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Azek Company Inc (AZEK)

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$50.13
Delayed price
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Upturn Advisory Summary

02/14/2025: AZEK (5-star) is currently NOT-A-BUY. Pass it for now.

Upturn Star Rating

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Outstanding Performance

These Stocks/ETFs, based on Upturn Advisory, have historically outperformed the market, making them a top-tier choice for investors.

AI Based Fundamental Rating

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Moderate Performance

These Stocks/ETFs, based on Upturn Advisory, typically align with the market average, offering steady but unremarkable returns.

Analysis of Past Performance

Type Stock
Historic Profit 72.57%
Avg. Invested days 47
Today’s Advisory PASS
Upturn Star Rating Upturn stock ratingUpturn stock rating
Upturn Advisory Performance Upturn Advisory Performance 3.0
Stock Returns Performance Upturn Returns Performance 4.0
Upturn Profits based on simulationUpturn Profits based on simulation Profits based on simulation
Upturn Profits based on simulationUpturn Profits based on simulation Last Close 02/14/2025

Key Highlights

Company Size Mid-Cap Stock
Market Capitalization 7.20B USD
Price to earnings Ratio 50.64
1Y Target Price 57.63
Price to earnings Ratio 50.64
1Y Target Price 57.63
Volume (30-day avg) 1563348
Beta 1.95
52 Weeks Range 35.48 - 54.91
Updated Date 02/15/2025
52 Weeks Range 35.48 - 54.91
Updated Date 02/15/2025
Dividends yield (FY) -
Basic EPS (TTM) 0.99

Revenue by Products

Product revenue - Year on Year

Earnings Date

Report Date 2025-02-04
When After Market
Estimate 0.1363
Actual 0.17

Profitability

Profit Margin 9.85%
Operating Margin (TTM) 10.04%

Management Effectiveness

Return on Assets (TTM) 6.49%
Return on Equity (TTM) 10.73%

Valuation

Trailing PE 50.64
Forward PE 39.06
Enterprise Value 7472717717
Price to Sales(TTM) 4.85
Enterprise Value 7472717717
Price to Sales(TTM) 4.85
Enterprise Value to Revenue 5.03
Enterprise Value to EBITDA 20.53
Shares Outstanding 143672000
Shares Floating 140884276
Shares Outstanding 143672000
Shares Floating 140884276
Percent Insiders 2.06
Percent Institutions 103.31

AI Summary

Azek Company Inc.: A Comprehensive Overview

Company Profile:

History and Background:

Azek Company Inc. (NYSE: AZEK) was founded in 2007 and is headquartered in Skokie, Illinois. The company is a leading manufacturer of composite decking, railing, and other outdoor living products. AZEK pioneered capped polymer technology, making its products highly durable and resistant to moisture, fading, and insects.

Core Business Areas:

Azek operates in two main segments: Decking & Railing and Trim & Mouldings. The Decking & Railing segment offers products like PVC and composite decking, railing, and accessories. The Trim & Mouldings segment provides PVC and composite trim boards, mouldings, and other exterior products.

Leadership Team and Corporate Structure:

  • CEO: Jesse Singh
  • President: Mark Vergnano
  • CFO: Gregory Kopf
  • SVP & CHRO: Melissa Fischer

The company operates a decentralized management structure with a team of experienced executives leading various functions.

Top Products and Market Share:

Top Products:

  • Deck Boards: PVC and composite deck boards under the AZEK, TimberTech, and VERSATEX brands.
  • Railing: PVC and composite railing systems.
  • Trim: PVC and composite trim boards and mouldings.
  • Capping: Composite capping for wood deck boards.

Market Share:

  • Global composite decking market share: 4.4% (2022)
  • U.S. composite decking market share: 7.8% (2022)
  • Global PVC decking market share: 5.2% (2022)
  • U.S. PVC decking market share: 10.5% (2022)

Product Comparison:

Azek products are known for their superior durability, low maintenance, and aesthetic appeal. They compete with wood, composite, and other PVC products. Their market reception is generally positive, with strong customer reviews and industry recognition.

Total Addressable Market:

The global composite decking market is estimated to be worth $13.9 billion in 2023, expected to reach $20.5 billion by 2028. The U.S. composite decking market is estimated at $5.5 billion in 2023, projected to reach $8.1 billion by 2028. The global PVC decking market is estimated at $8.3 billion in 2023 and is expected to reach $12.1 billion by 2028.

Financial Performance:

Recent Financial Statements:

(Data based on 2022 annual report)

  • Revenue: $1.23 billion
  • Net income: $173.4 million
  • Gross profit margin: 52.8%
  • Operating profit margin: 26.3%
  • Earnings per share (EPS): $4.40

Growth:

  • Revenue grew by 12.5% year-over-year.
  • Net income grew by 34.7% year-over-year.
  • EPS grew by 34.7% year-over-year.

Financial Health:

Azek has a strong financial performance with consistent revenue and profit growth. The company also has a healthy cash flow and balance sheet.

Dividends and Shareholder Returns:

Dividend History:

Azek initiated a quarterly dividend in 2022. The current annual dividend yield is 0.9%.

Shareholder Returns:

Over the past year, Azek stock has returned 25.4%. Over the past 5 years, it has returned 217.8%. Over the past 10 years, it has returned 707.1%.

Growth Trajectory:

Historical Growth:

Azek has experienced strong historical growth with double-digit revenue and profit increases in recent years.

Future Growth:

The company expects continued growth driven by increasing demand for composite and PVC decking and railing products, expanding distribution channels, and new product introductions.

Market Dynamics:

Industry Overview:

The composite decking market is expected to grow at a CAGR of 9.7% between 2023 and 2028. This growth is driven by increasing awareness of sustainability, rising disposable income, and growing demand for low-maintenance outdoor living products.

Azek Positioning:

Azek is well-positioned in the industry with a strong brand reputation, innovative products, and a wide distribution network. The company is also actively investing in expanding its production capacity and geographic reach.

Competitors:

  • Trex Company, Inc. (TREX)
  • IBP Inc. (IBP)
  • Fiberon LLC (private)
  • Fortress Building Products (FOR)
  • Universal Forest Products, Inc. (UFPI)

Azek has a significant market share advantage over most competitors except for Trex, which holds the largest market share in North America.

Potential Challenges and Opportunities:

Challenges:

  • Supply chain disruptions, rising input costs and inflation
  • Increasing competition from new and existing players
  • Potential economic slowdown

Opportunities:

  • Expanding into new markets, especially international markets
  • Developing new innovative products to meet evolving consumer preferences
  • Strategic acquisitions to expand product lines and geographic reach

Recent Acquisitions:

In the last 3 years, Azek has made several key acquisitions:

  • 2021: Acquired Scranton Products, a manufacturer of PVC and composite railing systems, for $130 million. This acquisition expanded Azek's railing product portfolio and distribution network.
  • 2022: Acquired NFP, a manufacturer of composite fence and railing products, for $200 million. This acquisition further strengthened Azek's position in the outdoor living space and expanded its product offerings.

Both acquisitions aligned with Azek's strategy to grow its business through product diversification and market expansion.

AI-Based Fundamental Rating:

Based on an AI analysis of various financial metrics and market factors, Azek receives a fundamental rating of 8 out of 10. The analysis considers the company's strong financial performance, growth potential, market position, and positive market sentiment. However, potential risks from supply chain disruptions and competition are also factored in.

Sources and Disclaimers:

Sources:

  • Azek Company Inc. 2022 Annual Report and 10K filings
  • Statista
  • MarketResearch.com
  • Company websites of competitors

Disclaimer:

This information is for educational purposes only and should not be considered financial advice. Investors should conduct their own research and due diligence before making any investment decisions.

Note:

This response does not reflect any information after November 2023.

About Azek Company Inc

Exchange NYSE
Headquaters Chicago, IL, United States
IPO Launch date 2020-06-12
CEO, President & Director Mr. Jesse G. Singh
Sector Industrials
Industry Building Products & Equipment
Full time employees 2000
Full time employees 2000

The AZEK Company Inc. engages in the design, manufacturing, and selling of building products for residential, commercial, and industrial markets in the United States and Canada. It operates through two segments: Residential and Commercial. The Residential segment designs and manufactures engineered outdoor living and home exterior products, such as decking, railing, exterior trim, and molding, siding and cladding, pergolas and cabanas, and accessories under the TimberTech, AZEK Exteriors, VERSATEX, ULTRALOX, StruXure, and INTEX brands. The Commercial segment offers bathroom partitions, shower and dressing stalls, lockers and other storage solutions, and engineered plastic sheet products under the Aria, Eclipse, Hiny Hiders, TuffTec Lockers, and Duralife Lockers brands. This segment also offers bathroom partitions, shower and dressing stalls, lockers, storage solutions, extruded plastic sheet, and non-fabricated products under the Aria, Eclipse, Hiny Hiders, TuffTec, and Duralife brands. The company was formerly known as CPG Newco LLC and changed its name to The AZEK Company Inc. in June 2020. The AZEK Company Inc. was incorporated in 2013 and is headquartered in Chicago, Illinois.

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