Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at AZEK (NYSE:AZEK) and the best and worst performers in the building materials industry.
Traditionally, building materials companies have built competitive advantages with economies of scale, brand recognition, and strong relationships with builders and contractors. More recently, advances to address labor availability and job site productivity have spurred innovation. Additionally, companies in the space that can produce more energy-efficient materials have opportunities to take share. However, these companies are at the whim of 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 building materials companies.
The 6 building materials stocks we track reported an ok Q1; on average, revenues were in line with analyst consensus estimates. while next quarter's revenue guidance was in line with 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 building materials stocks have held roughly steady amidst all this, with share prices up 1% on average since the previous earnings results.
AZEK (NYSE:AZEK) With a significant portion of its products made from recycled materials, AZEK (NYSE:AZEK) designs and manufactures goods for outdoor living spaces.
AZEK reported revenues of $418.4 million, up 10.8% year on year, topping analysts' expectations by 1.5%. It was an ok quarter for the company, with a decent beat of analysts' earnings estimates.
“The continued underlying strength of the business is evidenced by our performance fiscal year-to-date that once again exceeded our plan, as we benefitted from strong execution of our initiatives and growth of our outdoor living products”Post (NYSE:POST) this CEO COMMENTS
AZEK achieved the fastest revenue growth but had the weakest full-year guidance update of the whole group. The stock is down 7.3% since the results and currently trades at $41.63.
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Best Q1: Armstrong World (NYSE:AWI) Started as a two-man shop dating back to the 1860s, Armstrong (NYSE:AWI) provides ceiling and wall products to commercial and residential spaces.
Armstrong World reported revenues of $326.3 million, up 5.2% year on year, outperforming analysts' expectations by 2.1%. It was an impressive quarter for the company, with full-year revenue guidance exceeding analysts' expectations.
Armstrong World pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is down 5.6% since the results and currently trades at $112.23.
Weakest Q1: UFP (NASDAQ:UFPI) Beginning as a lumber supplier in the 1950s, UFP (NASDAQ:UFPI) makes a wide range of building materials for the construction, retail, and industrial sectors
UFP reported revenues of $1.64 billion, down 10.1% year on year, falling short of analysts' expectations by 4.7%. It was a weak quarter for the company, with a miss of analysts' volume estimates.
UFP had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is down 5.1% since the results and currently trades at $109.81.
Tecnoglass (NYSE:TGLS) The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE:TGLS) is a manufacturer of architectural glass, windows, and aluminum products.
Tecnoglass reported revenues of $192.6 million, down 4.9% year on year, in line with analysts' expectations. It was a weak quarter for the company, with a miss of analysts' earnings estimates.
The stock is down 3.4% since the results and currently trades at $50.17.
Resideo (NYSE:REZI) Holding around 3000 active and pending patents, Resideo (NYSE:REZI) provides home comfort, security, energy, and water management solutions.
Resideo reported revenues of $1.49 billion, down 4.1% year on year, in line with analysts' expectations. It was a solid quarter for the company, with an impressive beat of analysts' earnings estimates.
The stock is down 2% since the results and currently trades at $19.34.
This content was originally published on Stock Story
