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Griffon Corp. (GFF)
NYSE:GFF
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Griffon
(NYSE:GFF)
Rating:63Neutral
Price Target:
$79.00
▲(7.16% Upside)
Positive Factors
EBITDA Margin Achievement
HBP EBITDA margin exceeded expectations, reaching 31.7%, supported by increased revenue and reduced material costs.
Improved Profitability
CPP profitability improved significantly, with EBITDA rising to $25 million from $14 million in the prior year due to stronger revenue and improved production costs.
Share Buyback Program
Griffon's capital allocation remains supportive with a new $400 million share buyback program and guidance of $1 billion+ free cash flow over the next three years.
Negative Factors
Earnings Expectations
FQ3 results were slightly below Street estimates, but more importantly, we sensed investors were also looking for upside (combination of seasonality and recent trends), suggesting a higher bar to begin with.
Impact of Steel Prices
Lower sales and higher costs were the driver, with management indicating higher steel prices hurt margins by 'a few hundred bps' this quarter.
Revenue Decline
HBP revenue and margins lighter than we modeled. HBP revenue declined -2% (vs. our -1% estimate), as increased residential volumes were offset by lower commercial volumes.
Griffon (GFF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.45B
Dividend Yield0.94%
Average Volume (3M)449.10K
Price to Earnings (P/E)55.2
Beta (1Y)1.09
Revenue Growth-3.37%
EPS Growth-61.83%
CountryUS
Employees5,300
SectorIndustrials
Sector Strength78
IndustryConglomerates
Share Statistics
EPS (TTM)1.50
Shares Outstanding46,558,647
10 Day Avg. Volume759,628
30 Day Avg. Volume449,099
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.39
Enterprise Value/Revenue1.91
Enterprise Value/Gross Profit4.59
Enterprise Value/Ebitda59.68
Forecast
1Y Price Target
$94.00Price Target Upside27.51% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
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:Aug 06, 2025
(Q3-2025)
| % Change Since: -10.47%|
Next Earnings Date:Nov 12, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with strong performance in the Home & Building Products segment and successful financial maneuvers in stock repurchase and dividend growth. However, significant challenges were noted in the Consumer and Professional Products segment, notably a large impairment charge and reduced revenue expectations. Overall, the sentiment is balanced with notable strengths and significant weaknesses.Q3-2025 Updates
Positive Updates
Home & Building Products Segment Performance
For the first 9 months, HBP profitability exceeded expectations with an EBITDA margin of 31.4%. Revenue for Home and Building Products increased 2% from the prior year, driven by favorable price and mix.
Improved EBITDA Margins
Adjusted EBITDA before unallocated amounts increased 5% compared to the prior year quarter, with EBITDA margin before unallocated amounts increasing by 240 basis points.
Successful Stock Repurchase Program
Repurchased $40 million of stock during the third quarter, totaling a reduction of Griffon's outstanding shares by 18.4% relative to the total shares outstanding at the end of the second quarter of fiscal 2023.
Consistent Dividend Growth
Authorized a regular quarterly dividend of $0.18 per share, marking the 56th consecutive quarterly dividend, with dividends growing at an annualized compound rate of more than 18% since 2012.
Strong Balance Sheet and Liquidity
Net debt-to-EBITDA leverage reduced to 2.5x, down from 2.7x at the end of last year's third quarter.
Negative Updates
Consumer and Professional Products Segment Weakness
CPP revenue decreased 16% compared to the prior year quarter, primarily driven by a 19% decrease in volume due to reduced consumer demand and disrupted ordering patterns from increased tariffs.
Significant Goodwill Impairment Charge
Recorded a pretax charge of $244 million for impairment on goodwill and indefinite-lived intangible assets related to the acquisition of Hunter Fan, caused by ongoing weak consumer demand and increased tariffs.
Reduced Revenue Expectations
Revenue expectations reduced by $100 million to $2.5 billion due to ongoing consumer weakness at CPP.
GAAP Net Loss
Third quarter GAAP net loss was $120 million or $2.65 per share compared to net income of $41 million in the prior year quarter.
Company Guidance
During Griffon Corporation's Fiscal Third Quarter 2025 earnings call, the company reaffirmed its full-year EBITDA guidance of $575 million to $600 million, despite lowering revenue expectations by $100 million to $2.5 billion due to ongoing consumer weakness in the Consumer and Professional Products (CPP) segment. The Home & Building Products (HBP) segment exceeded expectations with an EBITDA margin of 31.4% for the first nine months, driven by favorable price and mix. In contrast, CPP faced weak demand and increased tariffs that disrupted customer ordering patterns, although its EBITDA margin improved by 270 basis points year-over-year. The company repurchased $40 million of stock in the third quarter, reducing outstanding shares by 18.4% since the end of fiscal 2023. Additionally, a regular quarterly dividend of $0.18 per share was authorized. Griffon's net debt was $1.3 billion with a leverage ratio of 2.5x, down from 2.7x the previous year. The company revised its net interest expense guidance to $95 million and capital expenditures to $60 million. Despite challenges, Griffon remains optimistic about its long-term strategic plan and expects to generate over $1 billion in free cash flow this fiscal year and the next two years.Griffon Financial Statement Overview
Summary
Griffon demonstrates strong profitability and cash flow management, with improving margins and cash generation. However, the company faces challenges with declining revenue growth and high leverage, which could impact long-term financial stability.Income Statement
Griffon's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) gross profit margin is healthy at 40.95%, indicating strong cost management. However, the revenue growth rate is negative, suggesting a decline in sales. The net profit margin improved to 9.06% in TTM, reflecting better profitability compared to previous years. EBIT and EBITDA margins are also strong, indicating efficient operations. Overall, the company demonstrates solid profitability but faces challenges in revenue growth.72
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 0.85 in TTM, which is a significant improvement from previous years but still indicates high leverage. Return on equity is robust at 38.27%, showing effective use of equity to generate profits. The equity ratio is low, suggesting a reliance on debt financing. While the company is profitable, the high leverage poses a risk to financial stability.65
Positive
Cash Flow
Griffon's cash flow statement is strong, with a positive free cash flow growth rate of 4.86% in TTM. The operating cash flow to net income ratio is 1.07, indicating good cash generation relative to net income. The free cash flow to net income ratio is high at 0.90, reflecting efficient cash management. Overall, the company shows solid cash flow performance, supporting its operational needs and financial flexibility.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.52B | 2.62B | 2.69B | 2.85B | 2.27B | 2.41B |
| Gross Profit | 1.05B | 1.02B | 1.03B | 936.89M | 641.11M | 641.43M |
| EBITDA | 80.39M | 461.44M | 463.13M | -121.84M | 245.21M | 208.09M |
| Net Income | 69.97M | 209.90M | 77.62M | -287.71M | 79.21M | 53.43M |
Balance Sheet | ||||||
| Total Assets | 2.09B | 2.37B | 2.42B | 2.82B | 2.60B | 2.46B |
| Cash, Cash Equivalents and Short-Term Investments | 107.28M | 114.44M | 102.89M | 120.18M | 248.65M | 218.09M |
| Total Debt | 1.63B | 1.71B | 1.65B | 1.76B | 1.19B | 1.21B |
| Total Liabilities | 2.02B | 2.15B | 2.10B | 2.34B | 1.80B | 1.76B |
| Stockholders Equity | 63.90M | 224.89M | 315.24M | 477.57M | 807.16M | 700.15M |
Cash Flow | ||||||
| Free Cash Flow | 325.74M | 308.87M | 365.17M | 26.95M | 74.82M | 85.01M |
| Operating Cash Flow | 354.99M | 380.04M | 428.77M | 69.44M | 111.77M | 134.01M |
| Investing Cash Flow | -52.69M | -65.00M | -45.21M | -585.85M | -49.42M | -58.86M |
| Financing Cash Flow | -329.57M | -298.75M | -400.16M | 393.35M | -28.25M | 68.19M |
Griffon Technical Analysis
Negative
73.72
Price Trends
75.21
Negative
72.30
Negative
73.24
Negative
Market Momentum
-1.16
Positive
42.32
Neutral
65.55
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GFF, the sentiment is Negative. The current price of 73.72 is below the 20-day moving average (MA) of 76.49, below the 50-day MA of 75.21, and above the 200-day MA of 73.24, indicating a bearish trend. The MACD of -1.16 indicates Positive momentum. The RSI at 42.32 is Neutral, neither overbought nor oversold. The STOCH value of 65.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GFF.
Griffon Risk Analysis
Griffon disclosed 32 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
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $7.41B | 34.97 | 14.51% | 0.68% | -0.15% | 24.55% | |
71 Outperform | $813.90M | 4.25 | 18.71% | ― | 5.04% | 7.61% | |
63 Neutral | $3.45B | 55.23 | 48.69% | 0.94% | -3.37% | -61.83% | |
59 Neutral | AU$1.66B | 11.43 | -2.47% | 3.57% | 7.50% | 6.12% | |
58 Neutral | $549.22M | ― | -4.98% | 13.68% | 6.77% | 9.95% | |
54 Neutral | $3.31B | 15.42 | 7.98% | 2.82% | -40.60% | -47.10% | |
51 Neutral | $731.28M | ― | -12.81% | 4.20% | -11.13% | -351.71% |
* Industrials Sector Average
Performance Comparison
GFF
Griffon
73.72
10.28
16.20%
CODI
Compass Diversified Holdings
7.31
-13.27
-64.48%
MATW
Matthews International
23.83
-0.42
-1.73%
MDU
Mdu Resources Group
16.40
3.15
23.77%
SPLP
Steel Partners Holdings
42.10
4.32
11.43%
VMI
Valmont
373.94
91.30
32.30%
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.