NEW YORK, April 27, 2026 (GLOBE NEWSWIRE) -- Levi & Korsinsky, LLP notifies investors in Power Solutions International, Inc. (NASDAQ: PSIX) that a class action lawsuit has been filed on behalf of shareholders who purchased securities between May 8, 2025 and March 2, 2026. Find out if you qualify to recover losses. You may also contact Joseph E. Levi, Esq. at jlevi@levikorsinsky.com or (212) 363-7500.
Power Solutions shares fell $24.84 per share, or nearly 29%, after the Company disclosed that gross margins had deteriorated by 8% year-over-year due to operating inefficiencies tied to its data center production ramp-up. The lead plaintiff deadline is May 19, 2026.
The Alleged Data Center Margin Methodology
The AI-driven data center infrastructure boom attracted billions in capital spending throughout 2025. Power Solutions claimed it was strategically pivoting into this sector, telling investors its shift toward data center power systems represented a move into "higher growth, higher-margin markets." The lawsuit contends that this characterization was materially misleading because the Company's accelerated production ramp-up was generating significant and worsening cost overruns that management downplayed as merely "temporary inefficiencies."
How the Alleged Ramp-Up Costs Degraded Reported Financials
The complaint alleges that throughout the Class Period, the Company's gross margin eroded quarter after quarter as production scaled:
- Q1 2025 gross margin stood at 29.7%, which the Company attributed to "improved mix" and "pricing actions"
- By Q2 2025, gross margin had already declined to 28.2%, a 3.6% year-over-year decrease
- Q3 2025 saw gross margin fall to 23.9%, a 5.0% year-over-year decline
- Q4 2025 gross margin reached 21.9%, an 8.0% year-over-year collapse
- Sales growth guidance was cut from the 74% and 65% quarterly pace to just 45% for the full year
- The Company's 2026 outlook promised only "moderate margin improvement"
The lawsuit asserts that this steady deterioration was not a temporary condition but reflected structural manufacturing cost problems and supply chain failures that management knew or should have known were undermining the data center pivot.
"This case presents important questions about margin disclosure obligations in the power systems sector. When a company tells investors it is moving into higher-margin markets, shareholders are entitled to accurate information about the costs associated with that transition." -- Joseph E. Levi, Esq.
The Data Center Demand Factor
According to the lawsuit, the Company repeatedly told investors that pivoting to data center markets was "driving current net sales growth and profitability" and touted "margin expansion opportunities" from increasing the mix of power systems business. The action contends these statements lacked a reasonable basis because the operational realities of the accelerated ramp-up were already eroding the very margins that management held out as a key investment thesis.
Submit your information to join this case or call Joseph E. Levi, Esq. at (212) 363-7500.
ABOUT LEVI & KORSINSKY, LLP -- Over the past 20 years, Levi & Korsinsky has secured hundreds of millions of dollars for aggrieved shareholders. The firm has extensive expertise in complex securities litigation and a team of over 70 employees. For seven consecutive years, Levi & Korsinsky has ranked in ISS Securities Class Action Services' Top 50 Report. Applications to serve as lead plaintiff must be filed by May 19, 2026.
CONTACT:
Levi & Korsinsky, LLP
Joseph E. Levi, Esq.
Ed Korsinsky, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
jlevi@levikorsinsky.com
Tel: (212) 363-7500
Fax: (212) 363-7171
