Simpson Manufacturing Co (SSD) AI Stock Analysis

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Simpson Manufacturing Co

(NYSE:SSD)

Rating:77Outperform

Price Target:

$176.00

▲( 13.19% Upside)

Simpson Manufacturing Co's strong financial performance and positive earnings call sentiment are the primary drivers of its high stock score. Despite some technical analysis concerns, the company's robust financial position and strategic initiatives in North America provide a solid foundation for continued growth. The stock is fairly valued, and recent corporate events indicate healthy governance and market confidence.

Positive Factors

Business Model

SSD's long-term prospects remain strong, behind a high-quality business model, share gains, and balance sheet.

Investments

SSD leaned into investments in 2024, positive for longer-term share gain opportunities.

Negative Factors

Financial Performance

Q3 operating margin was 21.3%, below the Street's 22.6% expectation.

Simpson Manufacturing Co (SSD) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$6.50B

Dividend Yield0.72%

Average Volume (3M)245.08K

Price to Earnings (P/E)20.2

Beta (1Y)1.12

Revenue Growth1.38%

EPS Growth-3.80%

CountryUS

Employees5,872

SectorBasic Materials

Sector Strength64

IndustryConstruction

Share Statistics

EPS (TTM)1.85

Shares Outstanding41,827,892

10 Day Avg. Volume274,768

30 Day Avg. Volume245,082

Financial Highlights & Ratios

PEG Ratio18.92

Price to Book (P/B)2.83

Price to Sales (P/S)0.00

P/FCF Ratio34.08

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$182.00

Price Target Upside17.05% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Simpson Manufacturing Co Business Overview & Revenue Model

Company DescriptionSimpson Manufacturing Co (SSD) is a leading global provider in the building products sector, particularly focusing on the design, engineering, and manufacturing of wood and concrete construction products. The company's core products include structural connectors, anchors, and other related products essential for residential and commercial construction. With a strong emphasis on innovation and quality, Simpson Manufacturing serves a diverse clientele, including contractors, builders, and do-it-yourself (DIY) enthusiasts across various markets worldwide.

How the Company Makes MoneySimpson Manufacturing Co primarily generates revenue through the sale of its construction-related products, which are distributed across a wide network of retail and wholesale channels. The company's key revenue streams include the sale of structural connectors and anchors designed for wood and concrete applications, which are critical components in building stability and safety. Additionally, Simpson Manufacturing leverages strategic partnerships with major retailers and distributors to extend its market reach and boost sales. The company also invests in research and development to innovate and expand its product lines, ensuring it meets evolving industry standards and customer needs. This focus on quality and innovation helps maintain its competitive edge and drives consistent revenue growth.

Simpson Manufacturing Co Financial Statement Overview

Summary

Simpson Manufacturing Co's financial performance is strong, with consistent revenue growth, robust profitability margins, a stable balance sheet with low leverage, and efficient cash flow management. These factors indicate a well-managed, financially stable company poised for future growth.

Income Statement

Very Positive

Simpson Manufacturing Co has demonstrated strong income statement performance with consistent revenue growth and robust profitability margins. The TTM revenue growth rate is approximately 1.8%, indicating steady expansion. Gross and net profit margins remain healthy at 46.1% and 14.5% respectively. EBIT and EBITDA margins are also solid at 19.5% and 23.5%, reflecting operational efficiency. Overall, the company exhibits strong revenue generation and profitability.

Balance Sheet

Positive

The balance sheet of Simpson Manufacturing Co is stable, with a commendable equity ratio of 80.3%, indicating a strong equity base relative to total assets. The debt-to-equity ratio is low at 0.04, suggesting minimal leverage and financial risk. Return on equity is solid at 14.3%, demonstrating good profitability relative to shareholder investments. These metrics highlight a financially stable position with low leverage and efficient capital utilization.

Cash Flow

Positive

Cash flow analysis reveals strong cash generation capabilities, with a free cash flow growth rate of 19.9% in the TTM period. The operating cash flow to net income ratio stands at 1.02, indicating efficient cash conversion from profits. The free cash flow to net income ratio of 0.58 shows a healthy level of free cash flow generation relative to earnings. This indicates robust cash flow management and the ability to sustain operations and growth.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.24B	2.23B	2.21B	2.12B	1.57B	1.27B
	Gross Profit
1.03B	1.03B	1.04B	941.29M	755.03M	576.38M
	EBIT
437.56M	429.98M	475.15M	459.07M	367.79M	252.36M
	EBITDA
527.61M	518.63M	554.21M	532.95M	411.44M	297.60M
	Net Income Common Stockholders
324.68M	322.22M	353.99M	334.00M	266.45M	187.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
150.29M	239.37M	429.82M	300.74M	301.15M	274.64M
	Total Assets
2.83B	2.74B	2.70B	2.51B	1.48B	1.23B
	Total Debt
82.91M	98.68M	551.57M	623.92M	37.09M	37.20M
	Net Debt
-67.38M	-140.69M	121.75M	323.18M	-264.06M	-237.44M
	Total Liabilities
556.70M	923.03M	1.02B	1.09B	300.13M	251.63M
	Stockholders Equity
2.27B	1.81B	1.68B	1.42B	1.18B	980.94M
Cash Flow		Free Cash Flow
189.28M	157.80M	338.20M	332.60M	101.70M	169.66M
	Operating Cash Flow
330.22M	338.16M	427.02M	399.82M	151.29M	207.57M
	Investing Cash Flow
-219.89M	-259.26M	-103.25M	-870.24M	-58.80M	-39.85M
	Financing Cash Flow
-236.66M	-261.46M	-199.03M	465.53M	-71.62M	-126.78M

Simpson Manufacturing Co Technical Analysis

Technical Analysis Sentiment

Negative

Last Price155.49

Price Trends

50DMA

154.80

Positive

100DMA

160.21

Negative

200DMA

171.02

Negative

Market Momentum

MACD

1.65

Positive

RSI

46.77

Neutral

STOCH

28.74

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SSD, the sentiment is Negative. The current price of 155.49 is below the 20-day moving average (MA) of 157.92, above the 50-day MA of 154.80, and below the 200-day MA of 171.02, indicating a neutral trend. The MACD of 1.65 indicates Positive momentum. The RSI at 46.77 is Neutral, neither overbought nor oversold. The STOCH value of 28.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SSD.

Simpson Manufacturing Co Risk Analysis

Simpson Manufacturing Co disclosed 42 risk factors in its most recent earnings report. Simpson Manufacturing Co reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Simpson Manufacturing Co Peers Comparison

Overall Rating

UnderperformOutperform

Sector (50)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SSD	77 Outperform	$6.50B	20.23	18.10%	0.72%	1.38%	-3.80%
AZEK	77 Outperform	$7.16B	48.23	10.62%	―	5.93%	3.50%
LPX	74 Outperform	$6.37B	16.08	24.41%	1.16%	8.09%	55.08%
TREX	66 Neutral	$6.48B	31.09	23.07%	―	-9.10%	-21.50%
FBIN	63 Neutral	$6.10B	14.86	18.62%	1.90%	-3.48%	4.55%
Sector *	50 Neutral	$1.99B	-1.06	-21.34%	3.71%	2.03%	-30.65%

* Basic Materials Sector Average

Performance Comparison

SSD

Simpson Manufacturing Co

154.40

-17.47

-10.16%

FBIN

Fortune Brands Innovations

50.26

-19.27

-27.71%

LPX

Louisiana-Pacific

92.64

3.73

4.20%

TREX

Trex Company

56.92

-31.38

-35.54%

AZEK

AZEK Company

49.24

1.85

3.90%

Simpson Manufacturing Co Earnings Call Summary

Earnings Call Date:Apr 28, 2025

(Q1-2025)

% Change Since: 1.08%|

Next Earnings Date:Jul 28, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a balanced performance with strong growth in North America and strategic investments, offset by declines in European sales and challenges due to tariffs and cost increases. Despite these challenges, the company maintains a positive outlook for the year.

Q1-2025 Updates

Positive Updates

North American Market Performance

Net sales in North America totaled $420.7 million, up 3.4% from $406.7 million last year, exceeding U.S. housing starts by approximately 420 basis points.

Growth in Outdoor Living Category

The outdoor living category experienced low-double-digit growth over the prior year, attributed to a growing product offering and intentional marketing efforts.

OEM and Commercial Market Growth

OEM delivered high-single-digit volume growth year-over-year, and the commercial market saw low-single-digit growth despite challenging conditions.

Improvement in Gross and Operating Margins

Consolidated gross margin improved to 46.8% from 46.1%, and operating margin expanded by 90 basis points to 19% over last year.

Strategic Investments and Facility Expansions

Investments in Columbus, Ohio, and Gallatin, Tennessee facilities are on budget and on time, with the new Gallatin facility expected to optimize fastener sourcing.

Negative Updates

Decline in European Sales

Net sales in Europe decreased 5.1% compared to the prior year, with foreign currency translation impacting results negatively.

Challenges in Component Manufacturing and Residential Volumes

Component manufacturing market volumes declined slightly, and Residential volume performance was down modestly.

Impact of Tariffs and Cost Increases

New tariffs and increased costs in labor, energy, and transportation are challenging, prompting an 8% price increase to offset some of these pressures.

Company Guidance

During the first quarter of 2025, Simpson Manufacturing reported net sales of $538.9 million, reflecting a modest growth of 1.6% year-over-year, despite a challenging macroeconomic environment. The North American segment saw a 3.4% increase in net sales to $420.7 million, while European sales experienced a 5.1% decline. The company exceeded U.S. housing starts by approximately 420 basis points in North America, with net sales of $420.7 million. Gross margin improved to 46.8%, up from 46.1% in Q1 2024, despite higher input costs. Operating margin expanded by 90 basis points to 19%, and adjusted EBITDA increased by 3.8% to $121.8 million. Simpson Manufacturing maintained its guidance, expecting operating margins between 18.5% and 20.5% for the year, with U.S. housing starts anticipated to remain flat-to-up in the low-single-digit range. The company also reaffirmed its commitment to returning at least 35% of free cash flow to shareholders.

Simpson Manufacturing Co Corporate Events

Executive/Board ChangesShareholder Meetings

Simpson Manufacturing Co Approves Key Proposals at Annual Meeting

Positive

May 12, 2025

On May 6, 2025, Simpson Manufacturing Co. held its Annual Meeting of Stockholders where all four proposals presented were approved. These included the election of eight directors, approval of executive compensation, the amended Employee Stock Purchase Plan, and the ratification of Grant Thornton LLP as the independent accounting firm for 2025. This approval signifies strong shareholder support for the company’s governance and strategic decisions, potentially reinforcing its market position and operational stability.

The most recent analyst rating on (SSD) stock is a Hold with a $195.00 price target. To see the full list of analyst forecasts on Simpson Manufacturing Co stock, see the SSD Stock Forecast page.

Stock BuybackBusiness Operations and StrategyFinancial Disclosures

Simpson Manufacturing Co Reports Q1 2025 Financial Results

Positive

Apr 28, 2025

On April 28, 2025, Simpson Manufacturing Co., Inc. announced its financial results for the first quarter of 2025, highlighting a 1.6% year-over-year increase in net sales to $538.9 million and an operating income margin of 19.0%. The company also repurchased $25.0 million in common stock and reaffirmed its 2025 guidance. Despite a challenging macroeconomic environment, the company reported a $9.0 million benefit from its 2024 acquisitions and implemented price increases to offset rising costs, including those related to new tariffs.

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.