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 5 out of 10 to AZEK. AZEK was compared to 42 industry peers in the Building Products industry. AZEK is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. While showing a medium growth rate, AZEK is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year AZEK was profitable.
AZEK had a positive operating cash flow in the past year.
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 (6.56%) which is comparable to the rest of the industry.
AZEK has a Return On Equity (10.38%) which is comparable to the rest of the industry.
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 12.62%.
The last Return On Invested Capital (8.35%) for AZEK is above the 3 year average (5.62%), which is a sign of increasing profitability.
| 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
With a Profit Margin value of 9.92%, AZEK perfoms like the industry average, outperforming 57.14% of the companies in the same industry.
AZEK's Profit Margin has improved in the last couple of years.
AZEK's Operating Margin of 15.45% is in line compared to the rest of the industry. AZEK outperforms 57.14% of its industry peers.
AZEK's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 37.19%, AZEK is in the better half of the industry, outperforming 61.90% of the companies in the same industry.
In the last couple of years the Gross Margin of AZEK has grown nicely.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AZEK is destroying value.
AZEK has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, AZEK has more shares outstanding
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.
AZEK's Debt to FCF ratio of 2.56 is fine compared to the rest of the industry. AZEK outperforms 73.81% of its industry peers.
A Debt/Equity ratio of 0.36 indicates that AZEK is not too dependend on debt financing.
The Debt to Equity ratio of AZEK (0.36) is better than 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's Current ratio of 2.45 is fine compared to the rest of the industry. AZEK outperforms 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
AZEK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.65%, which is quite good.
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.
The Revenue has been growing slightly by 5.92% in the past year.
The Revenue has been growing by 12.66% on average over the past years. This is quite good.
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
Based on estimates for the next years, AZEK will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.01% on average per year.
Based on estimates for the next years, AZEK will show a small growth in Revenue. The Revenue will grow by 7.89% on average per year.
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
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 40.86 indicates a quite expensive valuation of AZEK.
Compared to the rest of the industry, the Price/Earnings ratio of AZEK indicates a rather expensive valuation: AZEK more expensive than 80.95% of the companies listed in the same industry.
AZEK is valuated rather expensively when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 32.66, the valuation of AZEK can be described as expensive.
76.19% of the companies in the same industry are cheaper than AZEK, based on the Price/Forward Earnings ratio.
AZEK's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.76.
| 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 the industry average as 76.19% of the companies are valued more cheaply.
The rest of the industry has a similar Price/Free Cash Flow ratio as AZEK.
| 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 an expensive valuation of the company.
AZEK has a very decent profitability rating, which 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
No dividends for AZEK!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
54.35
-0.51 (-0.93%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners99.39%
Inst Owner Change0%
Ins Owners1.64%
Ins Owner Change-4.99%
Market Cap7.82B
Analysts71.43
Price Target54.47 (0.22%)
Short Float %5.05%
Short Ratio1.95
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)13.96%
Min EPS beat(2)1.33%
Max EPS beat(2)26.6%
EPS beat(4)4
Avg EPS beat(4)12.07%
Min EPS beat(4)1.33%
Max EPS beat(4)26.6%
EPS beat(8)7
Avg EPS beat(8)21.97%
EPS beat(12)10
Avg EPS beat(12)19.35%
EPS beat(16)14
Avg EPS beat(16)17.04%
Revenue beat(2)1
Avg Revenue beat(2)2.68%
Min Revenue beat(2)-0.23%
Max Revenue beat(2)5.59%
Revenue beat(4)3
Avg Revenue beat(4)3.37%
Min Revenue beat(4)-0.23%
Max Revenue beat(4)7.44%
Revenue beat(8)6
Avg Revenue beat(8)2.31%
Revenue beat(12)10
Avg Revenue beat(12)2.55%
Revenue beat(16)13
Avg Revenue beat(16)3.02%
PT rev (1m)0%
PT rev (3m)-3.71%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-6.06%
EPS NY rev (1m)0.34%
EPS NY rev (3m)-2.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.51%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.76%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.86 | ||
| Fwd PE | 32.66 | ||
| P/S | 5.14 | ||
| P/FCF | 37.6 | ||
| P/OCF | 24.73 | ||
| P/B | 5.38 | ||
| P/tB | 22.88 | ||
| EV/EBITDA | 22.4 |
EPS(TTM)1.33
EY2.45%
EPS(NY)1.66
Fwd EY3.06%
FCF(TTM)1.45
FCFY2.66%
OCF(TTM)2.2
OCFY4.04%
SpS10.57
BVpS10.11
TBVpS2.38
PEG (NY)2.15
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.56% | ||
| ROE | 10.38% | ||
| ROCE | 11.34% | ||
| ROIC | 8.35% | ||
| ROICexc | 8.98% | ||
| ROICexgc | 21.29% | ||
| OM | 15.45% | ||
| PM (TTM) | 9.92% | ||
| GM | 37.19% | ||
| FCFM | 13.68% |
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 | 0.36 | ||
| Debt/FCF | 2.56 | ||
| Debt/EBITDA | 1.43 | ||
| Cap/Depr | 82.4% | ||
| Cap/Sales | 7.12% | ||
| Interest Coverage | 5.43 | ||
| Cash Conversion | 86.34% | ||
| Profit Quality | 137.81% | ||
| Current Ratio | 2.45 | ||
| Quick Ratio | 1.47 | ||
| Altman-Z | 6.82 |
F-Score8
WACC10.14%
ROIC/WACC0.82
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)15.65%
EPS 3Y6.98%
EPS 5YN/A
EPS Q2Q%15.38%
EPS Next Y19.01%
EPS Next 2Y17.77%
EPS Next 3Y18.01%
EPS Next 5YN/A
Revenue 1Y (TTM)5.92%
Revenue growth 3Y6.93%
Revenue growth 5Y12.66%
Sales Q2Q%8.08%
Revenue Next Year7.39%
Revenue Next 2Y7.55%
Revenue Next 3Y7.89%
Revenue Next 5YN/A
EBIT growth 1Y15.39%
EBIT growth 3Y14.36%
EBIT growth 5Y28.71%
EBIT Next Year60.74%
EBIT Next 3Y24.99%
EBIT Next 5YN/A
FCF growth 1Y59.09%
FCF growth 3Y65.33%
FCF growth 5Y35.8%
OCF growth 1Y33.75%
OCF growth 3Y2.62%
OCF growth 5Y18.79%