Core & Main (CNM) AI Stock Analysis

• Market Cap: $12.75B
• Dividend Yield: N/A
• Average Volume (3M): 1.72M
• Price to Earnings (P/E): 29.9
• Beta (1Y): 1.43
• Revenue Growth: 10.80%
• EPS Growth: 0.98%
• Country: US
• Employees: 5,700
• Sector: Industrials
• Sector Strength: 73
• Industry: Industrial - Distribution
• EPS (TTM): 0.52
• Shares Outstanding: 189,654,480
• 10 Day Avg. Volume: 1,493,152
• 30 Day Avg. Volume: 1,715,012
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 1.75
• Enterprise Value/Gross Profit: 6.58
• Enterprise Value/Ebitda: 14.49
• 1Y Price Target: $64.22
• Price Target Upside: -2.48% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 76 Outperform
• Price Target: $73.00 ▲(10.86% Upside)

Core & Main's strong financial performance and positive technical indicators are the primary drivers of its stock score. The company's robust growth and operational efficiency are offset by valuation concerns and uncertainties highlighted in the earnings call. The absence of corporate events and dividend yield also impacts the overall score.

Positive Factors

Growth Opportunities

Management noted that funding from the Infrastructure Investment and Jobs Act (IIJA) continues to generate new opportunities for growth.

Organic Sales Growth

Organic sales growth was driven by volume, indicating an acceleration in growth on a two-year basis.

Sales Growth

CNM reported a net sales growth of 9.8%, exceeding both Wells Fargo's and the Street's estimates.

Negative Factors

Commodity Pricing

Pricing for plastic, iron, and steel pipes declined, which could put further downward pressure on CNM's gross margin.

Margins

Gross margins in 1Q were down 20bps y/y and adj. EBITDA margins were down 70bps y/y.

SG&A Expenses

SG&A expenses increased by 14% year-over-year, which was seen as disappointing.

Core & Main Business Overview & Revenue Model

Company Description

Core & 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 Money

Core & Main generates revenue primarily through the sale and distribution of a wide array of products essential for waterworks and fire protection projects. The company's key revenue streams include sales to municipalities, utility companies, and contractors, who rely on Core & Main for the supply of critical infrastructure components such as pipes, valves, and hydrants. Additionally, the company offers value-added services, including product training, design assistance, and inventory management, which enhance customer relationships and drive repeat business. Strategic partnerships with leading manufacturers enable Core & Main to maintain a robust product offering and competitive pricing, further contributing to its revenue growth.

Core & Main Financial Statement Overview

Summary

Core & Main exhibits strong financial performance with consistent revenue and profit growth, efficient operations, and solid cash flow generation. The company's leverage is moderate, and it maintains healthy profitability ratios. The income statement, balance sheet, and cash flow metrics are robust, but there is room for improving equity levels.

Income Statement

Core & Main has demonstrated robust growth in its revenue and profitability. The Gross Profit Margin for TTM (Trailing-Twelve-Months) is 26.57%, and the Net Profit Margin is 5.47%. The Revenue Growth Rate from the previous annual report to the current TTM is 2.28%, indicating consistent growth. The EBIT Margin is at 9.49%, and the EBITDA Margin is 12.06%, showing strong operational efficiency.

Balance Sheet

The company maintains a moderate Debt-to-Equity Ratio at 1.45, indicating a balanced approach to leverage. The Return on Equity (ROE) is 23.85%, which is quite robust, reflecting good profitability relative to shareholder equity. The Equity Ratio stands at 27.78%, which suggests a healthy proportion of equity financing, though there's room for improvement in enhancing equity levels.

Cash Flow

Core & Main has shown strong cash flow generation, with a Free Cash Flow to Net Income Ratio of 1.39 and an Operating Cash Flow to Net Income Ratio of 1.49, indicating significant cash flow relative to net income. The Free Cash Flow Growth Rate is -1.19%, reflecting a slight decline, but the overall cash flow generation remains strong.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.44B	6.70B	6.65B	5.00B	3.64B
Gross Profit	1.98B	1.82B	1.79B	1.28B	878.00M
EBITDA	913.00M	894.00M	924.00M	524.00M	338.00M
Net Income	411.00M	371.00M	366.00M	166.00M	37.00M
Balance Sheet
Total Assets	5.87B	5.07B	4.91B	4.43B	3.59B
Cash, Cash Equivalents and Short-Term Investments	8.00M	1.00M	177.00M	1.00M	380.90M
Total Debt	2.51B	2.07B	1.63B	1.62B	2.39B
Total Liabilities	4.10B	3.54B	2.50B	2.60B	2.92B
Stockholders Equity	1.70B	1.45B	1.75B	1.32B	801.00M
Cash Flow
Free Cash Flow	586.00M	1.03B	376.00M	-51.00M	202.00M
Operating Cash Flow	621.00M	1.07B	401.00M	-31.00M	214.00M
Investing Cash Flow	-788.00M	-270.00M	-152.00M	-203.00M	-228.90M
Financing Cash Flow	174.00M	-975.00M	-73.00M	-146.00M	215.00M

Core & Main Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 65.85
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 65.85 is above the 20-day moving average (MA) of 64.75, above the 50-day MA of 63.45, and above the 200-day MA of 54.76, indicating a bullish trend. The MACD of 0.53 indicates Positive momentum. The RSI at 58.93 is Neutral, neither overbought nor oversold. The STOCH value of 67.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CNM.

Core & Main Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AIT	79 Outperform	$9.93B	25.99	22.24%	0.65%	1.88%	2.91%
WCC	78 Outperform	$10.63B	17.06	13.78%	0.79%	1.30%	-1.09%
CNM	76 Outperform	$12.75B	29.93	25.11%	―	10.80%	0.98%
MSM	75 Outperform	$4.97B	25.17	14.34%	3.77%	-4.11%	-31.26%
GWW	75 Outperform	$48.64B	25.66	55.30%	0.85%	4.35%	7.84%
Sector *	64 Neutral	$10.73B	15.65	7.61%	2.01%	2.80%	-14.92%
FERG	―	£33.71B	27.25	29.28%	1.30%	―	―

Core & Main Corporate Events

Core & Main Holds Annual Shareholder Meeting

Core & Main, Inc. held its annual meeting of shareholders on June 24, 2025, where key proposals were voted on. Three individuals were elected as Class I directors to serve until the 2028 annual meeting, and the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm was ratified. Additionally, shareholders approved the compensation for the company’s named executive officers for the fiscal year ended February 2, 2025.