Wrapping up Q1 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 10 home construction materials stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 0.6%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.1% since the latest earnings results.
Best Q1: 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 $538.9 million, up 1.6% year on year. This print exceeded analysts’ expectations by 2%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ EPS estimates.
"Our first quarter net sales reflected modest growth over the prior year in a highly uncertain macroeconomic environment in both the U.S. and Europe," commented Mike Olosky, President and Chief Executive Officer of Simpson Manufacturing Co.,
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $154.40.
Is now the time to buy Simpson? Access our full analysis of the earnings results here, it’s free.
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 $776 million, down 19.1% year on year, outperforming analysts’ expectations by 0.8%. The business had an exceptional quarter with a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ adjusted operating income estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 39.9% since reporting. It currently trades at $3.37.
Is now the time to buy JELD-WEN? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Masco (NYSE:MAS)
Headquartered just outside of Detroit, MI, Masco (NYSE:MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.
Masco reported revenues of $1.80 billion, down 6.5% year on year, falling short of analysts’ expectations by 2%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
The stock is flat since the results and currently trades at $61.79.
Read our full analysis of Masco’s results here.
Griffon (NYSE:GFF)
Initially in the defense industry, Griffon (NYSE:GFF) is a now diversified company specializing in home improvement, professional equipment, and building products.
Griffon reported revenues of $611.7 million, down 9.1% year on year. This print missed analysts’ expectations by 1%. Taking a step back, it was still a strong quarter as it logged an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ EPS estimates.
The stock is flat since reporting and currently trades at $67.20.
Read our full, actionable report on Griffon here, it’s free.
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 $228.8 million, up 7.7% year on year. This result surpassed analysts’ expectations by 7.1%. Overall, it was an exceptional quarter as it also recorded an impressive beat of analysts’ organic revenue and EBITDA estimates.
Hayward delivered the biggest analyst estimates beat among its peers. The stock is up 2.1% since reporting and currently trades at $13.61.
Read our full, actionable report on Hayward here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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