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Quanex (NX)
NYSE:NX

Quanex (NX) AI Stock Analysis

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NX

Quanex

(NYSE:NX)

Rating:72Outperform
Price Target:
$22.50
▲(11.44%Upside)
Quanex's overall stock score is driven primarily by its solid financial performance and successful integration efforts, despite valuation concerns and global challenges. The earnings call provides a balanced outlook with strong guidance, which boosts investor confidence.
Positive Factors
Earnings
Quanex Building Products Corp. reported better than anticipated results as revenue, EBITDA, and EPS came in ahead of consensus estimates and prior guidance.
Strategic Growth
The Tyman deal closure significantly increases the company’s scale, global footprint, and product offering, pointing to strong profit growth potential in the years ahead.
Valuation
Quanex trades at the lowest P/E multiple in the last 15+ years, offering a valuation disconnect with its growth potential.
Negative Factors
Consumer Confidence
Seemingly little upside to end markets near term with consumer confidence affected by significant unknowns in the macro backdrop and future costs.
Market Demand
Severe weather and soft market demand weighed on revenue for both legacy Quanex and Tyman operations.

Quanex (NX) vs. SPDR S&P 500 ETF (SPY)

Quanex Business Overview & Revenue Model

Company DescriptionQuanex Building Products Corporation (NX) is a leading manufacturer and supplier in the building products industry, focusing primarily on components used in residential and commercial construction. The company specializes in the production of window and door components, insulating glass spacers, and other engineered products that enhance energy efficiency and building sustainability. Quanex serves a variety of markets across North America and Europe, catering to both original equipment manufacturers (OEMs) and aftermarket customers.
How the Company Makes MoneyQuanex generates revenue through the manufacturing and sale of specialized building components. The company's primary revenue streams include the sale of window and door components, such as extruded vinyl profiles, insulating glass spacer systems, and screens, which are critical in constructing energy-efficient and sustainable buildings. Quanex partners with OEMs in the fenestration market, leveraging long-term relationships to secure steady demand for its products. Additionally, the company benefits from its aftermarket sales, providing replacement parts and upgrades that maintain or improve the performance of existing infrastructure. Strategic acquisitions and investments in innovative technologies also contribute to Quanex's financial performance, enabling the company to expand its product offerings and market reach.

Quanex Earnings Call Summary

Earnings Call Date:Jun 05, 2025
(Q2-2025)
|
% Change Since: 18.14%|
Next Earnings Date:Sep 04, 2025
Earnings Call Sentiment Neutral
The earnings call highlights significant growth and successful integration efforts, particularly with the Tyman acquisition leading to increased revenue and EBITDA. However, challenges such as volume declines in North America, tariff risks, and global uncertainties temper these successes. The sentiment is balanced as the highlights are countered by notable lowlights.
Q2-2025 Updates
Positive Updates
Successful Integration and Synergy Realization
The company expects to realize cost synergies of approximately $45 million over time, a 50% increase compared to the original target. The integration process has progressed quickly, and operational segments are functioning well.
Significant Revenue Growth
Net sales increased by approximately 70% to $452.2 million compared to $266.2 million for the same period in 2024, primarily driven by the Tyman acquisition.
Strong EBITDA Performance
Adjusted EBITDA for the quarter increased by 54.7% to $61.9 million compared to $40 million during the same period last year, largely due to the Tyman acquisition and cost synergies.
Share Repurchase Initiative
The company repurchased approximately $23.5 million of its stock in the second quarter, taking advantage of a low share price.
Positive Market Share Gains in Europe
The European Fenestration segment generated revenue of $61.3 million, representing an 8.3% increase compared to the second quarter of 2024, with volumes up approximately 9% year-over-year.
Negative Updates
North American Volume Decline
Net sales in the North American Fenestration segment decreased by 5.5% year-over-year, with volumes declining by approximately 7% due to low consumer confidence and higher interest rates.
Tariff and Global Uncertainty Challenges
Approximately 22% of total COGS is exposed to tariff risk, with consumer confidence negatively impacted by higher interest rates and global conflicts.
Flat Performance in North American Cabinet Components
Net sales were $51.2 million, virtually unchanged from $51.1 million in 2024, with volumes declining by approximately 3% despite price increases.
Soft Market Demand Impacting Tyman Business
Revenue was down approximately 2% in the Tyman segment due to soft market demand in North America.
Company Guidance
During the second quarter of fiscal 2025, Quanex Building Products Corporation provided guidance indicating that they expect to achieve cost synergies of approximately $45 million over time, a 50% increase compared to the original target of $30 million. The company anticipates reaching the initial $30 million target by early fiscal 2026. Quanex reaffirmed its net sales guidance for fiscal 2025 in the range of $1.84 billion to $1.86 billion, and adjusted EBITDA guidance between $270 million and $280 million. In terms of operational performance, the company expects an 8% to 10% increase in revenue for the third quarter compared to the second quarter, along with an adjusted EBITDA margin expansion of 250 to 300 basis points. The company's focus on procurement synergies and operational efficiencies have contributed significantly to the revised synergy target, while their domestic manufacturing footprint presents potential opportunities amidst ongoing tariff uncertainties.

Quanex Financial Statement Overview

Summary
Quanex shows strong revenue growth and effective cost management. However, the declining EBIT margin and ROE, along with negative free cash flow growth, pose challenges for profitability and liquidity.
Income Statement
75
Positive
The company shows a solid gross profit margin of 43.96% for TTM, indicating efficient cost management. However, the net profit margin has decreased to 0.83%, reflecting challenges in controlling other expenses. Revenue growth is positive at 12.6% from the previous year, demonstrating a robust increase in sales. Nevertheless, the EBIT margin has declined significantly, suggesting potential inefficiencies or increased operational costs.
Balance Sheet
68
Positive
Quanex's debt-to-equity ratio is 0.91, reflecting moderate leverage but manageable risk. The equity ratio stands at 43.79%, indicating a stable asset financing structure. However, return on equity has dropped to 1.23%, signaling decreased profitability for shareholders. The company maintains a balanced approach to asset and liability management, although the lower ROE may concern investors.
Cash Flow
72
Positive
Quanex's free cash flow has decreased, resulting in a negative growth rate of -35.6%, which may impact future investments. The operating cash flow to net income ratio is strong at 6.07, suggesting effective cash generation relative to profits. However, the free cash flow to net income ratio is lower at 2.79, indicating potential constraints in liquidity after capital expenditures.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.44B1.28B1.13B1.22B1.07B851.57M
Gross Profit
324.66M305.62M277.52M268.50M240.61M192.82M
EBIT
39.93M54.83M110.70M111.28M81.87M55.27M
EBITDA
124.55M123.00M148.05M152.43M125.36M102.77M
Net Income Common Stockholders
11.93M33.06M82.50M88.34M56.98M38.50M
Balance SheetCash, Cash Equivalents and Short-Term Investments
49.98M97.74M58.47M55.09M40.06M51.62M
Total Assets
2.22B2.32B831.14M724.62M717.32M691.59M
Total Debt
879.85M892.98M116.39M87.69M106.50M169.75M
Net Debt
829.87M795.23M57.91M32.59M66.44M118.13M
Total Liabilities
1.25B1.31B285.59M259.78M297.54M335.83M
Stockholders Equity
972.12M1.01B545.55M464.83M419.78M355.76M
Cash FlowFree Cash Flow
33.32M51.73M109.66M64.84M54.58M75.07M
Operating Cash Flow
72.45M88.81M147.05M97.97M78.59M100.80M
Investing Cash Flow
-422.50M-420.59M-128.44M-32.96M-18.71M-25.22M
Financing Cash Flow
372.30M385.16M-16.15M-45.88M-71.86M-55.12M

Quanex Technical Analysis

Technical Analysis Sentiment
Positive
Last Price20.19
Price Trends
50DMA
17.42
Positive
100DMA
19.11
Positive
200DMA
23.38
Negative
Market Momentum
MACD
0.28
Negative
RSI
66.54
Neutral
STOCH
57.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NX, the sentiment is Positive. The current price of 20.19 is above the 20-day moving average (MA) of 17.96, above the 50-day MA of 17.42, and below the 200-day MA of 23.38, indicating a neutral trend. The MACD of 0.28 indicates Negative momentum. The RSI at 66.54 is Neutral, neither overbought nor oversold. The STOCH value of 57.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NX.

Quanex Risk Analysis

Quanex disclosed 26 risk factors in its most recent earnings report. Quanex 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

Quanex Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$1.03B23.4827.48%1.65%-1.05%-2.78%
GRGRC
76
Outperform
$978.41M22.0012.06%1.98%0.92%21.96%
GIGIC
74
Outperform
$1.05B17.2622.15%3.78%-0.79%-13.64%
NXNX
72
Outperform
$892.65M31.832.18%1.68%47.66%-75.65%
68
Neutral
$1.18B-1.35%13.73%86.81%
67
Neutral
$1.10B29.724.27%1.10%-5.39%12.14%
66
Neutral
$4.49B12.345.40%248.65%4.13%-12.33%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NX
Quanex
20.19
-8.99
-30.81%
ATRO
Astronics
33.01
14.65
79.79%
GRC
Gorman-Rupp Company
37.42
1.78
4.99%
NSSC
Napco Security Technologies
28.75
-20.64
-41.79%
HLIO
Helios Technologies
33.11
-14.21
-30.03%
GIC
Global Industrial Company
27.42
-5.10
-15.68%

Quanex Corporate Events

Dividends
Quanex Declares Quarterly Dividend of $0.08 Per Share
Positive
May 30, 2025

On May 30, 2025, Quanex Building Products Corporation announced that its Board of Directors declared a quarterly cash dividend of $0.08 per share on its common stock. This dividend is payable on June 30, 2025, to shareholders of record as of June 16, 2025. This announcement reflects Quanex’s ongoing commitment to returning value to its shareholders and may positively impact the company’s market positioning by reinforcing investor confidence.

The most recent analyst rating on (NX) stock is a Buy with a $38.00 price target. To see the full list of analyst forecasts on Quanex stock, see the NX Stock Forecast page.

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.