AZEK CO INC/THE (AZEK)
US05478C1053 - Common Stock
Overall AZEK gets a fundamental rating of 5 out of 10. We evaluated AZEK against 43 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 quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
AZEK had positive earnings in the past year.
In the past year AZEK had a positive cash flow from operations.
In multiple years AZEK reported negative net income over the last 5 years.
In the past 5 years AZEK always reported a positive cash flow from operatings.
1.2 Ratios
AZEK has a worse Return On Assets (5.22%) than 60.47% of its industry peers.
The Return On Equity of AZEK (8.80%) is worse than 60.47% of its industry peers.
AZEK has a Return On Invested Capital of 6.00%. This is in the lower half of the industry: AZEK underperforms 69.77% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AZEK is significantly below the industry average of 13.67%.
The 3 year average ROIC (4.64%) for AZEK is below the current ROIC(6.00%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.22% | ||
| ROE | 8.8% | ||
| ROIC | 6% |
ROA(3y)3.43%
ROA(5y)0.57%
ROE(3y)5.5%
ROE(5y)0.6%
ROIC(3y)4.64%
ROIC(5y)N/A
1.3 Margins
With a decent Profit Margin value of 8.57%, AZEK is doing good in the industry, outperforming 60.47% of the companies in the same industry.
AZEK's Profit Margin has improved in the last couple of years.
The Operating Margin of AZEK (12.30%) is comparable to the rest of the industry.
AZEK's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 34.53%, AZEK is in the better half of the industry, outperforming 62.79% of the companies in the same industry.
AZEK's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.3% | ||
| PM (TTM) | 8.57% | ||
| GM | 34.53% |
OM growth 3YN/A
OM growth 5Y4.21%
PM growth 3YN/A
PM growth 5Y38.25%
GM growth 3Y-1.01%
GM growth 5Y1.52%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AZEK is destroying value.
Compared to 1 year ago, AZEK has less shares outstanding
The number of shares outstanding for AZEK has been increased compared to 5 years ago.
AZEK has about the same debt/assets ratio as last year.
2.2 Solvency
An Altman-Z score of 5.36 indicates that AZEK is not in any danger for bankruptcy at the moment.
AZEK has a better Altman-Z score (5.36) than 60.47% of its industry peers.
The Debt to FCF ratio of AZEK is 2.51, which is a good value as it means it would take AZEK, 2.51 years of fcf income to pay off all of its debts.
AZEK's Debt to FCF ratio of 2.51 is in line compared to the rest of the industry. AZEK outperforms 51.16% of its industry peers.
AZEK has a Debt/Equity ratio of 0.48. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.48, AZEK is in line with its industry, outperforming 51.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.48 | ||
| Debt/FCF | 2.51 | ||
| Altman-Z | 5.36 |
ROIC/WACC0.54
WACC11.17%
2.3 Liquidity
A Current Ratio of 2.99 indicates that AZEK has no problem at all paying its short term obligations.
AZEK has a better Current ratio (2.99) than 74.42% of its industry peers.
AZEK has a Quick Ratio of 1.67. This is a normal value and indicates that AZEK is financially healthy and should not expect problems in meeting its short term obligations.
AZEK has a better Quick ratio (1.67) than 74.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.99 | ||
| Quick Ratio | 1.67 |
3. Growth
3.1 Past
AZEK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 36.23%, which is quite impressive.
Measured over the past years, AZEK shows a very strong growth in Earnings Per Share. The EPS has been growing by 55.18% on average per year.
AZEK shows a small growth in Revenue. In the last year, the Revenue has grown by 6.28%.
AZEK shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.98% yearly.
EPS 1Y (TTM)36.23%
EPS 3YN/A
EPS 5Y55.18%
EPS growth Q2Q211.11%
Revenue 1Y (TTM)6.28%
Revenue growth 3Y15.07%
Revenue growth 5Y14.98%
Revenue growth Q2Q11.16%
3.2 Future
AZEK is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 27.82% yearly.
Based on estimates for the next years, AZEK will show a small growth in Revenue. The Revenue will grow by 6.58% on average per year.
EPS Next Y58.33%
EPS Next 2Y35.14%
EPS Next 3Y27.82%
EPS Next 5YN/A
Revenue Next Year5.23%
Revenue Next 2Y6.3%
Revenue Next 3Y6.58%
Revenue Next 5YN/A
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past 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
Based on the Price/Earnings ratio of 49.49, the valuation of AZEK can be described as expensive.
83.72% of the companies in the same industry are cheaper than AZEK, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of AZEK to the average of the S&P500 Index (28.28), we can say AZEK is valued expensively.
With a Price/Forward Earnings ratio of 33.96, AZEK can be considered very expensive at the moment.
72.09% of the companies in the same industry are cheaper than AZEK, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of AZEK to the average of the S&P500 Index (20.88), we can say AZEK is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.49 | ||
| Fwd PE | 33.96 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AZEK indicates a slightly more expensive valuation: AZEK is more expensive than 69.77% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AZEK indicates a slightly more expensive valuation: AZEK is more expensive than 67.44% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.7 | ||
| EV/EBITDA | 23.35 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
AZEK's earnings are expected to grow with 27.82% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.85
PEG (5Y)0.9
EPS Next 2Y35.14%
EPS Next 3Y27.82%
5. Dividend
5.1 Amount
AZEK does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
AZEK CO INC/THE
NYSE:AZEK (5/3/2024, 7:04:00 PM)
After market: 46.925 +0.4 (+0.87%)46.52
+0.79 (+1.73%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap6.78B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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PT rev (1m)
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EPS NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.49 | ||
| Fwd PE | 33.96 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.85
PEG (5Y)0.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.22% | ||
| ROE | 8.8% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 12.3% | ||
| PM (TTM) | 8.57% | ||
| GM | 34.53% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.61
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.48 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.99 | ||
| Quick Ratio | 1.67 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)36.23%
EPS 3YN/A
EPS 5Y
EPS growth Q2Q
EPS Next Y58.33%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)6.28%
Revenue growth 3Y15.07%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
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