As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the home construction materials industry, including Hayward (NYSE:HAYW) 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 strong Q2. As a group, revenues missed analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
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 $299.6 million, up 5.3% year on year. This print exceeded analysts’ expectations by 3.4%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.
Interestingly, the stock is up 2.3% since reporting and currently trades at $15.30.
Is now the time to buy Hayward? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $2.05 billion, down 1.9% year on year, outperforming analysts’ expectations by 2.5%. The business had a stunning quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.
The market seems content with the results as the stock is up 4.8% since reporting. It currently trades at $68.90.
Is now the time to buy Masco? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Gibraltar (NASDAQ:ROCK)
Gibraltar (NASDAQ:ROCK) makes renewable energy, agriculture technology and infrastructure products. Its mission statement is to make everyday living more sustainable.
Gibraltar reported revenues of $309.5 million, up 13.1% year on year, falling short of analysts’ expectations by 17.9%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and full-year EPS guidance missing analysts’ expectations significantly.
Gibraltar delivered the fastest revenue growth but had the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 10.2% since the results and currently trades at $57.77.
Read our full analysis of Gibraltar’s results here.
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 $387.8 million, up 3% year on year. This print topped analysts’ expectations by 2.8%. It was a very strong quarter as it also logged a solid beat of analysts’ organic revenue estimates and a solid beat of analysts’ adjusted operating income estimates.
The stock is down 9% since reporting and currently trades at $58.70.
Read our full, actionable report on Trex here, it’s free.
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 $631.1 million, up 5.7% year on year. This result beat analysts’ expectations by 5.3%. Overall, it was an exceptional quarter as it also put up a solid beat of analysts’ EBITDA estimates and a decent beat of analysts’ EPS estimates.
Simpson achieved the biggest analyst estimates beat among its peers. The stock is up 9.2% since reporting and currently trades at $181.48.
Read our full, actionable report on Simpson 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.
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