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Griffon Corp. (GFF)
NYSE:GFF
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Griffon
(NYSE:GFF)
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Rating:62Neutral
Price Target:
$90.00
â–²(6.22% Upside)
The score is driven primarily by mixed financial performance (strong cash flow and gross margin but pressured net profitability and elevated leverage). Technicals are supportive with a clear uptrend and positive momentum indicators. These positives are tempered by a notably expensive valuation (very high P/E and modest yield), while the earnings call adds a moderate positive bias via maintained guidance, cash generation, and improving leverage amid ongoing volume/cost and execution risks.
Positive Factors
Free cash flow strength
Sustained and growing free cash flow provides durable internal financing for debt reduction, buybacks, dividends and capex. A positive operating cash flow to net income ratio (~1.07) and FCF growth underpin financial flexibility and resilience through cyclical demand swings.
High gross margins / pricing power
Elevated gross margins reflect strong cost management and pricing power in home and building products, supporting margin resilience even amid volume softness. High gross margins provide a buffer to absorb material and labor inflation and fund investments or restructuring over the medium term.
Strategic JV unlocks cash and retained upside
The AMES JV monetizes underperforming businesses, delivers immediate liquidity to reduce leverage or return capital, and preserves long-term upside via a 43% equity stake. This structural portfolio action rebalances the company toward higher‑margin continuing operations.
Negative Factors
High financial leverage
Material leverage (net debt ~$1.26B; net debt/EBITDA ~2.3x) constrains strategic flexibility and increases vulnerability to demand shocks and rising rates. Elevated leverage raises interest and covenant risks and limits the pace of buybacks or M&A without further deleveraging.
Declining net profitability
A sharp fall in net margin erodes retained earnings and reduces the company’s ability to self-fund capital needs. Even with strong gross margins, compressed net profitability signals higher operating costs, interest burden or one-time items that can persistently weigh on return on equity.
Execution and portfolio divestiture risks
Multiple simultaneous actions (JV close, AMES Australia/UK reviews, segment consolidations) create execution and timing risk. Realizing proceeds, integrating changes or disposing loss‑making U.K. assets may take months and could produce transitional costs or limited near‑term earnings relief.
Griffon (GFF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.95B
Dividend Yield1.01%
Average Volume (3M)204.22K
Price to Earnings (P/E)92.3
Beta (1Y)1.02
Revenue Growth-3.95%
EPS Growth-74.65%
CountryUS
Employees5,300
SectorIndustrials
Sector Strength72
IndustryConglomerates
Share Statistics
EPS (TTM)1.45
Shares Outstanding46,573,420
10 Day Avg. Volume254,667
30 Day Avg. Volume204,217
Financial Highlights & Ratios
PEG Ratio-0.91
Price to Book (P/B)46.69
Price to Sales (P/S)1.37
P/FCF Ratio11.38
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue1.70
Enterprise Value/Gross Profit4.04
Enterprise Value/Ebitda14.85
Forecast
1Y Price Target
$92.00Price Target Upside8.58% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Griffon Business Overview & Revenue Model
Company DescriptionGriffon Corporation, through its subsidiaries, provides consumer and professional, and home and building products in the United States, Europe, Canada, Australia, and internationally. Its Consumer and Professional Products segment manufactures and markets long-handled tools and landscaping products for homeowners and professionals; wood and wire closet organization, general living storage, and wire garage storage products to home center retail chains, mass merchandisers, and direct-to builder professional installers; wheelbarrows and lawn carts; snow, striking, and hand tools; planters and lawn accessories; garden hoses; and pruners, loppers, shears, and other tools, as well as cleaning products for professional, home, and industrial use. The company's Home & Building Products segment manufactures and markets residential and commercial garage doors for professional dealers and various home center retail chains; and rolling steel door and grille products for commercial, industrial, institutional, and retail uses. It sells its products under the True Temper, AMES, ClosetMaid, Clopay, Ideal, Holmes, CornellCookson, Garant, Harper, UnionTools, Westmix, Cyclone, Southern Patio, Northcote Pottery, Nylex, Hills, Kelkay, Tuscan Path, La Hacienda, Kelso, Dynamic Design, Apta, Quatro Design, Razor-Back, Jackson, Darby, Trojan, Supercraft, NeverLeak, Maximum Load, SuperSlide, ShelfTrack, MasterSuite, Suite Symphony, ExpressShelf, Style+, and SpaceCreations brand names. The company was formerly known as Instrument Systems Corporation and changed its name to Griffon Corporation in June 1992. Griffon Corporation was founded in 1959 and is headquartered in New York, New York.
How the Company Makes MoneyGriffon generates revenue through multiple key streams, predominantly from its subsidiaries in the home and building products sector, which includes the manufacturing and sale of branded products such as residential and commercial hardware, building materials, and related services. Additionally, the company earns revenue from its defense segment, which involves providing specialized products and services to government and military clients. The revenue model is bolstered by strategic partnerships with distributors and retailers, enhancing market reach and customer access. Furthermore, ongoing investments in product innovation and operational efficiencies contribute to profitability, allowing Griffon to capture market share and respond effectively to changing consumer demands.
Griffon Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q1-2026)
| Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call highlights solid cash generation ($99M FCF), measured revenue growth (+3%), improved CPP profitability (+19% EBITDA) and a strategic transaction (JV with ONCAP) that delivers immediate proceeds ($100M) and potential long-term value while preserving a material equity stake. The company also returned capital via buybacks and sustained dividend growth and improved leverage (net debt/EBITDA 2.3x). Offsetting these positives are volume softness in residential markets (-4%), margin pressure from material and labor costs, a GAAP net income decline (~10%), the AMES U.K. negative EBITDA, and execution/timing risks tied to the portfolio actions and a 10% PIK second-lien position. Overall the positives (strong cash flow, strategic monetization, shareholder returns, and maintained guidance for continuing operations) outweigh the operational challenges and near-term headwinds, but the situation retains execution and macro risk.Q1-2026 Updates
Positive Updates
Strong Free Cash Flow
Generated $99 million of free cash flow in the quarter, providing liquidity to support buybacks, dividends and debt reduction.
Revenue Growth and Stable Adjusted EBITDA
Consolidated revenue of $649 million increased 3% year-over-year, and adjusted EBITDA before unallocated amounts was $145 million, in line with the prior year (EBITDA margin 22.3%).
Home & Building Products (HBP) Pricing and Margin
HBP revenue increased 3% with an EBITDA margin of 30.1%. Revenue benefited from +7% price and mix (residential and commercial), partially offset by a -4% reduction in residential volumes.
Consumer & Professional Products (CPP) Profitability Improvement
CPP revenue rose 2% to $241 million and adjusted EBITDA increased 19% to $22 million, driven by favorable price/mix and increased volumes in Australia and Canada despite soft U.S. demand.
Meaningful Capital Return to Shareholders
Repurchased $18 million (247,000 shares) in the quarter at an average $73.21/share; since April 2023 repurchases total $578 million (11.1 million shares) at an average $52.27/share, reducing outstanding shares by 19.3%. $280 million remains under the repurchase authorization.
Dividend Continuity and Growth
Board authorized a regular quarterly dividend of $0.22 per share (payable March 18), marking the 58th consecutive quarterly dividend; dividend has grown at an annualized compounded rate of 19% since initiation in 2012.
Strategic Joint Venture with ONCAP Unlocks Immediate Value
Announced JV combining AMES North America & other tool businesses with ONCAP: ONCAP 57% / Griffon 43%. Griffon to receive $100 million cash at closing plus $160 million of second lien debt (10% PIK), and retain a meaningful equity stake; JV expected to close by end of June.
Balance Sheet/Leverage Improvement
Net debt of $1.26 billion with net debt-to-EBITDA leverage of 2.3x (down from 2.4x prior year quarter). Paid down $60 million of Term Loan B during the quarter while still returning $29 million to shareholders.
Updated Continuing Operations Guidance
Continuing operations guidance for fiscal 2026: revenue ~$1.8 billion and adjusted EBITDA ~$520 million (excluding $62 million of unallocated costs). Free cash flow from continuing operations is expected to exceed net income (capex assumed at $50 million).
Negative Updates
Residential Volume Weakness Hurts HBP
HBP experienced a -4% decline in residential volumes which partially offset a +7% price/mix benefit and contributed to lower absorption.
HBP Adjusted EBITDA Decline and Cost Pressures
HBP adjusted EBITDA decreased 3% year-over-year despite revenue growth; management cited unfavorable material costs, higher labor costs and increased operating expenses as primary drivers of margin pressure.
Soft U.S. Consumer Demand Impacting CPP Volumes
CPP saw reduced volume in the U.S. due to persistently soft consumer demand, partially offset by growth in Australia and Canada.
GAAP Net Income Decline
GAAP net income decreased to $64 million ($1.41/share) from $71 million ($1.49/share) in the prior-year quarter, a decline of roughly 9.9%, though adjusted net income was flat at $66 million.
AMES U.K. Negative EBITDA and Discontinued Business Exposure
The company expects FY26 EBITDA for businesses being discontinued to total $60 million (AMES North America $25M, Australia $40M, with U.K. operating at negative EBITDA), highlighting underperformance in the U.K. operation.
Limited Near-Term Earnings Contribution from JV Stake
Griffon expects the JV's net income contribution to its minority stake to be immaterial due to the JV being a private company with leverage and amortization. The $160 million second lien debt is 10% PIK, which carries higher financing cost/risk.
Ongoing Inflationary Pressures and Absorption Headwinds
Management noted ongoing material and labor inflation and adverse absorption impacts from lower volumes, which pressured margins in the quarter and create uncertainty for near-term margin recovery.
Timing and Execution Risk on Strategic Actions
Griffon is undertaking multiple strategic actions (JV close, reviews for AMES Australia and U.K., combining Hunter Fan into HBP) with timing for some actions (Australia/U.K. alternatives) uncertain and subject to execution risk.
Company Guidance
Griffon updated full‑year fiscal 2026 guidance for continuing operations: revenue of $1.8 billion, adjusted EBITDA of $520 million (excluding $62 million of unallocated costs), capital expenditures ~$50 million, free cash flow expected to exceed net income, depreciation $27 million, amortization $15 million, interest expense ~$93 million and a normalized tax rate of ~28%. At quarter end (Dec 31) net debt was $1.26 billion with net‑debt/EBITDA leverage of 2.3x (down from 2.4x year‑ago), and the company paid down $60 million of Term Loan B in Q1. Q1 results included revenue $649 million (+3%), adjusted EBITDA before unallocated amounts $145 million (EBITDA margin 22.3%), gross profit $267 million (41.1% gross margin), GAAP net income $64 million ($1.41/share) and adjusted net income $66 million ($1.45/share), plus free cash flow of $99 million; segment detail: HBP revenue +3% with price/mix +7% and volume -4% (HBP EBITDA margin 30.1%), CPP revenue +2% to $241 million and CPP adjusted EBITDA +19% to $22 million. Strategic transaction terms impacting the outlook include expected discontinued‑business EBITDA of ~$60 million (AMES NA ~$25M, Australia ~$40M, U.K. negative), and proceeds from the AMES JV of $100 million cash plus $160 million of second‑lien debt (10% PIK) with Griffon retaining a 43% equity stake (JV expected to close by end of June).Griffon Financial Statement Overview
Summary
Mixed fundamentals: strong gross margin and solid cash generation (free cash flow growth and strong cash conversion), but profitability is pressured by a sharply lower net margin and the balance sheet carries high leverage (debt-to-equity 2.54), increasing financial risk.Income Statement
Griffon has shown a mixed performance in its income statement. The gross profit margin has improved over the years, reaching 41.99% in the latest period, indicating strong cost management. However, the net profit margin has declined significantly from 8% to 2.03%, reflecting challenges in maintaining profitability. Revenue growth has been inconsistent, with a recent 10% increase following a period of decline. The EBIT and EBITDA margins have also decreased, suggesting pressure on operational efficiency.65
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 2.54, indicating significant leverage, which could pose financial risks. Return on equity has decreased to 69.09%, down from previous highs, reflecting reduced profitability relative to shareholder equity. The equity ratio remains low, highlighting a reliance on debt financing. While there are strengths in equity growth, the high leverage remains a concern.55
Neutral
Cash Flow
Cash flow analysis shows a positive trend with a 9.73% growth in free cash flow, indicating improved cash generation capabilities. The operating cash flow to net income ratio is strong at 1.07, suggesting efficient cash conversion from earnings. The free cash flow to net income ratio of 1.0 further supports the company's ability to generate cash relative to its net income. Overall, cash flow management appears robust despite past fluctuations.70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.52B | 2.52B | 2.62B | 2.69B | 2.85B | 2.27B |
| Gross Profit | 1.06B | 1.06B | 1.02B | 948.82M | 950.25M | 641.11M |
| EBITDA | 288.00M | 286.40M | 461.44M | 279.57M | 428.36M | 225.43M |
| Net Income | 51.11M | 51.11M | 209.90M | 77.62M | -191.56M | 79.21M |
Balance Sheet | ||||||
| Total Assets | 2.06B | 2.06B | 2.37B | 2.42B | 2.82B | 2.60B |
| Cash, Cash Equivalents and Short-Term Investments | 99.05M | 99.05M | 114.44M | 102.89M | 120.18M | 248.65M |
| Total Debt | 1.59B | 1.59B | 1.71B | 1.65B | 1.76B | 1.19B |
| Total Liabilities | 1.99B | 1.99B | 2.15B | 2.10B | 2.34B | 1.80B |
| Stockholders Equity | 73.97M | 73.97M | 224.89M | 315.24M | 477.57M | 807.16M |
Cash Flow | ||||||
| Free Cash Flow | 303.58M | 303.58M | 308.87M | 365.17M | 26.95M | 74.82M |
| Operating Cash Flow | 356.02M | 356.02M | 377.27M | 428.77M | 69.44M | 111.77M |
| Investing Cash Flow | -34.29M | -34.29M | -65.00M | -45.21M | -585.85M | -49.42M |
| Financing Cash Flow | -338.75M | -338.75M | -298.75M | -400.16M | 393.35M | -28.25M |
Griffon Technical Analysis
Positive
84.73
Price Trends
77.99
Positive
76.14
Positive
74.62
Positive
Market Momentum
1.51
Positive
63.05
Neutral
48.90
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GFF, the sentiment is Positive. The current price of 84.73 is above the 20-day moving average (MA) of 82.44, above the 50-day MA of 77.99, and above the 200-day MA of 74.62, indicating a bullish trend. The MACD of 1.51 indicates Positive momentum. The RSI at 63.05 is Neutral, neither overbought nor oversold. The STOCH value of 48.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GFF.
Griffon Risk Analysis
Griffon disclosed 31 risk factors in its most recent earnings report. Griffon reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Griffon Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $8.99B | 39.29 | 14.90% | 0.63% | 1.23% | -22.77% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $3.95B | 92.30 | 34.20% | 1.01% | -3.95% | -74.65% | |
59 Neutral | $4.30B | 22.68 | 7.01% | 2.76% | -57.80% | -57.40% | |
52 Neutral | $4.79B | -9.90 | -12.71% | 27.59% | -8.45% | 27.66% | |
52 Neutral | $819.24M | 37.69 | 4.73% | 3.87% | -16.60% | 58.86% | |
45 Neutral | $492.80M | -1.14 | -41.05% | 20.53% | -15.85% | -59.42% |
* Industrials Sector Average
GFF
Griffon
89.57
9.52
11.89%
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6.28
-14.35
-69.56%
IEP
Icahn Enterprises
7.82
-0.51
-6.12%
MATW
Matthews International
26.39
-1.84
-6.52%
MDU
Mdu Resources Group
20.16
3.75
22.87%
VMI
Valmont
459.97
131.73
40.13%
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.