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Armstrong World (AWI)
NYSE:AWI

Armstrong World (AWI) AI Stock Analysis

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Armstrong World

(NYSE:AWI)

Rating:77Outperform
Price Target:
$172.00
▲(7.11%Upside)
Armstrong World Industries exhibits strong financial performance with consistent revenue growth and profitability, supported by effective debt management and strategic acquisitions. While technical analysis indicators suggest caution due to potential overbought conditions, the company's valuation is reasonable, and the earnings call underscores confidence in continued growth. Collectively, these factors result in a solid overall stock score.
Positive Factors
Architectural Specialties segment
AWI maintains a strong growth outlook for its Architectural Specialties segment with revenue growth over 20%.
Earnings and financial performance
AWI is well positioned to grow earnings and cash flow even if the macro environment remains challenging.
Product innovation
Templok energy-saving ceiling panels can reduce heating and cooling costs by up to 15% and carry 2-3x AUV compared to traditional ceiling tiles.
Negative Factors
Growth stability
Management expects near-term choppiness for end markets, which could impact growth stability.
Market conditions
Management sees end markets 'moving sideways', guiding to lower mineral fiber volumes due to weaker discretionary activity given the macro uncertainty.
Mineral Fiber volumes
Mineral Fiber volumes were negatively impacted by one less day and weaker home center demand due to weather conditions.

Armstrong World (AWI) vs. SPDR S&P 500 ETF (SPY)

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. Operating primarily in North America, the company serves diverse sectors including education, healthcare, office, retail, and hospitality. AWI is known for its high-quality and sustainable products that enhance the aesthetics and functionality of spaces.
How the Company Makes MoneyArmstrong World Industries generates revenue primarily through the sale of its ceiling and wall systems, which are used in a variety of commercial and residential applications. The company earns money by manufacturing and distributing these products to building materials distributors and retailers, as well as directly to contractors and builders. AWI's revenue streams include sales of mineral fiber and architectural specialties products. The company also benefits from partnerships and strategic acquisitions that expand its product offerings and market reach. Additionally, AWI invests in innovation and sustainability to maintain its competitive edge and meet the evolving demands of the construction and design industries.

Armstrong World Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: 15.83%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Positive
Armstrong World Industries delivered strong financial results with significant sales and EBITDA growth, driven by effective execution and innovative product offerings. However, the company faces challenges from market uncertainty and the impact of tariffs, which may affect discretionary spending and project timelines in the latter half of the year.
Q1-2025 Updates
Positive Updates
Record-Setting Sales and EBITDA
Armstrong World Industries reported a 17% increase in total company net sales and a 16% increase in adjusted EBITDA, marking the best Q1 margin performance since 2020.
Mineral Fiber Segment Performance
Net sales in the Mineral Fiber segment increased by 2%, and EBITDA increased by 7%. Average Unit Value (AUV) rose 7% despite weather-related volume challenges, leading to a 180 basis point margin expansion.
Architectural Specialty Segment Growth
Architectural Specialty sales grew 59%, with organic sales up 11% and significant contributions from Three Form and Zaynor acquisitions. Adjusted EBITDA increased by 94%, with a margin expansion of 310 basis points.
Strong Free Cash Flow and Shareholder Returns
Adjusted free cash flow increased by 10%, supported by higher cash earnings and dividends. The company repurchased $22 million in shares and paid $13 million in dividends in Q1 2025.
Innovative Product Development
Armstrong's TempLock energy-saving ceilings and ProjectWorks platform are gaining traction, contributing to energy efficiency and productivity in the building sector.
Negative Updates
Market Uncertainty Impact
The uncertainty surrounding tariffs and macroeconomic conditions may lead to a slowdown in discretionary renovation work and project delays in the second half of 2025.
Home Center Channel Challenges
Lower sales volumes were reported in the Mineral Fiber segment due to decreased foot traffic in home center channels, impacted by severe weather conditions.
Impact of Steel Tariffs on WAVE
Steel tariffs have led to increased prices for locally sourced steel, requiring the WAVE joint venture to implement two price increases in the first quarter to offset these costs.
Company Guidance
In the Q1 2025 earnings call for Armstrong World Industries, the company announced a 17% increase in total net sales and a 16% rise in adjusted EBITDA, marking record-setting results. The Mineral Fiber segment saw a 2% increase in net sales and a 7% rise in EBITDA, with an impressive 180 basis point expansion in EBITDA margin to 43%. The Architectural Specialty segment experienced a robust 59% sales growth, aided by recent acquisitions contributing 47 percentage points, and an 11% organic growth. The company anticipates continued strong growth with the reaffirmation of its 2025 guidance, despite macroeconomic uncertainties such as tariffs. Additionally, Armstrong highlighted its focus on maintaining its pricing strategy, productivity, and cost management to offset potential impacts, while leveraging its diverse market presence and innovative product offerings to sustain growth.

Armstrong World Financial Statement Overview

Summary
Armstrong World demonstrates strong financial performance with consistent revenue growth and robust profitability margins. The balance sheet is stable with low debt levels and impressive returns on equity. Cash flow management remains strong with positive growth and efficient cash generation from operations, positioning the company favorably in the construction industry.
Income Statement
85
Very Positive
Armstrong World shows strong revenue growth with a 4% increase in TTM (Trailing-Twelve-Months) compared to the previous year. Gross Profit Margin remains healthy at 40.44%, and Net Profit Margin is solid at 18.25%. The company maintains robust EBIT and EBITDA margins at 24.04% and 30.04%, respectively, indicating operational efficiency and profitability.
Balance Sheet
78
Positive
The company's balance sheet is stable with a manageable Debt-to-Equity Ratio of 0.12. The Return on Equity (ROE) is impressive at 34.54%, reflecting effective use of equity to generate profits. The Equity Ratio of 42.78% suggests a healthy balance of equity financing, though a slight increase in liabilities warrants monitoring.
Cash Flow
80
Positive
Armstrong World demonstrates solid cash flow management with a Free Cash Flow Growth Rate of 5.54% in TTM. The Operating Cash Flow to Net Income Ratio stands at 1.03, showcasing efficient cash generation from operations. The Free Cash Flow to Net Income Ratio is 0.71, indicating strong cash flow relative to net income.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.50B1.45B1.30B1.23B1.11B936.90M
Gross Profit607.20M581.60M497.00M449.10M405.60M333.10M
EBITDA481.60M495.60M434.30M309.00M283.10M-13.00M
Net Income274.10M264.90M223.80M202.90M183.20M-84.10M
Balance Sheet
Total Assets1.85B1.84B1.67B1.69B1.71B1.72B
Cash, Cash Equivalents and Short-Term Investments82.80M79.30M70.80M106.00M98.10M136.90M
Total Debt595.00M599.90M640.40M687.00M671.60M755.70M
Total Liabilities1.06B1.09B1.08B1.15B1.19B1.27B
Stockholders Equity793.40M757.10M591.80M535.00M519.70M450.90M
Cash Flow
Free Cash Flow194.20M184.00M149.70M107.60M107.40M163.40M
Operating Cash Flow281.40M266.80M233.50M182.40M187.20M218.80M
Investing Cash Flow-79.20M-79.30M-10.40M28.20M-13.90M-141.10M
Financing Cash Flow-188.10M-177.60M-258.60M-201.90M-212.10M13.50M

Armstrong World Technical Analysis

Technical Analysis Sentiment
Positive
Last Price160.58
Price Trends
50DMA
150.67
Positive
100DMA
147.55
Positive
200DMA
145.38
Positive
Market Momentum
MACD
1.50
Negative
RSI
67.51
Neutral
STOCH
96.65
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AWI, the sentiment is Positive. The current price of 160.58 is above the 20-day moving average (MA) of 154.68, above the 50-day MA of 150.67, and above the 200-day MA of 145.38, indicating a bullish trend. The MACD of 1.50 indicates Negative momentum. The RSI at 67.51 is Neutral, neither overbought nor oversold. The STOCH value of 96.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$7.59B51.3110.62%5.93%3.50%
AWAWI
77
Outperform
$6.92B25.5338.60%0.77%14.55%17.54%
SSSSD
74
Outperform
$6.57B20.4318.10%0.71%1.38%-3.80%
LPLPX
72
Outperform
$6.09B15.3824.41%1.28%8.09%55.08%
68
Neutral
$5.74B29.3023.07%-9.10%-21.50%
65
Neutral
$10.36B15.105.28%2.01%2.70%-26.16%
63
Neutral
$6.19B15.0518.62%1.95%-3.48%4.55%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AWI
Armstrong World
160.58
48.29
43.00%
FBIN
Fortune Brands Innovations
51.30
-12.67
-19.81%
LPX
Louisiana-Pacific
87.82
6.38
7.83%
SSD
Simpson Manufacturing Co
157.86
-9.56
-5.71%
TREX
Trex Company
54.88
-19.24
-25.96%
AZEK
AZEK Company
52.95
10.82
25.68%

Armstrong World Corporate Events

Executive/Board ChangesShareholder Meetings
Armstrong World Elects Board and Appoints Committees
Neutral
Jun 17, 2025

On June 12, 2025, Armstrong World Industries, Inc. held its Annual Meeting of Shareholders, where all seven nominees were elected to the Board of Directors, KPMG LLP was ratified as the independent registered public accounting firm for 2025, and the executive compensation program was approved on an advisory basis. Following the meeting, the Board appointed members and chairs to its standing committees, impacting the company’s governance structure and potentially influencing its strategic direction.

The most recent analyst rating on (AWI) stock is a Hold with a $122.00 price target. To see the full list of analyst forecasts on Armstrong World stock, see the AWI Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Armstrong World Releases Updated Investor Presentation
Positive
May 8, 2025

On May 8, 2025, Armstrong World Industries released an updated Investor Presentation on its website ahead of upcoming investor meetings. The presentation highlights the company’s strong financial performance in 2024, with net sales of $1,446 million and an adjusted EBITDA of $486 million. Armstrong World emphasizes its focus on sustainability and innovation, aiming to lead in the design and building of spaces that promote thriving communities. The company continues to leverage its strong brand, extensive product portfolio, and strategic growth initiatives to maintain its industry-leading position.

Financial Disclosures
Armstrong World Reports Record Q1 2025 Financial Results
Positive
Apr 29, 2025

On April 29, 2025, Armstrong World Industries reported record-setting first-quarter financial results for 2025, with net sales increasing by 17.3% compared to the previous year, driven by acquisitions and strong Mineral Fiber Average Unit Value growth. The company achieved a 14% increase in operating income and a 16% rise in diluted net earnings per share, reaffirming its 2025 guidance across key metrics. Despite challenges in demand, Armstrong World Industries demonstrated resilience with significant contributions from its 2024 acquisitions and organic growth in its Architectural Specialties segment.

Executive/Board Changes
Armstrong World Appoints Mark Hershey as COO
Neutral
Apr 2, 2025

On March 31, 2025, Armstrong World Industries announced the appointment of Mark A. Hershey as Senior Vice President & Chief Operating Officer, effective April 1, 2025. Hershey, who has been with the company since 2011, previously served as Senior Vice President, Americas, and has held various leadership roles, indicating a strategic move to strengthen the company’s operational leadership.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: May 09, 2025