The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Quanex (NYSE:NX) and the rest of the home construction materials stocks fared in Q1.
Traditionally, home construction materials companies have built economic moats with expertise in specialized areas, brand recognition, and strong relationships with contractors. More recently, advances to address labor availability and job site productivity have spurred innovation that is driving incremental demand. However, these companies are at the whim of residential construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of home construction materials companies.
The 13 home construction materials stocks we track reported an ok Q1; on average, revenues beat analyst consensus estimates by 0.5%. while next quarter's revenue guidance was 2.3% above consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and while some of the home construction materials stocks have fared somewhat better than others, they collectively declined, with share prices falling 0.3% on average since the previous earnings results.
Quanex (NYSE:NX) Starting in the seamless tube industry, Quanex (NYSE:NX) manufactures building products like window, door, kitchen, and bath cabinet components.
Quanex reported revenues of $266.2 million, down 2.7% year on year, in line with analysts' expectations. Overall, it was a very strong quarter for the company with an impressive beat of analysts' earnings estimates.
George Wilson, Chairman, President and Chief Executive Officer, commented, “Our second quarter results came in as expected and we continue to execute. Volumes in North America increased in the second quarter compared to the first quarter of the year, which is encouraging and follows normal seasonality in our business. Volumes in Europe were challenged during the quarter as low consumer confidence continues to impact demand. However, we continue to operate efficiently and were able to realize margin expansion in both of our North American operating segments and on a consolidated basis for the second quarter of 2024. Our continued focus on generating cash and managing working capital enabled us to pay down the remaining $10 million balance on our revolver.”
The stock is flat since reporting and currently trades at $30.66.
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Best Q1: Griffon (NYSE:GFF) Initially in the defense industry, Griffon (NYSE:GFF) is a now diversified company specializing in home improvement, professional equipment, and building products.
Griffon reported revenues of $672.9 million, down 5.4% year on year, outperforming analysts' expectations by 7.6%. It was an incredible quarter for the company with an impressive beat of analysts' earnings estimates.
Griffon pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 8.2% since reporting. It currently trades at $73.34.
Weakest Q1: Simpson (NYSE:SSD) Aiming to build safer and stronger buildings, Simpson (NYSE:SSD) designs and manufactures structural connectors, anchors, and other construction products.
Simpson reported revenues of $530.6 million, flat year on year, falling short of analysts' expectations by 2.6%. It was a weak quarter for the company with a miss of analysts' earnings estimates.
The stock is flat since the results and currently trades at $186.13.
American Woodmark (NASDAQ:AMWD) Starting as a small millwork shop, American Woodmark (NASDAQ:AMWD) is a cabinet manufacturing company that helps customers from inspiration to installation.
American Woodmark reported revenues of $453.3 million, down 5.8% year on year, surpassing analysts' expectations by 2.8%. Zooming out, it was a mixed quarter for the company. American Woodmark blew past analysts' revenue expectations. On the other hand, its EPS missed.
The stock is flat since reporting and currently trades at $93.40.
Hayward (NYSE:HAYW) Credited with introducing the first variable-speed pool pump, Hayward (NYSE:HAYW) makes residential and commercial pool equipment and accessories.
Hayward reported revenues of $212.6 million, up 1.2% year on year, surpassing analysts' expectations by 1.7%. Revenue aside, it was a strong quarter for the company with an impressive beat of analysts' organic revenue estimates.
The stock is up 2.1% since reporting and currently trades at $13.81.
This content was originally published on Stock Story
