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 Resideo (NYSE:REZI) 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 9 building materials stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 2.8% above.
Luckily, building materials stocks have performed well with share prices up 10% on average since the latest earnings results.
Resideo (NYSE:REZI)
Resideo Technologies, Inc. (NYSE: REZI) is a manufacturer and distributor of technology-driven products and solutions for home comfort, energy management, water management, and safety and security.
Resideo reported revenues of $1.83 billion, up 17.6% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ EPS estimates.
"We delivered strong results in the third quarter with organic sales growth at both Products and Solutions and ADI in addition to consolidated Adjusted EBITDA again coming in ahead of our outlook," commented Jay Geldmacher, Resideo's President and CEO.
Resideo scored the fastest revenue growth and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 20.5% since reporting and currently trades at $26.18.
Is now the time to buy Resideo? Access our full analysis of the earnings results here, it’s free.
Best Q3: 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 $348.2 million, down 10.4% year on year, outperforming analysts’ expectations by 2.4%. The business had a very strong quarter with a solid beat of analysts’ adjusted operating income and organic revenue estimates.
AZEK pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 18.3% since reporting. It currently trades at $54.99.
Is now the time to buy AZEK? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: UFP Industries (NASDAQ:UFPI)
Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ:UFPI) is a holding company making building materials for the construction, retail, and industrial sectors.
UFP Industries reported revenues of $1.65 billion, down 9.8% year on year, falling short of analysts’ expectations by 6.5%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
UFP Industries delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 2.1% since the results and currently trades at $134.39.
Read our full analysis of UFP Industries’s results here.
Vulcan Materials (NYSE:VMC)
Founded in 1909, Vulcan Materials (NYSE:VMC) is a producer of construction aggregates, primarily crushed stone, sand, and gravel.
Vulcan Materials reported revenues of $2.00 billion, down 8.3% year on year. This print came in 0.8% below analysts' expectations. It was a softer quarter as it also produced a miss of analysts’ EPS estimates.
The stock is up 8.4% since reporting and currently trades at $281.23.
Read our full, actionable report on Vulcan Materials here, it’s free.
Valmont (NYSE:VMI)
Credited with an invention in the 1950s that improved crop yields, Valmont (NYSE:VMI) provides engineered products and infrastructure services for the agricultural industry.
Valmont reported revenues of $1.02 billion, down 2.9% year on year. This number was in line with analysts’ expectations. More broadly, it was a mixed quarter as it also logged a decent beat of analysts’ EBITDA estimates.
The stock is up 14.5% since reporting and currently trades at $337.30.
Read our full, actionable report on Valmont here, it’s free.
Market Update
In response to the Fed's rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed's 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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