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
AZEK had positive earnings in the past year.
In the past year AZEK had a positive cash flow from operations.
AZEK had positive earnings in 4 of the past 5 years.
In the past 5 years AZEK always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of AZEK (6.56%) is comparable to the rest of the industry.
With a Return On Equity value of 10.38%, AZEK perfoms like the industry average, outperforming 45.24% of the companies in the same industry.
AZEK has a Return On Invested Capital (8.35%) which is in line with 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 12.71%.
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
The Profit Margin of AZEK (9.92%) is comparable to the rest of the industry.
AZEK's Profit Margin has improved in the last couple of years.
AZEK has a Operating Margin (15.45%) which is comparable to the rest of the industry.
AZEK's Operating Margin has improved in the last couple of years.
AZEK has a better Gross Margin (37.19%) than 61.90% of its industry peers.
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.
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.
Compared to 1 year ago, AZEK has an improved debt to assets ratio.
2.2 Solvency
AZEK has an Altman-Z score of 6.79. This indicates that AZEK is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of AZEK (6.79) is better than 80.95% of its industry peers.
AZEK has a debt to FCF ratio of 2.56. This is a good value and a sign of high solvency as AZEK would need 2.56 years to pay back of 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.
AZEK has a better Debt to Equity ratio (0.36) than 61.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | 2.56 | ||
| Altman-Z | 6.79 |
ROIC/WACC0.81
WACC10.31%
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.
With a decent Current ratio value of 2.45, AZEK is doing good in the industry, outperforming 64.29% of the companies in the same industry.
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 has a Quick ratio of 1.47. This is in the better half 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.
AZEK shows a small growth in Revenue. In the last year, the Revenue has grown by 5.92%.
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
The Earnings Per Share is expected to grow by 18.21% on average over the next years. This is quite good.
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 Y18.61%
EPS Next 2Y17.7%
EPS Next 3Y18.21%
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
The Price/Earnings ratio is 40.95, which means the current valuation is very expensive for AZEK.
AZEK's Price/Earnings ratio is a bit more expensive when compared to the industry. AZEK is more expensive than 78.57% of the companies in the same industry.
AZEK's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.59.
AZEK is valuated quite expensively with a Price/Forward Earnings ratio of 32.77.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AZEK indicates a slightly more expensive valuation: AZEK is more expensive than 76.19% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.39. AZEK is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.95 | ||
| Fwd PE | 32.77 |
4.2 Price Multiples
76.19% of the companies in the same industry are cheaper than AZEK, based on the Enterprise Value to EBITDA ratio.
AZEK's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. AZEK is more expensive than 61.90% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.68 | ||
| EV/EBITDA | 22.28 |
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 18.21% in the coming years.
PEG (NY)2.2
PEG (5Y)N/A
EPS Next 2Y17.7%
EPS Next 3Y18.21%
5. Dividend
5.1 Amount
AZEK does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
54.47
+0.42 (+0.78%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryBuilding Products
Earnings (Last)
Earnings (Next)
Inst Owners102.98%
Inst Owner Change-2.9%
Ins Owners1.69%
Ins Owner Change-0.13%
Market Cap7.84B
Analysts71.43
Price Target54.47 (0%)
Short Float %5.29%
Short Ratio1.6
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)-0.4%
PT rev (3m)-6.98%
EPS NQ rev (1m)-6.06%
EPS NQ rev (3m)-6.53%
EPS NY rev (1m)-1.85%
EPS NY rev (3m)-2.57%
Revenue NQ rev (1m)-3.51%
Revenue NQ rev (3m)-3.47%
Revenue NY rev (1m)-0.13%
Revenue NY rev (3m)-0.76%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.95 | ||
| Fwd PE | 32.77 | ||
| P/S | 5.15 | ||
| P/FCF | 37.68 | ||
| P/OCF | 24.78 | ||
| P/B | 5.39 | ||
| P/tB | 22.93 | ||
| EV/EBITDA | 22.28 |
EPS(TTM)1.33
EY2.44%
EPS(NY)1.66
Fwd EY3.05%
FCF(TTM)1.45
FCFY2.65%
OCF(TTM)2.2
OCFY4.04%
SpS10.57
BVpS10.11
TBVpS2.38
PEG (NY)2.2
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 | 6.79 |
F-Score8
WACC10.31%
ROIC/WACC0.81
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 Y18.61%
EPS Next 2Y17.7%
EPS Next 3Y18.21%
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%