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Core & Main (CNM)
NYSE:CNM
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Core & Main
(NYSE:CNM)
78Outperform
Positive Factors
Growth outlook
The early '25 outlook is promising, with potential for share gains and stable pricing.
Shareholder returns
The company has demonstrated commitment to shareholder returns with a $100 million share repurchase in Q3.
Volume and margin recovery
Core & Main, Inc. has shown a positive volume inflection in Q3, indicating a recovery and firming end markets.
Negative Factors
Margin performance
Gross margins in 4Q were down 10bps, EBITDA margins were down 60bps, and pricing was negative.
Material pricing pressure
Pricing for plastic, iron, and steel pipes declined, which could put further downward pressure on CNM's gross margin.
Price objective
The price objective is set at 40.00 USD, which is below the current price of 49.52 USD.
Core & Main (CNM) vs. S&P 500 (SPY)
Market Cap
$9.56B
Dividend YieldN/A
Average Volume (3M)2.20M
Price to Earnings (P/E)22.7
Beta (1Y)1.74
Revenue Growth11.03%
EPS Growth-0.85%
CountryUS
Employees5,700
SectorIndustrials
Sector Strength66
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)2.13
Shares Outstanding190,058,500
10 Day Avg. Volume2,740,483
30 Day Avg. Volume2,204,703
Financial Highlights & Ratios
PEG Ratio18.65
Price to Book (P/B)N/A
Price to Sales (P/S)1.34
Price to Cash Flow (P/CF)N/A
P/FCF Ratio93.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$58.55Price Target Upside21.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Core & Main Business Overview & Revenue Model
Company DescriptionCore & Main, Inc. distributes water, wastewater, storm drainage, and fire protection products and related services to municipalities, private water companies, and professional contractors in the municipal, non-residential, and residential end markets in the United States. Its products include pipes, valves, hydrants, fittings, and other products and services; storm drainage products, such as corrugated piping systems, retention basins, inline drains, manholes, grates, geosynthetics, and other related products; fire protection products, including fire protection pipes, sprinkler heads and other devices, fire suppression systems, and related accessories, as well as fabrication services; and meter products, such as smart meter products, installation, software and other services. The company's specialty products and services are used in the maintenance, repair, replacement, and construction of water and fire protection infrastructure. Core & Main, Inc. was founded in 1874 and is headquartered in St. Louis, Missouri.
How the Company Makes MoneyCore & Main generates revenue primarily through the sale and distribution of water, wastewater, storm drainage, and fire protection products. The company's key revenue streams include direct sales to municipal water utilities, private water companies, and professional contractors engaged in construction and maintenance of water and wastewater infrastructure. Core & Main benefits from its extensive network of distribution centers and a diverse supplier base, enabling it to offer a broad product portfolio and maintain strong relationships with manufacturers. Additionally, the company leverages its technical expertise and service capabilities to provide value-added solutions, such as product training and design support, further enhancing its revenue potential. Significant partnerships with manufacturers and its strategic presence in key geographic markets also contribute to Core & Main's financial performance.
Core & Main Financial Statement Overview
Summary
Core & Main displays strong financial performance with consistent revenue growth and solid profitability metrics. Although the company's net profit margin is moderate, it maintains a robust balance sheet with manageable leverage and effective cash flow generation. The potential for further profitability improvements is present.Income Statement
Core & Main has demonstrated consistent revenue growth, highlighted by a 10.99% increase in the latest annual period. The gross profit margin remains strong at 26.6%, supported by steady EBIT and EBITDA margins of 9.66% and 11.81%, respectively. However, the net profit margin is moderate at 5.52%, indicating room for improvement in net profitability.85
Very Positive
Balance Sheet
The company maintains a solid equity base with a debt-to-equity ratio of 1.48, suggesting a balanced leverage approach. The equity ratio stands at 28.92%, reflecting a good proportion of equity financing in its asset structure. Return on equity is robust at 24.21%, underscoring effective use of shareholders' capital, though the total debt level requires monitoring.78
Positive
Cash Flow
Core & Main's cash flow generation is strong, with a substantial free cash flow that aligns closely with net income, yielding a free cash flow to net income ratio of 1.43. The operating cash flow to net income ratio is also healthy at 1.51, indicating efficient cash generation relative to earnings. The company has shown a focus on maintaining positive cash flow, although the recent year-over-year decline in operating cash flow warrants attention.82
Very Positive
| Breakdown | ||||
| Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.44B | 6.70B | 6.65B | 5.00B | 3.64B | Gross Profit |
| 1.98B | 1.82B | 1.79B | 1.28B | 878.40M | EBIT |
| 719.00M | 740.00M | 775.00M | 425.00M | 185.50M | EBITDA |
| 913.00M | 894.00M | 924.00M | 511.00M | 319.00M | Net Income Common Stockholders |
| 411.00M | 371.00M | 581.00M | 225.00M | 37.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 8.00M | 1.00M | 177.00M | 1.00M | 380.90M | Total Assets |
| 5.87B | 5.07B | 4.91B | 4.43B | 3.59B | Total Debt |
| 2.51B | 2.07B | 1.63B | 1.62B | 2.39B | Net Debt |
| 2.50B | 2.07B | 1.46B | 1.62B | 2.01B | Total Liabilities |
| 4.10B | 3.54B | 2.50B | 2.60B | 2.92B | Stockholders Equity |
| 1.70B | 1.45B | 1.75B | 1.32B | 673.90M |
| Cash Flow | Free Cash Flow | |||
| 586.00M | 1.03B | 376.00M | -51.00M | 207.90M | Operating Cash Flow |
| 621.00M | 1.07B | 401.00M | -31.00M | 219.80M | Investing Cash Flow |
| -788.00M | -270.00M | -152.00M | -203.00M | -228.90M | Financing Cash Flow |
| 174.00M | -975.00M | -73.00M | -146.00M | 209.10M |
Core & Main Technical Analysis
Positive
48.31
Price Trends
51.63
Negative
50.61
Negative
48.96
Positive
Market Momentum
-0.44
Negative
50.05
Neutral
36.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNM, the sentiment is Positive. The current price of 48.31 is above the 20-day moving average (MA) of 48.21, below the 50-day MA of 51.63, and below the 200-day MA of 48.96, indicating a neutral trend. The MACD of -0.44 indicates Negative momentum. The RSI at 50.05 is Neutral, neither overbought nor oversold. The STOCH value of 36.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CNM.
Core & Main Risk Analysis
Core & Main disclosed 50 risk factors in its most recent earnings report. Core & Main 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
Core & Main 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 | $9.56B | 22.71 | 26.10% | ― | 11.03% | -0.85% | |
78 Outperform | $20.54B | 38.22 | 20.39% | 2.12% | 4.59% | -2.05% | |
77 Outperform | $44.47B | 38.71 | 33.04% | 2.06% | 2.71% | -0.63% | |
65 Neutral | $2.81B | 20.27 | 10.37% | ― | 3.71% | -49.38% | |
64 Neutral | $731.30M | 37.86 | -1.00% | 3.27% | -9.98% | -106.51% | |
63 Neutral | $11.85B | 27.86 | 33.41% | 1.48% | -4.16% | -15.44% | |
62 Neutral | $8.07B | 13.60 | 3.76% | 3.13% | 3.60% | -14.67% |
* Industrials Sector Average
Performance Comparison
CNM
Core & Main
49.38
-8.39
-14.52%
FAST
Fastenal Company
77.61
3.00
4.02%
POOL
Pool
318.13
-68.28
-17.67%
WSO
Watsco
511.65
93.98
22.50%
RYI
Ryerson Holdings
22.67
-9.13
-28.71%
GMS
GMS
73.74
-23.61
-24.25%
Core & Main Earnings Call Summary
Earnings Call Date: Mar 25, 2025 | % Change Since: -2.68% | Next Earnings Date: Jun 10, 2025
Earnings Call Sentiment Positive
Core & Main experienced a strong fiscal 2024 with record sales and successful strategic initiatives, such as M&A activities and market share gains, despite some challenges in gross margin and interest expenses. The planned executive transition is positive for continuity, and the municipal market remains a solid foundation for growth.Highlights
Record Net Sales and Growth
Core & Main achieved record net sales of over $7.4 billion in fiscal 2024, marking the 15th consecutive year of positive sales growth with an 18% increase in Q4 sales.
Strong Cash Flow and Share Repurchase
The company generated over $620 million in operating cash flow and repurchased 4 million shares, returning $176 million to shareholders.
Successful M&A Strategy
Core & Main completed over 40 acquisitions since 2017, adding over $600 million in annual sales in 2024 alone, with a healthy pipeline of potential deals for 2025.
Municipal Market Strength
Municipal spending on water infrastructure remains resilient, driven by necessary investments, with projected low single-digit growth for 2025.
Executive Transition and Leadership Continuity
CEO Steve LeClair announced a planned transition, with Mark Witkowski becoming CEO and Robyn Bradbury as CFO, ensuring leadership continuity.
Lowlights
Slight Decline in Gross Margin
Gross margin for fiscal 2024 decreased by 50 basis points to 26.6% due to a higher average cost of inventory compared to the previous year.
Interest Expense Increase
Interest expense for fiscal 2024 rose to $142 million from $81 million the prior year due to higher average borrowings.
Uncertainty in Pricing and Tariffs
Tariffs create uncertainty that could limit end market growth, although they are expected to be neutral to slightly positive for pricing and gross margins.
Company Guidance
During the Core & Main Q4 2024 earnings call, the company provided several key metrics and guidance for fiscal 2025. The company reported an 18% increase in net sales for the fourth quarter, reaching nearly $1.7 billion, and a record $7.4 billion in net sales for fiscal 2024, marking their 15th consecutive year of sales growth. Adjusted EBITDA for the fourth quarter was $179 million, with a margin of 10.5%, while full-year adjusted EBITDA was $930 million with a margin of 12.5%. For fiscal 2025, Core & Main expects net sales to range from $7.6 billion to $7.8 billion, reflecting growth of 2% to 5%, or 4% to 7% on an average daily sales basis. They anticipate adjusted EBITDA of $950 million to $1 billion, implying a growth of 2% to 8%, or 4% to 10% on an average daily sales basis, with margins ranging from 12.5% to 12.8%. The company also highlighted its plan to drive gross margin expansion through private label, sourcing optimization, and pricing initiatives, maintaining a balanced exposure across various markets, and continuing its acquisition strategy, having completed over 40 acquisitions since 2017.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.