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AZEK Company Inc (AZEK)
:AZEK

AZEK Company (AZEK) AI Stock Analysis

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AZEK Company

(NYSE:AZEK)

Rating:79Outperform
Price Target:
$62.00
▲(14.08%Upside)
AZEK's overall stock score of 79 reflects solid financial performance and positive earnings call insights, including growth potential from the merger with James Hardie. While valuation is a concern due to a high P/E ratio, the technical analysis supports a bullish trend. The primary strengths are financial health and strategic initiatives, but investors should be aware of valuation risks.
Positive Factors
Growth Synergies
Management pointed to $500 million in commercial synergies, including $125 million in cost synergies, cross-sell opportunities across the contractor landscape, and shared wood conversion stories as key selling points.
Market Expansion
The combined company is expected to increase its total addressable market in North America.
Strategic Acquisition
James Hardie announced it will acquire AZEK for $8.75 billion, or a 37% premium to Friday’s close.
Negative Factors
Downgrade in Stock Rating
AZEK is downgraded to Peer Perform from Outperform following the announced acquisition by James Hardie.
Investor Skepticism
The ~20% decline in JHX's value is larger than anticipated and a number of investors have questioned whether the deal ultimately reaches the finish line.
Stock Valuation Concerns
The takeout price has clearly deteriorated and now implies a total per share value in the $51 range versus AZEK currently trading at $49.02.

AZEK Company (AZEK) vs. SPDR S&P 500 ETF (SPY)

AZEK Company Business Overview & Revenue Model

Company DescriptionThe AZEK Company Inc. engages in designing, manufacturing, and selling building products for residential, commercial, and industrial markets in the United States. It operates through two segments: Residential and Commercial. The Residential segment designs and manufactures engineered outdoor living products, which includes decking, railing, trim and moulding, and accessories under the TimberTech, AZEK Exteriors, VERSATEX, and ULTRALOX brand name. Its Commercial segment manufactures engineered polymer materials that is used in various industries, which includes outdoor, graphic displays and signage, educational, and recreational markets, as well as the food processing and chemical industries. This segment also offers bathroom partitions, shower and dressing stalls, lockers, and other storage solutions under the Aria, Eclipse, Hiny Hiders, TuffTec, and Duralife brand name to schools, parks, stadium arenas, industrial plants, and retail, recreational, and commercial facilities. 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.
How the Company Makes MoneyAZEK generates revenue through the sale of its comprehensive range of building products, primarily focusing on decking, railing, trim, and other outdoor living solutions. The company's revenue streams are primarily driven by sales to distributors and dealers who then sell to end-users, including homeowners, contractors, and builders. AZEK's strategic partnerships with leading distributors and its extensive network of independent dealers play a significant role in its market reach and sales effectiveness. Additionally, the company capitalizes on trends towards sustainable building practices and outdoor living enhancements, which drive demand for its innovative and environmentally friendly products.

AZEK Company Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q2-2025)
|
% Change Since: 9.51%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong growth in the residential segment and positive feedback on new product launches, along with strategic initiatives like the merger with James Hardie. However, there were some concerns about macroeconomic uncertainty and challenges in the commercial segment.
Q2-2025 Updates
Positive Updates
Residential Segment Growth
Achieved 9% year-over-year growth in the residential segment, driven by mid-single-digit residential sell-through growth and new product launches.
Deck, Rail & Accessories Sales Increase
Deck, Rail & Accessories net sales grew 11% year-over-year, with each product line experiencing high single-digit to double-digit growth.
Adjusted EBITDA Margin Expansion
Expanded adjusted EBITDA margin by 40 basis points year-over-year to 27.5%, with a strong residential segment adjusted EBITDA growth of 11%.
Positive Outlook for New Products
Launched new products such as TimberTech Harvest+ decking and TimberTech Reliance Rail, receiving positive feedback and expanding shelf presence.
Merger with James Hardie
Proposed merger with James Hardie aims to unlock $125 million in cost synergies and $500 million in incremental sales synergies.
Recognition for Sustainability
Named to Barron's 100 Most Sustainable U.S. Companies list for the first time.
Negative Updates
Challenges in Commercial Segment
Commercial segment net sales decreased by 4% year-over-year, primarily due to weaker demand and increases in material input costs.
Macro Uncertainty Concerns
Customers and contractors expressed concerns about macroeconomic uncertainty potentially impacting future growth.
Tariff Impact
Tariffs on internationally sourced materials are expected to have a $4 million to $6 million impact, which the company aims to offset with pricing actions.
Company Guidance
During The AZEK Company's Q2 2025 earnings call, the company reported strong financial performance with several key metrics highlighted. The residential segment experienced a 9% year-over-year growth, contributing to a 13% growth in the first half of the fiscal year. Deck, Rail & Accessories net sales increased by 11% year-over-year, while Exteriors net sales grew by 2%. AZEK expanded its adjusted EBITDA margin by 40 basis points to 27.5% and achieved an 11% growth in residential segment adjusted EBITDA. The company is on track to achieve its fiscal 2025 guidance, which forecasts consolidated net sales between $1.52 billion and $1.55 billion, representing a 5% to 8% increase year-over-year. Additionally, AZEK reaffirmed its commitment to long-term growth with a focus on material conversion and sustainability, projecting sustained double-digit growth and margin expansion. The proposed merger with James Hardie is expected to unlock $125 million in cost synergies and $500 million in incremental sales synergies, enhancing AZEK's strategic position in the market.

AZEK Company Financial Statement Overview

Summary
AZEK Company exhibits a solid financial foundation with strong revenue growth, profitability, and efficient cash flow management. The balance sheet shows prudent leverage, and the company maintains a stable equity base. While there are some areas for potential improvement, such as ROE, AZEK's overall financial health is strong, supporting its growth trajectory in the construction industry.
Income Statement
85
Very Positive
AZEK Company's income statement shows a strong financial performance with consistent revenue growth over the years. The gross profit margin stands at 37.2% for TTM, indicating efficient cost management. The net profit margin has improved to 9.9% from previous years, showcasing enhanced profitability. However, the EBIT margin of 36.6% is skewed by high EBIT figures in TTM, warranting careful analysis. Overall, the company's income statement reflects robust growth and profitability trends.
Balance Sheet
78
Positive
The balance sheet indicates a stable financial position with a debt-to-equity ratio of 0.30, reflecting a conservative leverage strategy. The equity ratio of 63.2% emphasizes a strong equity base. However, the return on equity (ROE) is currently 10.4%, which suggests there is room for improvement in generating returns from shareholders' equity. Overall, AZEK's balance sheet is sound with manageable leverage and solid equity support.
Cash Flow
80
Positive
AZEK's cash flow statement is strong, with operating cash flow growing significantly to $316 million in TTM, indicating good cash generation from operations. The free cash flow growth rate is also positive, though it could be more robust. The operating cash flow to net income ratio is healthy at 2.1, demonstrating efficient conversion of income into cash. Overall, the cash flow performance is commendable, providing a solid liquidity position.
BreakdownTTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income Statement
Total Revenue1.52B1.44B1.37B1.36B1.18B899.26M
Gross Profit565.31M541.79M437.65M409.32M389.95M296.05M
EBITDA364.91M378.82M258.97M236.81M244.76M40.45M
Net Income150.88M153.38M62.36M67.16M88.86M-122.23M
Balance Sheet
Total Assets2.30B2.17B2.42B2.38B2.19B1.93B
Cash, Cash Equivalents and Short-Term Investments146.72M164.03M278.31M120.82M250.54M215.01M
Total Debt441.53M441.15M593.22M590.88M464.71M473.89M
Total Liabilities845.08M810.85M1.01B938.65M760.67M627.97M
Stockholders Equity1.45B1.36B1.41B1.44B1.43B1.30B
Cash Flow
Free Cash Flow207.93M147.33M274.00M-66.60M32.56M2.77M
Operating Cash Flow316.19M224.48M362.54M105.83M207.68M98.36M
Investing Cash Flow-131.89M49.14M-88.50M-280.18M-175.07M-113.79M
Financing Cash Flow-264.98M-387.91M-116.54M44.62M2.92M124.50M

AZEK Company Technical Analysis

Technical Analysis Sentiment
Positive
Last Price54.35
Price Trends
50DMA
50.92
Positive
100DMA
48.65
Positive
200DMA
48.20
Positive
Market Momentum
MACD
0.77
Negative
RSI
62.72
Neutral
STOCH
86.82
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AZEK, the sentiment is Positive. The current price of 54.35 is above the 20-day moving average (MA) of 52.89, above the 50-day MA of 50.92, and above the 200-day MA of 48.20, indicating a bullish trend. The MACD of 0.77 indicates Negative momentum. The RSI at 62.72 is Neutral, neither overbought nor oversold. The STOCH value of 86.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AZEK.

AZEK Company Risk Analysis

AZEK Company disclosed 40 risk factors in its most recent earnings report. AZEK Company 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

AZEK Company Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$7.82B52.6710.62%5.93%3.50%
SSSSD
77
Outperform
$6.88B21.4218.10%0.70%1.38%-3.80%
LPLPX
73
Outperform
$6.35B16.0424.41%1.21%8.09%55.08%
68
Neutral
$6.36B32.4323.07%-9.10%-21.50%
67
Neutral
$6.12B39.5519.85%0.53%8.24%-11.66%
65
Neutral
$10.69B15.755.51%1.90%2.72%-26.43%
63
Neutral
$6.53B15.9118.62%1.84%-3.48%4.55%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AZEK
AZEK Company
54.35
13.47
32.95%
AAON
Aaon
75.27
-11.44
-13.19%
FBIN
Fortune Brands Innovations
54.31
-7.40
-11.99%
LPX
Louisiana-Pacific
92.58
13.22
16.66%
SSD
Simpson Manufacturing Co
164.58
2.93
1.81%
TREX
Trex Company
59.29
-11.74
-16.53%

AZEK Company Corporate Events

Delistings and Listing ChangesM&A TransactionsStock Buyback
James Hardie Completes Acquisition of AZEK Company
Positive
Jul 1, 2025

On July 1, 2025, James Hardie Industries completed its acquisition of The AZEK Company, enhancing its position as a leading provider of exterior home and outdoor living solutions. This strategic move combines complementary offerings from both companies, significantly expanding James Hardie’s market reach and creating opportunities for commercial and cost synergies. As a result of the merger, AZEK’s stock ceased trading on the NYSE, and James Hardie’s ordinary shares are now listed on the NYSE. The merger is expected to accelerate revenue and EBITDA growth, drive robust cash flow, and support ongoing share repurchases.

The most recent analyst rating on (AZEK) stock is a Hold with a $44.00 price target. To see the full list of analyst forecasts on AZEK Company stock, see the AZEK Stock Forecast page.

M&A TransactionsShareholder Meetings
AZEK Company Stockholders Approve Merger with James Hardie
Positive
Jun 27, 2025

On June 27, 2025, AZEK Company Inc. held a special meeting where stockholders approved the proposed merger with James Hardie Industries plc. The merger, expected to close on July 1, 2025, will result in AZEK becoming an indirect wholly owned subsidiary of James Hardie. This strategic move is anticipated to enhance AZEK’s market position by combining resources with James Hardie, aiming to deliver greater value to customers through expanded offerings and innovation.

The most recent analyst rating on (AZEK) stock is a Buy with a $60.00 price target. To see the full list of analyst forecasts on AZEK Company stock, see the AZEK Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
AZEK Finalizes Sale of Scranton Products Business
Neutral
Jun 24, 2025

On June 20, 2025, The AZEK Company Inc. finalized the sale of its Commercial Segment’s Scranton Products business to Sky Island Capital. This strategic move is expected to impact AZEK’s operational focus, potentially strengthening its position in the residential building materials market.

The most recent analyst rating on (AZEK) stock is a Buy with a $60.00 price target. To see the full list of analyst forecasts on AZEK Company stock, see the AZEK Stock Forecast page.

M&A TransactionsLegal Proceedings
AZEK Company Faces Legal Challenges Over Merger
Negative
Jun 17, 2025

On March 23, 2025, AZEK Company Inc. entered into a merger agreement with James Hardie Industries, where AZEK will become an indirect wholly owned subsidiary of James Hardie. The merger has faced legal challenges from stockholders alleging disclosure deficiencies in the proxy statement, but AZEK has made voluntary supplemental disclosures to mitigate delays and expenses, while denying any wrongdoing.

The most recent analyst rating on (AZEK) stock is a Buy with a $60.00 price target. To see the full list of analyst forecasts on AZEK Company stock, see the AZEK Stock Forecast page.

Executive/Board ChangesM&A Transactions
AZEK Company Amends Executive Severance Plan Post-Merger
Neutral
Jun 6, 2025

On June 3, 2025, The AZEK Company Inc. announced amendments to its Executive Severance Plan following a merger agreement with James Hardie Industries. These amendments provide enhanced benefits for executives in the event of a qualifying termination within 24 months of a change in control, including full or pro-rata annual cash incentives and accelerated vesting of equity awards.

The most recent analyst rating on (AZEK) stock is a Buy with a $57.00 price target. To see the full list of analyst forecasts on AZEK Company stock, see the AZEK Stock Forecast page.

M&A Transactions
AZEK Company Merger with James Hardie Approved
Neutral
Jun 3, 2025

On March 23, 2025, AZEK Company Inc. entered into a merger agreement with James Hardie Industries, with the merger set to make AZEK a wholly owned subsidiary of James Hardie. The merger’s completion was contingent upon the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, which expired on June 2, 2025, allowing the merger to proceed.

The most recent analyst rating on (AZEK) stock is a Buy with a $60.00 price target. To see the full list of analyst forecasts on AZEK Company stock, see the AZEK Stock Forecast page.

Executive/Board ChangesM&A Transactions
AZEK Company Amends Merger Agreement with James Hardie
Neutral
May 5, 2025

On May 4, 2025, The AZEK Company Inc. amended its merger agreement with James Hardie Industries plc, impacting the treatment of company stock options. The amendment specifies that stock options held by former employees and non-employee board members, except certain designees, will be canceled for cash, while others will be converted to options for JHX shares. Additionally, on May 2, 2025, the company’s board approved cash retention awards for key executives, vesting upon the merger’s closing and six months thereafter, ensuring leadership stability during the transition.

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: Jul 02, 2025