tiprankstipranks
Trending News
More News >
Azz Inc. (AZZ)
NYSE:AZZ
Advertisement

AZZ (AZZ) AI Stock Analysis

Compare
253 Followers

Top Page

AZ

AZZ

(NYSE:AZZ)

Rating:81Outperform
Price Target:
$126.00
▲(12.60%Upside)
AZZ's strong financial performance and strategic initiatives, including effective debt management and dividend increases, are key strengths. While the technical indicators suggest potential overbought conditions, the company's valuation remains attractive, supporting a positive outlook. The earnings call and corporate events further bolster confidence in AZZ's growth trajectory.
Positive Factors
Financial Performance
Steady organic growth, operational efficiencies, and expanding free cash flow drive a Buy rating with a price target of $108.
Market Position
AZZ is the US leader in galvanizing and coating with significant market shares, providing opportunities for continued expansion.
Negative Factors
Market Uncertainty
Private sector project spending has reverted lower in recent months given heightened levels of market uncertainty.
Volume Growth
The 2FQ deceleration in volume growth is a partial offset to the margin gains given some concern over the sustainability of the elevated profitability profile.

AZZ (AZZ) vs. SPDR S&P 500 ETF (SPY)

AZZ Business Overview & Revenue Model

Company DescriptionAZZ Inc. offers galvanizing and metal coating solutions, welding solutions, specialty electrical equipment, and engineered services to the power generation, transmission, distribution, refining, and industrial markets in the United States and internationally. The company operates through two segments, Infrastructure Solutions and Metal Coatings. The Metal Coatings segment offers metal finishing solutions for corrosion protection, including hot-dip galvanizing, spin galvanizing, powder coating, anodizing, and plating to the steel fabrication and other industries. It serves fabricators or manufacturers that provide services to the electrical and telecommunications, bridge and highway, petrochemical, and general industrial markets, as well as original equipment manufacturers. The Infrastructure Solutions segment provides products and services to support industrial and electrical applications. It offers custom switchgear, electrical enclosures, medium and high voltage bus ducts, explosion proof and hazardous duty lighting, and tubular products, as well as solutions and engineering resources to multi-national companies. This segment sells its products through internal sales force, manufacturers' representatives, distributors, and agents. The company was incorporated in 1956 and is headquartered in Fort Worth, Texas.
How the Company Makes MoneyAZZ Inc. generates revenue through its two main business segments. In the Metal Coatings segment, the company earns money by providing galvanizing services that protect metal products from corrosion, extending their lifespan and adding value for customers in steel fabrication and related industries. The Infrastructure Solutions segment contributes to revenue by offering a variety of engineered products and services, including switchgear, bus systems, and specialty electrical equipment, which are essential for power generation and distribution. Key revenue streams include sales of these products, as well as associated services and maintenance. Significant partnerships with industrial and utility companies further enhance AZZ's market reach and revenue potential.

AZZ Earnings Call Summary

Earnings Call Date:Jul 09, 2025
(Q1-2026)
|
% Change Since: 11.09%|
Next Earnings Date:Oct 14, 2025
Earnings Call Sentiment Positive
The earnings call presented a mix of strong financial performance, strategic acquisitions, and effective debt reduction, contrasted by challenges in sales for Precoat Metals due to external factors such as tariffs and inventory issues.
Q1-2026 Updates
Positive Updates
Record High Sales and Adjusted EBITDA
AZZ reported record high sales, adjusted EBITDA, and EPS for the quarter ended May 31, 2025, with adjusted EBITDA margins of 32.9% for Metal Coatings and 20.7% for Precoat Metals.
Successful Monetization of Avail Joint Venture
AZZ monetized nearly all of the electrical product businesses within the Avail joint venture, receiving $273 million in cash, and recorded $165.8 million on the income statement as positive equity and earnings.
Acquisition of Canton Galvanizing
AZZ announced the acquisition of Canton Galvanizing in Canton, Ohio, which is immediately accretive and further scales the galvanizing business with predictable synergies.
Debt Reduction and Improved Leverage Ratio
AZZ paid down $285.4 million of debt in the quarter, improving the credit agreement net leverage ratio to 1.7 times from 2.8 times in the prior year.
Dividend Increase
The board approved an increase to the quarterly cash dividend from $0.17 per share to $0.20 per share, representing a 17.6% increase.
Negative Updates
Precoat Metals Sales Decline
Precoat Metals sales were down slightly versus the prior year due to lower demand, though the segment outperformed the market when compared to the National Coil Coaters Association.
Restructuring Charge for Metal Coatings
A $3.8 million restructuring charge was incurred related to the disposition of a small powder coating facility and a small plating facility in the Metal Coatings segment.
Impact of Tariff and Inventory Challenges
Sales from Precoat Metals declined 0.8% as customers navigated through inventory challenges associated with tariff concerns.
Company Guidance
In the first quarter of fiscal 2026, AZZ reported record high sales of $422 million, up 2.1% from the prior year, with the Metal Coatings segment driving a 6% increase. The company achieved consolidated adjusted EBITDA of over $106 million, representing a margin of 25.2%. Metal Coatings and Precoat Metals posted industry-leading adjusted EBITDA margins of 32.9% and 20.7%, respectively. AZZ's first quarter saw a significant cash influx of $273 million from monetizing a portion of its Avail joint venture, which contributed to a noteworthy debt reduction of $285.4 million. The quarter's adjusted diluted EPS rose by 22.2% to $1.78, and the company raised its quarterly cash dividend by 17.6%. Sales guidance for fiscal 2026 remains at $1.625 billion to $1.725 billion, with adjusted EBITDA expected between $360 million and $400 million.

AZZ Financial Statement Overview

Summary
AZZ exhibits strong financial performance with significant revenue growth, improved profitability, and robust cash flow metrics. The debt-to-equity ratio has improved dramatically, but historical high leverage is a potential risk.
Income Statement
85
Very Positive
AZZ has demonstrated strong revenue growth with a significant increase from $902.7M in 2022 to $1,586.5M TTM. The gross profit margin improved to approximately 24.2%, indicating solid profitability. Net profit margin also increased to 16.4% TTM, showcasing effective cost management. The EBIT and EBITDA margins are robust at 14.9% and 19.5% respectively, highlighting operational efficiency.
Balance Sheet
78
Positive
The company's debt-to-equity ratio has improved significantly, declining from 1.73 in 2023 to a more manageable 0.02 TTM, primarily due to debt reduction. The return on equity is impressive at 21.4% TTM, reflecting strong profitability relative to shareholder investment. The equity ratio is healthy at 56.3%, indicating a strong equity base. However, the previous high leverage poses a potential risk.
Cash Flow
82
Very Positive
AZZ's free cash flow has shown remarkable growth, increasing to $383.4M TTM. The operating cash flow to net income ratio is exceptionally high at 1.89, indicating strong cash generation from operations. The free cash flow to net income ratio of 1.47 further supports the company's ability to generate cash beyond its net income, enhancing financial flexibility.
BreakdownMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue1.58B1.54B1.32B902.66M838.92M
Gross Profit382.68M363.46M295.94M225.22M188.75M
EBITDA334.17M316.59M252.06M111.47M105.25M
Net Income128.83M101.61M66.34M84.02M39.61M
Balance Sheet
Total Assets2.23B2.20B2.22B1.13B996.44M
Cash, Cash Equivalents and Short-Term Investments1.49M4.35M2.82M15.08M14.84M
Total Debt879.13M977.23M1.06B233.80M178.42M
Total Liabilities1.18B1.26B1.37B465.66M373.15M
Stockholders Equity1.05B934.49M853.46M667.37M623.29M
Cash Flow
Free Cash Flow134.03M149.35M34.31M57.60M54.96M
Operating Cash Flow249.91M244.47M91.43M86.01M92.03M
Investing Cash Flow-115.00M-95.06M-1.23B-86.83M-28.59M
Financing Cash Flow-138.69M-147.89M1.03B912.00K-88.42M

AZZ Technical Analysis

Technical Analysis Sentiment
Positive
Last Price111.90
Price Trends
50DMA
94.20
Positive
100DMA
89.90
Positive
200DMA
87.88
Positive
Market Momentum
MACD
4.79
Negative
RSI
81.91
Negative
STOCH
73.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AZZ, the sentiment is Positive. The current price of 111.9 is above the 20-day moving average (MA) of 98.47, above the 50-day MA of 94.20, and above the 200-day MA of 87.88, indicating a bullish trend. The MACD of 4.79 indicates Negative momentum. The RSI at 81.91 is Negative, neither overbought nor oversold. The STOCH value of 73.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AZZ.

AZZ Risk Analysis

AZZ disclosed 38 risk factors in its most recent earnings report. AZZ 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

AZZ Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
AZAZZ
81
Outperform
$3.19B12.3323.85%0.73%1.70%684.20%
76
Outperform
$409.94M12.559.13%8.06%38.46%
WOWOR
74
Outperform
$3.13B32.7110.52%1.08%-60.43%-14.19%
MEMEC
73
Outperform
$329.42M14.589.40%-8.42%164.82%
72
Outperform
$749.09M33.468.87%0.31%-0.33%-7.06%
67
Neutral
$2.58B13.039.94%4.07%-2.21%31.02%
RYRYI
58
Neutral
$727.63M37.86-0.78%3.32%-9.04%-108.47%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AZZ
AZZ
109.69
26.57
31.97%
IIIN
Insteel Industries
36.08
4.91
15.75%
NWPX
Northwest Pipe Company
41.28
5.00
13.78%
WOR
Worthington Industries
62.85
15.11
31.65%
RYI
Ryerson Holdings
23.01
-0.15
-0.65%
MEC
Mayville Engineering Company
15.84
-2.79
-14.98%

AZZ Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
AZZ Secures $150 Million Securitization Facility
Positive
Jul 16, 2025

On July 10, 2025, AZZ Inc. and its subsidiaries entered into a three-year $150 million accounts receivable securitization facility with Wells Fargo Bank. This facility allows AZZ SPE-1 LLC, a special purpose subsidiary, to draw up to $150 million in revolving loans, aimed at reducing interest costs by paying down existing debt. The securitization facility, which includes various agreements and covenants, is designed to enhance AZZ’s financial flexibility and operational efficiency by securing lower interest rates and providing structured financing options.

The most recent analyst rating on (AZZ) stock is a Buy with a $101.00 price target. To see the full list of analyst forecasts on AZZ stock, see the AZZ Stock Forecast page.

M&A TransactionsDividendsBusiness Operations and Strategy
AZZ Releases Investor Presentation Highlighting Growth Strategy
Positive
Jul 11, 2025

On July 10, 2025, AZZ Inc. announced the release of presentation materials intended for investors and stakeholders, highlighting its strategic focus on growth and sustainability. The company aims to reduce debt, improve leverage, and support high return on invested capital (ROIC) investments while maintaining a commitment to environmental, social, and governance (ESG) initiatives. Recent achievements include a reduction in net leverage, an increase in dividends, and the acquisition of Canton Galvanizing, reflecting AZZ’s robust growth strategy and commitment to shareholder value.

The most recent analyst rating on (AZZ) stock is a Buy with a $101.00 price target. To see the full list of analyst forecasts on AZZ stock, see the AZZ Stock Forecast page.

Executive/Board ChangesShareholder Meetings
AZZ Shareholders Approve Key Proposals at Annual Meeting
Positive
Jul 8, 2025

On July 8, 2025, AZZ Inc. held its annual meeting of shareholders where three proposals were approved. These included the election of seven directors for a one-year term, approval of the executive compensation program, and ratification of Grant Thornton LLP as the independent registered public accounting firm for the fiscal year ending February 28, 2026. The approval of these proposals reflects shareholder support for the company’s leadership and financial oversight, potentially impacting its governance and operational strategies.

The most recent analyst rating on (AZZ) stock is a Buy with a $101.00 price target. To see the full list of analyst forecasts on AZZ stock, see the AZZ Stock Forecast page.

Dividends
AZZ Increases Dividend by 17.6% for Q1 2026
Positive
Jun 26, 2025

On June 26, 2025, AZZ Inc. announced a 17.6% increase in its fiscal year 2026 first quarter cash dividend, raising it from $0.17 to $0.20 per share, payable on July 31, 2025. This decision reflects AZZ’s commitment to enhancing shareholder value while considering factors like operating results and financial condition.

The most recent analyst rating on (AZZ) stock is a Buy with a $101.00 price target. To see the full list of analyst forecasts on AZZ stock, see the AZZ Stock Forecast page.

Business Operations and Strategy
AZZ Prepares Strategic Presentation for Stakeholders
Positive
Apr 25, 2025

On April 25, 2025, AZZ Inc. announced the preparation of presentation materials intended for use in discussions with various stakeholders, including investors and employees. These materials highlight AZZ’s strategic focus on reducing debt, improving leverage, and supporting high return on investment capital. The company has made significant strides in reducing its net leverage to 2.5x as of February 28, 2025, and plans to continue focusing on operational excellence and sustainability initiatives to drive long-term growth and shareholder value.

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 17, 2025