AZEK CO INC/THE (AZEK) Stock Fundamental Analysis
NYSE:AZEK - New York Stock Exchange, Inc. - US05478C1053 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to AZEK. AZEK was compared to 40 industry peers in the Building Products industry. Both the profitability and the financial health of AZEK get a neutral evaluation. Nothing too spectacular is happening here. AZEK is valied quite expensively at the moment, while 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.
AZEK had positive earnings in 4 of the past 5 years.
Each year in the past 5 years AZEK had a positive operating cash flow.
1.2 Ratios
AZEK has a Return On Assets (7.08%) which is in line with its industry peers.
With a Return On Equity value of 11.30%, AZEK perfoms like the industry average, outperforming 47.50% of the companies in the same industry.
With a Return On Invested Capital value of 8.08%, AZEK is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
The Average Return On Invested Capital over the past 3 years for AZEK is significantly below the industry average of 13.19%.
The last Return On Invested Capital (8.08%) for AZEK is above the 3 year average (5.62%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.08% | ||
| ROE | 11.3% | ||
| ROIC | 8.08% |
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 better Profit Margin (10.64%) than 65.00% of its industry peers.
AZEK's Profit Margin has improved in the last couple of years.
AZEK's Operating Margin of 14.85% is in line compared to the rest of the industry. AZEK outperforms 50.00% of its industry peers.
In the last couple of years the Operating Margin of AZEK has grown nicely.
AZEK has a better Gross Margin (37.59%) than 62.50% of its industry peers.
In the last couple of years the Gross Margin of AZEK has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.85% | ||
| PM (TTM) | 10.64% | ||
| GM | 37.59% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AZEK is destroying value.
The number of shares outstanding for AZEK has been reduced compared to 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
AZEK has an Altman-Z score of 6.54. This indicates that AZEK is financially healthy and has little risk of bankruptcy at the moment.
AZEK has a better Altman-Z score (6.54) than 77.50% of its industry peers.
AZEK has a debt to FCF ratio of 3.54. This is a good value and a sign of high solvency as AZEK would need 3.54 years to pay back of all of its debts.
AZEK's Debt to FCF ratio of 3.54 is in line compared to the rest of the industry. AZEK outperforms 55.00% of its industry peers.
A Debt/Equity ratio of 0.38 indicates that AZEK is not too dependend on debt financing.
AZEK has a Debt to Equity ratio (0.38) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 3.54 | ||
| Altman-Z | 6.54 |
ROIC/WACC0.73
WACC11.08%
2.3 Liquidity
A Current Ratio of 2.17 indicates that AZEK has no problem at all paying its short term obligations.
The Current ratio of AZEK (2.17) is comparable to the rest of the industry.
A Quick Ratio of 1.14 indicates that AZEK should not have too much problems paying its short term obligations.
AZEK has a Quick ratio of 1.14. This is in the lower half of the industry: AZEK underperforms 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.17 | ||
| Quick Ratio | 1.14 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 60.00% over the past year.
Measured over the past 5 years, AZEK shows a small growth in Earnings Per Share. The EPS has been growing by 6.98% on average per year.
AZEK shows a small growth in Revenue. In the last year, the Revenue has grown by 5.18%.
AZEK shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.66% yearly.
EPS 1Y (TTM)60%
EPS 3Y6.98%
EPS 5YN/A
EPS Q2Q%-19.44%
Revenue 1Y (TTM)5.18%
Revenue growth 3Y6.93%
Revenue growth 5Y12.66%
Sales Q2Q%-10.44%
3.2 Future
Based on estimates for the next years, AZEK will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.89% on average per year.
AZEK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.72% yearly.
EPS Next Y18.76%
EPS Next 2Y18.45%
EPS Next 3Y17.89%
EPS Next 5YN/A
Revenue Next Year6.98%
Revenue Next 2Y7.77%
Revenue Next 3Y7.72%
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
With a Price/Earnings ratio of 43.14, AZEK can be considered very expensive at the moment.
AZEK's Price/Earnings ratio is a bit more expensive when compared to the industry. AZEK is more expensive than 77.50% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.39. AZEK is valued rather expensively when compared to this.
A Price/Forward Earnings ratio of 36.33 indicates a quite expensive valuation of AZEK.
Based on the Price/Forward Earnings ratio, AZEK is valued a bit more expensive than 75.00% of the companies in the same industry.
AZEK is valuated rather expensively when we compare the Price/Forward Earnings ratio to 24.37, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 43.14 | ||
| Fwd PE | 36.33 |
4.2 Price Multiples
AZEK's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. AZEK is more expensive than 72.50% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, AZEK is valued a bit more expensive than the industry average as 72.50% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 50.25 | ||
| EV/EBITDA | 22.11 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of AZEK may justify a higher PE ratio.
AZEK's earnings are expected to grow with 17.89% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.3
PEG (5Y)N/A
EPS Next 2Y18.45%
EPS Next 3Y17.89%
5. Dividend
5.1 Amount
No dividends for AZEK!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
AZEK CO INC/THE
NYSE:AZEK (1/27/2025, 8:04:00 PM)
After market: 51.77 0 (0%)51.77
+1.23 (+2.43%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners105.48%
Inst Owner Change-0.36%
Ins Owners1.93%
Ins Owner Change0.04%
Market Cap7.40B
Analysts81.6
Price Target55.55 (7.3%)
Short Float %3.57%
Short Ratio3.62
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.18%
Min EPS beat(2)5.87%
Max EPS beat(2)14.49%
EPS beat(4)3
Avg EPS beat(4)27.34%
Min EPS beat(4)-3.47%
Max EPS beat(4)92.46%
EPS beat(8)7
Avg EPS beat(8)24.94%
EPS beat(12)10
Avg EPS beat(12)18.4%
EPS beat(16)14
Avg EPS beat(16)17.66%
Revenue beat(2)2
Avg Revenue beat(2)4.07%
Min Revenue beat(2)0.71%
Max Revenue beat(2)7.44%
Revenue beat(4)3
Avg Revenue beat(4)1.95%
Min Revenue beat(4)-1.5%
Max Revenue beat(4)7.44%
Revenue beat(8)7
Avg Revenue beat(8)2.6%
Revenue beat(12)10
Avg Revenue beat(12)2.49%
Revenue beat(16)14
Avg Revenue beat(16)2.89%
PT rev (1m)3.16%
PT rev (3m)8.52%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-7.11%
EPS NY rev (1m)0%
EPS NY rev (3m)1.43%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.73%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)0.45%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 43.14 | ||
| Fwd PE | 36.33 | ||
| P/S | 5.14 | ||
| P/FCF | 50.25 | ||
| P/OCF | 32.98 | ||
| P/B | 5.46 | ||
| P/tB | 31.57 | ||
| EV/EBITDA | 22.11 |
EPS(TTM)1.2
EY2.32%
EPS(NY)1.43
Fwd EY2.75%
FCF(TTM)1.03
FCFY1.99%
OCF(TTM)1.57
OCFY3.03%
SpS10.08
BVpS9.49
TBVpS1.64
PEG (NY)2.3
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.08% | ||
| ROE | 11.3% | ||
| ROCE | 10.97% | ||
| ROIC | 8.08% | ||
| ROICexc | 8.82% | ||
| ROICexgc | 23.71% | ||
| OM | 14.85% | ||
| PM (TTM) | 10.64% | ||
| GM | 37.59% | ||
| FCFM | 10.22% |
ROA(3y)4.37%
ROA(5y)2.21%
ROE(3y)7.09%
ROE(5y)3.69%
ROIC(3y)5.62%
ROIC(5y)N/A
ROICexc(3y)6.17%
ROICexc(5y)N/A
ROICexgc(3y)16.3%
ROICexgc(5y)N/A
ROCE(3y)7.64%
ROCE(5y)N/A
ROICexcg growth 3Y8.85%
ROICexcg growth 5Y6.33%
ROICexc growth 3Y13.94%
ROICexc growth 5Y24.98%
OM growth 3Y6.95%
OM growth 5Y14.24%
PM growth 3Y10.41%
PM growth 5YN/A
GM growth 3Y4.35%
GM growth 5Y3.35%
F-Score8
Asset Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 3.54 | ||
| Debt/EBITDA | 1.5 | ||
| Cap/Depr | 59.78% | ||
| Cap/Sales | 5.35% | ||
| Interest Coverage | 4.35 | ||
| Cash Conversion | 65.43% | ||
| Profit Quality | 96.06% | ||
| Current Ratio | 2.17 | ||
| Quick Ratio | 1.14 | ||
| Altman-Z | 6.54 |
F-Score8
WACC11.08%
ROIC/WACC0.73
Cap/Depr(3y)90.69%
Cap/Depr(5y)108.06%
Cap/Sales(3y)8.18%
Cap/Sales(5y)10%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)60%
EPS 3Y6.98%
EPS 5YN/A
EPS Q2Q%-19.44%
EPS Next Y18.76%
EPS Next 2Y18.45%
EPS Next 3Y17.89%
EPS Next 5YN/A
Revenue 1Y (TTM)5.18%
Revenue growth 3Y6.93%
Revenue growth 5Y12.66%
Sales Q2Q%-10.44%
Revenue Next Year6.98%
Revenue Next 2Y7.77%
Revenue Next 3Y7.72%
Revenue Next 5YN/A
EBIT growth 1Y72.54%
EBIT growth 3Y14.36%
EBIT growth 5Y28.71%
EBIT Next Year59.52%
EBIT Next 3Y24.83%
EBIT Next 5YN/A
FCF growth 1Y-46.23%
FCF growth 3Y65.33%
FCF growth 5Y35.8%
OCF growth 1Y-38.07%
OCF growth 3Y2.62%
OCF growth 5Y18.79%