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Armstrong World (AWI)
NYSE:AWI
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Armstrong World
(NYSE:AWI)78Outperform
Positive Factors
Earnings
Armstrong's full year performance in 2024 was well ahead of its initial guidance driven by strong organic revenue growth and M&A.
Product Innovation
Templok, an energy-saving tile, presents a long-term growth opportunity and may qualify for a significant tax credit.
Negative Factors
Market Stability
Management expects near-term choppiness for end markets, which could impact growth stability.
Armstrong World (AWI) vs. S&P 500 (SPY)
Market Cap
$6.50B
Dividend Yield0.77%
Average Volume (3M)285.26K
Price to Earnings (P/E)24.8
Beta (1Y)1.18
Revenue Growth11.62%
EPS Growth20.76%
CountryUS
Employees6,100
SectorIndustrials
Sector Strength66
IndustryConstruction
Share Statistics
EPS (TTM)6.02
Shares Outstanding43,464,252
10 Day Avg. Volume397,770
30 Day Avg. Volume285,258
Financial Highlights & Ratios
PEG Ratio1.20
Price to Book (P/B)N/A
Price to Sales (P/S)4.50
Price to Cash Flow (P/CF)18.80
P/FCF Ratio17.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$169.00Price Target Upside13.03% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Armstrong World Business Overview & Revenue Model
Company DescriptionArmstrong World Industries, Inc. (AWI) is a leading designer and manufacturer of innovative commercial and residential ceiling, wall, and suspension system solutions. With a strong presence in the building and construction industry, AWI primarily serves commercial, residential, and remodeling markets. The company's core products include mineral fiber, metal, wood, and specialty ceiling products, as well as wall solutions that improve aesthetics and acoustics in interior spaces.
How the Company Makes MoneyArmstrong World Industries generates revenue through the manufacturing and sale of its ceiling and wall systems. The company's primary revenue streams include sales from its core mineral fiber and architectural specialties segments. AWI sells its products to a broad range of customers, including contractors, distributors, and retailers, who then supply them to end-users in the commercial and residential sectors. Additionally, the company benefits from strategic partnerships and collaborations that enhance its product offerings and market reach. AWI's focus on innovation and sustainability also plays a crucial role in attracting new business opportunities and maintaining a competitive edge in the industry.
Armstrong World Financial Statement Overview
Summary
Armstrong World demonstrates a strong financial performance with consistent revenue growth and profitability. The company has successfully deleveraged its balance sheet, enhancing financial stability, and continues to generate robust cash flows. Despite these strengths, there is room for improvement in operational efficiency and cash flow generation relative to net income.Income Statement
Armstrong World has shown strong revenue growth, with a 11.62% increase from 2023 to 2024. Gross profit and net profit margins stand at 40.23% and 18.32% respectively, indicating solid profitability. However, the EBIT and EBITDA margins are both at 25.89%, which is robust but shows room for improvement in operational efficiency.85
Very Positive
Balance Sheet
The company's debt-to-equity ratio has significantly improved to 0.13, indicating a strong reduction in leverage due to decreased total debt. Return on Equity (ROE) is impressive at 34.99%, showcasing effective use of equity to generate profits. The equity ratio stands at 41.08%, reflecting a healthy proportion of equity financing.78
Positive
Cash Flow
Free cash flow grew by 22.86% from 2023 to 2024, highlighting strong cash generation. The operating cash flow to net income ratio is 1.01, indicating good cash conversion from profits. The free cash flow to net income ratio is 0.69, suggesting a strong ability to generate cash relative to net income, but with some potential for improvement.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.45B | 1.30B | 1.23B | 1.11B | 936.90M | Gross Profit |
| 581.60M | 497.00M | 449.10M | 405.60M | 333.10M | EBIT |
| 374.30M | 323.70M | 212.00M | 165.00M | 169.80M | EBITDA |
| 490.10M | 434.30M | 309.00M | 283.10M | -13.00M | Net Income Common Stockholders |
| 264.90M | 223.80M | 202.90M | 183.20M | -84.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 79.30M | 70.80M | 106.00M | 98.10M | 136.90M | Total Assets |
| 1.84B | 1.67B | 1.69B | 1.71B | 1.72B | Total Debt |
| 97.30M | 640.40M | 687.00M | 671.60M | 755.70M | Net Debt |
| 18.00M | 569.60M | 581.00M | 573.50M | 618.80M | Total Liabilities |
| 1.09B | 1.08B | 1.15B | 1.19B | 1.27B | Stockholders Equity |
| 757.10M | 591.80M | 535.00M | 519.70M | 450.90M |
| Cash Flow | Free Cash Flow | |||
| 184.00M | 149.70M | 107.60M | 107.40M | 163.40M | Operating Cash Flow |
| 266.80M | 233.50M | 182.40M | 187.20M | 218.80M | Investing Cash Flow |
| -79.30M | -10.40M | 28.20M | -13.90M | -141.10M | Financing Cash Flow |
| -177.60M | -258.60M | -201.90M | -212.10M | 13.50M |
Armstrong World Technical Analysis
Neutral
149.52
Price Trends
148.19
Positive
148.61
Positive
134.94
Positive
Market Momentum
0.20
Positive
48.57
Neutral
45.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AWI, the sentiment is Neutral. The current price of 149.52 is below the 20-day moving average (MA) of 150.93, above the 50-day MA of 148.19, and above the 200-day MA of 134.94, indicating a neutral trend. The MACD of 0.20 indicates Positive momentum. The RSI at 48.57 is Neutral, neither overbought nor oversold. The STOCH value of 45.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AWI.
Armstrong World Risk Analysis
Armstrong World disclosed 24 risk factors in its most recent earnings report. Armstrong World reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Armstrong World Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $6.50B | 24.84 | 39.28% | 0.77% | 11.62% | 20.76% | |
77 Outperform | $15.99B | 24.57 | 25.61% | 1.56% | 0.12% | 24.30% | |
71 Outperform | $12.45B | 19.76 | 12.63% | 1.72% | 13.41% | -44.36% | |
63 Neutral | $29.02B | 14.69 | 22.83% | 0.66% | -3.56% | 70.93% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
60 Neutral | $15.72B | 19.76 | -118.61% | 1.57% | -1.74% | -6.91% | |
44 Neutral | $502.31M | ― | -25.51% | ― | -15.09% | -358.01% |
* Industrials Sector Average
Performance Comparison
AWI
Armstrong World
149.52
29.91
25.01%
MLM
Martin Marietta Materials
460.39
-131.92
-22.27%
MAS
Masco
75.20
1.21
1.64%
OC
Owens Corning
144.58
-9.77
-6.33%
RPM
RPM International
122.55
6.86
5.93%
JELD
JELD-WEN
6.16
-12.28
-66.59%
Armstrong World Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 2.82% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Positive
The earnings call showcased Armstrong World Industries' strong financial performance in 2024, driven by strategic acquisitions and innovation in energy-saving technologies. Despite the positive results, the company faces challenges from choppy market conditions and the impact of recent acquisitions on margins. The outlook for 2025 remains optimistic, with expected sales and earnings growth, although market uncertainties and discretionary renovation weakness pose potential hurdles.Highlights
Record-Setting Financial Performance
Armstrong World Industries reported record-setting fourth quarter and full year 2024 results with net sales increasing nearly 12%, adjusted EBITDA growing 13%, and adjusted diluted earnings per share up 19%.
Acquisition-Driven Growth in Architectural Specialties
The Architectural Specialties segment saw net sales growth of 27% and adjusted EBITDA growth of 24%, driven by acquisitions of 3Form and Zaynor. Organic sales in this segment also grew by 15% year-over-year.
Strong Performance in Mineral Fiber Segment
Mineral Fiber segment achieved 9% AUV growth, driven by mix and pricing, with adjusted EBITDA growing by 10% and margins expanding by 70 basis points to 37.5%.
Temploc Energy-Saving Technology
Introduction of Temploc ceiling tiles, which can reduce heating and cooling costs, may qualify for an investment tax credit of up to 50% under new IRS regulations.
Positive Outlook for 2025
Guidance for 2025 includes net sales growth of 9% to 11% and adjusted EBITDA growth of 8% to 12%, with continued progress expected in the architectural specialties and mineral fiber segments.
Lowlights
Choppy Market Conditions
Market conditions are expected to be choppy in 2025 due to uncertainties around potential tariffs, new policies, inflation, and interest rates, which could impact project timing and decisions.
Discretionary Renovation Weakness
Discretionary renovation activity remains weak due to market uncertainties, impacting growth potential in the renovation market.
Impact of Recent Acquisitions on Margins
Recent acquisitions, such as Zaynor, have compressed total company adjusted EBITDA margin by 100 basis points, with efforts needed to improve profitability and margin of acquired businesses.
Company Guidance
During the Armstrong World Industries earnings call, the company provided guidance for 2025, projecting total company net sales growth of 9% to 11%. This growth is expected to be driven by continued strength in the architectural specialties segment, with more than half of the growth attributed to recent acquisitions, including 3Form and Zaynor. The mineral fiber segment is anticipated to experience flattish volume, with AUV growth above the historical average of about 5%. The company also forecasted adjusted EBITDA growth of 8% to 12%, with adjusted EBITDA margins expected to remain flat, factoring in the integration of recent acquisitions. Armstrong plans to increase capital expenditures for investments in energy-saving ceiling manufacturing capabilities. Despite potential market choppiness due to tariffs and new policies, the company remains optimistic about achieving these targets through strong execution and leveraging its innovation pipeline.Armstrong World Corporate Events
Business Operations and StrategyFinancial Disclosures
Armstrong World Reports Record 2024 Financial Results
Positive
Feb 25, 2025
On February 25, 2025, Armstrong World Industries reported record-setting financial results for the fourth quarter and full year of 2024, with significant increases in net sales, operating income, and earnings per share. The company highlighted robust growth in its Architectural Specialties segment, driven by strategic acquisitions and increased custom project sales, and expressed confidence in sustaining its growth trajectory in 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.