AZEK CO INC/THE (AZEK) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AZEK - US05478C1053 - Common Stock
54.35 USD
-0.51 (-0.93%)
54.35 USD
0 (0%)
Taking everything into account, AZEK scores 5 out of 10 in our fundamental rating. AZEK was compared to 42 industry peers in the Building Products industry. AZEK has an excellent financial health rating, but there are some minor concerns on its profitability. AZEK is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year AZEK was profitable.
- In the past year AZEK had a positive cash flow from operations.
- Of the past 5 years AZEK 4 years were profitable.
- Each year in the past 5 years AZEK had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of AZEK (6.56%) is comparable to the rest of the industry.
- AZEK has a Return On Equity (10.38%) which is in line with its industry peers.
- AZEK has a Return On Invested Capital of 8.35%. This is comparable to the rest of the industry: AZEK outperforms 47.62% of its industry peers.
- AZEK had an Average Return On Invested Capital over the past 3 years of 5.62%. This is significantly below the industry average of 12.68%.
- The 3 year average ROIC (5.62%) for AZEK is below the current ROIC(8.35%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.56% | ||
| ROE | 10.38% | ||
| ROIC | 8.35% |
ROA(3y)4.37%
ROA(5y)2.21%
ROE(3y)7.09%
ROE(5y)3.69%
ROIC(3y)5.62%
ROIC(5y)N/A
1.3 Margins
- AZEK has a Profit Margin (9.92%) which is comparable to the rest of the industry.
- In the last couple of years the Profit Margin of AZEK has grown nicely.
- The Operating Margin of AZEK (15.45%) is comparable to the rest of the industry.
- AZEK's Operating Margin has improved in the last couple of years.
- AZEK's Gross Margin of 37.19% is fine compared to the rest of the industry. AZEK outperforms 61.90% of its industry peers.
- AZEK's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.45% | ||
| PM (TTM) | 9.92% | ||
| GM | 37.19% |
OM growth 3Y6.95%
OM growth 5Y14.24%
PM growth 3Y10.41%
PM growth 5YN/A
GM growth 3Y4.35%
GM growth 5Y3.35%
2. Health
2.1 Basic Checks
- AZEK has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- AZEK has less shares outstanding than it did 1 year ago.
- AZEK has more shares outstanding than it did 5 years ago.
- The debt/assets ratio for AZEK has been reduced compared to a year ago.
2.2 Solvency
- An Altman-Z score of 6.82 indicates that AZEK is not in any danger for bankruptcy at the moment.
- AZEK has a better Altman-Z score (6.82) than 80.95% of its industry peers.
- The Debt to FCF ratio of AZEK is 2.56, which is a good value as it means it would take AZEK, 2.56 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 2.56, AZEK is in the better half of the industry, outperforming 73.81% of the companies in the same industry.
- AZEK has a Debt/Equity ratio of 0.36. This is a healthy value indicating a solid balance between debt and equity.
- AZEK's Debt to Equity ratio of 0.36 is fine compared to the rest of the industry. AZEK outperforms 61.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | 2.56 | ||
| Altman-Z | 6.82 |
ROIC/WACC0.82
WACC10.14%
2.3 Liquidity
- AZEK has a Current Ratio of 2.45. This indicates that AZEK is financially healthy and has no problem in meeting its short term obligations.
- AZEK has a better Current ratio (2.45) than 64.29% of its industry peers.
- AZEK has a Quick Ratio of 1.47. This is a normal value and indicates that AZEK is financially healthy and should not expect problems in meeting its short term obligations.
- AZEK's Quick ratio of 1.47 is fine compared to the rest of the industry. AZEK outperforms 61.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.45 | ||
| Quick Ratio | 1.47 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 15.65% over the past year.
- AZEK shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.98% yearly.
- The Revenue has been growing slightly by 5.92% in the past year.
- Measured over the past years, AZEK shows a quite strong growth in Revenue. The Revenue has been growing by 12.66% on average per year.
EPS 1Y (TTM)15.65%
EPS 3Y6.98%
EPS 5YN/A
EPS Q2Q%15.38%
Revenue 1Y (TTM)5.92%
Revenue growth 3Y6.93%
Revenue growth 5Y12.66%
Sales Q2Q%8.08%
3.2 Future
- AZEK is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 18.01% yearly.
- AZEK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.89% yearly.
EPS Next Y19.01%
EPS Next 2Y17.77%
EPS Next 3Y18.01%
EPS Next 5YN/A
Revenue Next Year7.39%
Revenue Next 2Y7.55%
Revenue Next 3Y7.89%
Revenue Next 5YN/A
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 40.86, the valuation of AZEK can be described as expensive.
- Based on the Price/Earnings ratio, AZEK is valued expensively inside the industry as 80.95% of the companies are valued cheaper.
- When comparing the Price/Earnings ratio of AZEK to the average of the S&P500 Index (27.32), we can say AZEK is valued slightly more expensively.
- A Price/Forward Earnings ratio of 32.66 indicates a quite expensive valuation of AZEK.
- AZEK's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. AZEK is more expensive than 76.19% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.32, AZEK is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.86 | ||
| Fwd PE | 32.66 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, AZEK is valued a bit more expensive than 76.19% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of AZEK is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.6 | ||
| EV/EBITDA | 22.4 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AZEK does not grow enough to justify the current Price/Earnings ratio.
- The decent profitability rating of AZEK may justify a higher PE ratio.
- A more expensive valuation may be justified as AZEK's earnings are expected to grow with 18.01% in the coming years.
PEG (NY)2.15
PEG (5Y)N/A
EPS Next 2Y17.77%
EPS Next 3Y18.01%
5. Dividend
5.1 Amount
- AZEK does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
AZEK CO INC/THE / AZEK FAQ
What is the fundamental rating for AZEK stock?
ChartMill assigns a fundamental rating of 5 / 10 to AZEK.
What is the valuation status of AZEK CO INC/THE (AZEK) stock?
ChartMill assigns a valuation rating of 1 / 10 to AZEK CO INC/THE (AZEK). This can be considered as Overvalued.
How profitable is AZEK CO INC/THE (AZEK) stock?
AZEK CO INC/THE (AZEK) has a profitability rating of 6 / 10.
How financially healthy is AZEK CO INC/THE?
The financial health rating of AZEK CO INC/THE (AZEK) is 7 / 10.
What is the earnings growth outlook for AZEK CO INC/THE?
The Earnings per Share (EPS) of AZEK CO INC/THE (AZEK) is expected to grow by 19.01% in the next year.