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 41 industry peers in the Building Products industry. AZEK has an excellent financial health rating, but there are some minor concerns on its profitability. 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.
AZEK had a positive operating cash flow in the past year.
Of the past 5 years AZEK 4 years were profitable.
AZEK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.56%, AZEK is in line with its industry, outperforming 54.76% of the companies in the same industry.
AZEK has a Return On Equity (10.38%) which is in line with its industry peers.
AZEK's Return On Invested Capital of 8.35% is in line compared 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 13.12%.
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
AZEK has a Profit Margin of 9.92%. This is comparable to the rest of the industry: AZEK outperforms 57.14% of its industry peers.
AZEK's Profit Margin has improved in the last couple of years.
The Operating Margin of AZEK (15.45%) is comparable to the rest of the industry.
AZEK's Operating Margin has improved in the last couple of years.
AZEK has a Gross Margin of 37.19%. This is in the better half of the industry: AZEK outperforms 61.90% of its industry peers.
AZEK's Gross Margin has improved in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AZEK is destroying value.
AZEK has less shares outstanding than it did 1 year ago.
The number of shares outstanding for AZEK has been increased compared to 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 6.82. This indicates that AZEK is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of AZEK (6.82) 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 has a Debt to FCF ratio of 2.56. This is in the better half 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.
With a decent Debt to Equity ratio value of 0.36, AZEK is doing good in the industry, outperforming 61.90% of the companies in the same industry.
| 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.
The Current ratio of AZEK (2.45) is better than 64.29% of its industry peers.
A Quick Ratio of 1.47 indicates that AZEK should not have too much problems paying its short term obligations.
The Quick ratio of AZEK (1.47) is better than 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.
The Earnings Per Share has been growing slightly by 6.98% on average over the past years.
Looking at the last year, AZEK shows a small growth in Revenue. The Revenue has grown by 5.92% in the last year.
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)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
AZEK is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 18.01% yearly.
The Revenue is expected to grow by 7.89% on average over the next years.
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
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.
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 40.86, which means the current valuation is very expensive for 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's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.93.
With a Price/Forward Earnings ratio of 32.66, AZEK can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, AZEK is valued a bit more expensive than the industry average as 76.19% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.31, AZEK is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.86 | ||
| Fwd PE | 32.66 |
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 76.19% of the companies in the same industry.
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 AZEK does not grow enough to justify the current Price/Earnings ratio.
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 Change-7.42%
Ins Owners1.64%
Ins Owner Change-4.88%
Market Cap7.82B
Analysts71.43
Price Target54.47 (0.22%)
Short Float %N/A
Short RatioN/A
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%