Wrapping up Q1 earnings, we look at the numbers and key takeaways for the building materials stocks, including Tecnoglass (NYSE: TGLS) and its peers.
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 satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was in line.
Luckily, building materials stocks have performed well with share prices up 15.2% on average since the latest earnings results.
Best Q1: Tecnoglass (NYSE: TGLS)
The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE: TGLS) is a manufacturer of architectural glass, windows, and aluminum products.
Tecnoglass reported revenues of $222.3 million, up 15.4% year on year. This print exceeded analysts’ expectations by 3.3%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ adjusted operating income estimates.
Interestingly, the stock is up 8.6% since reporting and currently trades at $76.82.
We think Tecnoglass is a good business, but is it a buy today? Read our full report here, it’s free.
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 $1.77 billion, up 19.1% year on year, outperforming analysts’ expectations by 3%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and full-year EBITDA guidance exceeding analysts’ expectations.
Resideo delivered the fastest revenue growth and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 37.9% since reporting. It currently trades at $24.07.
Is now the time to buy Resideo? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $1.60 billion, down 2.7% year on year, falling short of analysts’ expectations by 1.9%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
UFP Industries delivered the slowest revenue growth in the group. The stock is flat since the results and currently trades at $106.39.
Read our full analysis of UFP Industries’s results here.
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 $452.2 million, up 8.1% year on year. This number surpassed analysts’ expectations by 1.7%. Taking a step back, it was a mixed quarter as it also logged a decent beat of analysts’ EBITDA estimates but full-year EBITDA guidance slightly missing analysts’ expectations.
AZEK had the weakest full-year guidance update among its peers. The stock is up 9.5% since reporting and currently trades at $54.35.
Read our full, actionable report on AZEK here, it’s free.
Armstrong World (NYSE: AWI)
Started as a two-man shop dating back to the 1860s, Armstrong (NYSE: AWI) provides ceiling and wall products to commercial and residential spaces.
Armstrong World reported revenues of $382.7 million, up 17.3% year on year. This result topped analysts’ expectations by 3.4%. Overall, it was a strong quarter as it also put up a solid beat of analysts’ adjusted operating income estimates.
Armstrong World delivered the biggest analyst estimates beat among its peers. The stock is up 22.3% since reporting and currently trades at $169.61.
Read our full, actionable report on Armstrong World here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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