Wrapping up Q3 earnings, we look at the numbers and key takeaways for the home construction materials stocks, including Simpson (NYSE:SSD) and its peers.
Traditionally, home construction materials companies have built economic moats with expertise in specialized areas, brand recognition, and strong relationships with contractors. More recently, advances to address labor availability and job site productivity have spurred innovation that is driving incremental demand. However, these companies are at the whim of residential 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 home construction materials companies.
The 11 home construction materials stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 1%.
In light of this news, share prices of the companies have held steady as they are up 2.2% on average since the latest earnings results.
Simpson (NYSE:SSD)
Aiming to build safer and stronger buildings, Simpson (NYSE:SSD) designs and manufactures structural connectors, anchors, and other construction products.
Simpson reported revenues of $587.2 million, up 1.2% year on year. This print was in line with analysts’ expectations, but overall, it was a disappointing quarter for the company with a significant miss of analysts’ EBITDA and EPS estimates.
"Our third quarter net sales of $587.2 million were up modestly year-over-year despite the housing markets in both the U.S. and Europe remaining under pressure," commented Mike Olosky, President and Chief Executive Officer of Simpson Manufacturing Co.,
Unsurprisingly, the stock is down 2.1% since reporting and currently trades at $182.40.
Read our full report on Simpson here, it’s free.
Best Q3: Trex (NYSE:TREX)
Addressing the demand for aesthetically-pleasing and unique outdoor living spaces, Trex Company (NYSE:TREX) makes wood-alternative decking, railing, and patio furniture.
Trex reported revenues of $233.7 million, down 23.1% year on year, outperforming analysts’ expectations by 3.7%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates.
Trex achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 14.5% since reporting. It currently trades at $76.12.
Is now the time to buy Trex? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: JELD-WEN (NYSE:JELD)
Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE:JELD) manufactures doors, windows, and other related building products.
JELD-WEN reported revenues of $934.7 million, down 13.2% year on year, falling short of analysts’ expectations by 5.6%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations significantly.
JELD-WEN delivered the weakest full-year guidance update in the group. As expected, the stock is down 23.1% since the results and currently trades at $10.87.
Read our full analysis of JELD-WEN’s results here.
Hayward (NYSE:HAYW)
Credited with introducing the first variable-speed pool pump, Hayward (NYSE:HAYW) makes residential and commercial pool equipment and accessories.
Hayward reported revenues of $227.6 million, up 3.3% year on year. This number surpassed analysts’ expectations by 2.1%. It was a very strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ EPS estimates.
Hayward pulled off the highest full-year guidance raise among its peers. The stock is up 8.4% since reporting and currently trades at $16.01.
Read our full, actionable report on Hayward here, it’s free.
American Woodmark (NASDAQ:AMWD)
Starting as a small millwork shop, American Woodmark (NASDAQ:AMWD) is a cabinet manufacturing company that helps customers from inspiration to installation.
American Woodmark reported revenues of $452.5 million, down 4.5% year on year. This print came in 1.3% below analysts' expectations. Overall, it was a disappointing quarter as it also logged a significant miss of analysts’ adjusted operating income and EPS estimates.
The stock is down 12.3% since reporting and currently trades at $88.34.
Read our full, actionable report on American Woodmark here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September, a quarter in November) have kept 2024 stock markets frothy, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there's still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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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