every company above and below you in the supply chain is reporting record demand, and the market hasn't repriced you from your boring-pipe-company multiple, something's off.