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Vulcan Materials Company (VMC)
:VMC

Vulcan Materials (VMC) AI Stock Analysis

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Vulcan Materials

(NYSE:VMC)

Rating:78Outperform
Price Target:
Vulcan Materials reflects strong financial performance, particularly in profitability and cash flow management, which supports its high overall score. The earnings call highlights robust improvements in profitability and positive outlook despite some sector challenges. However, technical analysis suggests potential overbought conditions, and a high P/E ratio raises valuation concerns. Overall, the company's solid fundamentals and positive outlook in public demand sectors support a favorable stock score.
Positive Factors
Financial Performance
Vulcan Materials Company posted a solid fourth quarter with EBITDA increasing 16% year-over-year, supported by strong pricing and improved operational efficiency.
Pricing Strategy
There is confidence in sustained pricing power with price hikes already announced and in effect for 2025.
Negative Factors
Interest Rate Impact
On the private side, there is caution due to lingering impacts from elevated interest rates, with aggregates shipments already falling 7% and construction activity relatively weak.
Market Challenges
Encouragingly, VMC noted that it is bidding on a lot of large projects, but there have been delays in converting that bidding activity to actual work.

Vulcan Materials (VMC) vs. SPDR S&P 500 ETF (SPY)

Vulcan Materials Business Overview & Revenue Model

Company DescriptionVulcan Materials Company (VMC) is a leading producer of construction aggregates, primarily crushed stone, sand, and gravel. Headquartered in Birmingham, Alabama, the company operates in the construction materials sector, serving various markets across the United States. Vulcan also provides asphalt mix and ready-mixed concrete, supporting infrastructure development, public works, and private construction projects. With a strong commitment to sustainability and innovation, Vulcan Materials plays a crucial role in building and maintaining essential infrastructure.
How the Company Makes MoneyVulcan Materials makes money primarily through the extraction, production, and sale of construction aggregates, which constitute the largest portion of its revenue. The company owns and operates numerous quarries and production facilities, allowing it to supply aggregates to a wide range of customers including construction companies, government agencies, and private developers. Additionally, Vulcan generates revenue from the sale of asphalt mix and ready-mixed concrete, which are essential for paving and building projects. The company's extensive logistics network and strategic location of facilities help optimize distribution and reduce costs. Key revenue streams include long-term contracts with government entities for infrastructure projects and partnerships with construction firms for large-scale developments. Vulcan's financial performance is influenced by factors such as construction activity levels, economic conditions, and regulatory environments.

Vulcan Materials Key Performance Indicators (KPIs)

Any
Any
Revenue by Segment
Revenue by Segment
Analyzes revenue from each business segment, indicating which parts of the company are driving growth and where strategic focus might be needed.
Chart InsightsVulcan Materials' revenue from aggregates shows resilience with a steady upward trend, supported by strategic price increases despite a slight dip in shipments due to weather. Asphalt and concrete segments are experiencing robust growth, with significant profitability improvements driven by acquisitions and operational efficiencies. The earnings call highlights strong public demand, bolstered by infrastructure investments, offsetting challenges in the private sector. Management's focus on cost management and capital allocation underpins their optimistic outlook, maintaining solid momentum in a challenging economic environment.
Data provided by:Main Street Data

Vulcan Materials Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 6.64%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call indicates strong overall performance with significant improvements in profitability and successful integration of acquisitions. However, there are some challenges in the private sector and delays in large commercial projects. Despite these challenges, strong public demand and effective cost management provide a positive outlook.
Q1-2025 Updates
Positive Updates
Strong Improvement in Profitability
The company delivered a 20% year-over-year improvement in cash gross profit per ton, complemented by a 27% improvement in adjusted EBITDA and 420 basis points of expansion in adjusted EBITDA margin.
Price Increases and Cost Efficiencies
Aggregates freight-adjusted price improved 7% year-over-year, and operational efficiencies led to a 3% decline in aggregates freight-adjusted unit cash cost of sales.
Successful Acquisition Integration
Acquisitions from the prior year contributed significantly, with total cash gross profit improving by over 50%.
Growth in Downstream Businesses
Cash unit profitability in asphalt and concrete expanded by 19% and 77%, respectively.
Healthy Public Demand
Public demand is expected to remain strong, supported by federal and local funding, including IIJ-related spending.
Strong Free Cash Flow and Capital Allocation
Generated $869 million of free cash flow over the last 12 months, with a 93% conversion of net earnings, and maintained a strong balance sheet with a debt-to-adjusted EBITDA leverage of 2.2x.
Negative Updates
Decline in Aggregates Shipments
Aggregates shipments in the first quarter were 1% lower than the prior year, impacted by extremely cold weather and one fewer shipping day in the quarter.
Challenges in Private Demand
Private demand, particularly in residential construction, faces challenges due to affordability issues and elevated interest rates.
Delays in Large Commercial Projects
Some big commercial projects have been delayed due to macroeconomic uncertainty and interest rate environment.
Company Guidance
During the Vulcan Materials Company's First Quarter 2025 Earnings Call, the management provided guidance highlighting a robust performance and optimistic outlook despite macroeconomic uncertainties. They reported a 20% year-over-year improvement in cash gross profit per ton, a 27% increase in adjusted EBITDA, and a 420 basis point expansion in adjusted EBITDA margin. Aggregates shipments were down 1% year-over-year due to weather impacts, yet price increases yielded a 7% improvement in aggregates freight-adjusted price. The company maintains its adjusted EBITDA guidance for 2025 between $2.35 billion and $2.55 billion. Free cash flow over the last 12 months was $869 million, with a 93% conversion of net earnings. Vulcan continues to focus on maintaining solid momentum, leveraging its operational and sales disciplines, and expects capital expenditures between $750 million and $800 million for the full year. They anticipate challenges in private demand but see public demand as a healthy offset, driven by infrastructure investments and federal funding.

Vulcan Materials Financial Statement Overview

Summary
Vulcan Materials presents a solid financial profile with strong profitability, a stable balance sheet, and robust cash flow generation. The company exhibits consistent revenue growth and efficient cost management, which supports its profitability metrics. While the increase in debt is a point to monitor, the overall financial health remains strong, positioning the company well within the construction materials industry.
Income Statement
85
Very Positive
Vulcan Materials demonstrates strong profitability with a healthy Gross Profit Margin of 44.35% and solid Net Profit Margin of 12.50% for the TTM period. The company has shown consistent revenue growth, with a TTM Revenue Growth Rate of 1.20%. Additionally, the EBIT Margin is robust at 18.96%, indicating efficient cost management. While the EBITDA Margin of 27.54% highlights strong operating performance, the growth trajectory, although positive, is moderate.
Balance Sheet
77
Positive
The balance sheet reveals a stable financial structure with a Debt-to-Equity Ratio of 0.67, which is manageable for the construction materials industry. The Equity Ratio stands at 48.67%, indicating a balanced capital structure. Return on Equity is commendable at 11.54%, reflecting effective use of shareholder funds. However, the slight increase in total debt over recent periods could pose a potential risk if not managed carefully.
Cash Flow
82
Very Positive
The cash flow analysis shows positive trends with a Free Cash Flow Growth Rate of 7.80% in the TTM period. The Operating Cash Flow to Net Income Ratio is strong at 1.59, indicating that the company generates ample cash relative to its net earnings. The Free Cash Flow to Net Income Ratio of 0.93 supports this, showcasing healthy liquidity for reinvestment or debt servicing. Overall, the company maintains solid cash flow management.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
7.51B7.42B7.78B7.32B5.55B4.86B
Gross Profit
3.33B2.00B1.95B1.56B1.37B1.28B
EBIT
1.42B1.36B1.43B951.40M1.01B895.73M
EBITDA
2.07B1.98B2.06B1.53B1.53B1.31B
Net Income Common Stockholders
938.20M911.90M933.20M575.60M670.80M584.50M
Balance SheetCash, Cash Equivalents and Short-Term Investments
181.30M559.70M931.10M161.40M235.00M1.20B
Total Assets
16.71B17.10B14.55B14.23B13.68B11.69B
Total Debt
5.46B5.83B4.39B4.52B4.52B3.69B
Net Debt
5.28B5.27B3.45B4.36B4.29B2.49B
Total Liabilities
8.55B8.96B7.04B7.28B7.11B5.66B
Stockholders Equity
8.13B8.12B7.48B6.93B6.54B6.03B
Cash FlowFree Cash Flow
869.00M806.10M664.20M535.60M560.60M708.16M
Operating Cash Flow
1.49B1.41B1.54B1.15B1.01B1.07B
Investing Cash Flow
-2.78B-2.81B-163.50M-1.05B-1.87B-381.51M
Financing Cash Flow
1.18B1.06B-585.60M-175.20M-94.30M234.66M

Vulcan Materials Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price261.18
Price Trends
50DMA
257.60
Positive
100DMA
253.89
Positive
200DMA
257.24
Positive
Market Momentum
MACD
0.44
Positive
RSI
46.61
Neutral
STOCH
37.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VMC, the sentiment is Neutral. The current price of 261.18 is below the 20-day moving average (MA) of 266.27, above the 50-day MA of 257.60, and above the 200-day MA of 257.24, indicating a neutral trend. The MACD of 0.44 indicates Positive momentum. The RSI at 46.61 is Neutral, neither overbought nor oversold. The STOCH value of 37.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VMC.

Vulcan Materials Risk Analysis

Vulcan Materials disclosed 23 risk factors in its most recent earnings report. Vulcan Materials 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

Vulcan Materials Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
VMVMC
78
Outperform
$34.50B37.0312.10%0.75%-2.24%3.00%
EXEXP
76
Outperform
$6.41B14.2333.52%0.51%0.05%0.96%
MLMLM
75
Outperform
$32.72B31.2111.88%0.58%-0.54%-48.61%
CXCX
72
Outperform
$10.41B7.156.58%1.22%-8.41%570.14%
JHJHX
72
Outperform
$11.20B26.8921.05%-1.59%-15.58%
KNKNF
68
Neutral
$4.58B25.4713.76%2.48%2.22%
51
Neutral
$2.04B-1.26-21.09%3.98%2.91%-30.49%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
VMC
Vulcan Materials
261.18
7.51
2.96%
CX
Cemex SAB
6.90
0.49
7.64%
EXP
Eagle Materials
197.27
-30.24
-13.29%
JHX
James Hardie
25.80
-6.03
-18.94%
MLM
Martin Marietta Materials
542.79
-12.56
-2.26%
KNF
Knife River Corporation
82.54
11.09
15.52%

Vulcan Materials Corporate Events

Executive/Board ChangesShareholder Meetings
Vulcan Materials Holds Annual Shareholder Meeting
Neutral
May 12, 2025

On May 9, 2025, Vulcan Materials held its Annual Meeting where shareholders voted on several key proposals. The election of directors resulted in the appointment of Lydia H. Kennard, Kathleen L. Quirk, David P. Steiner, and Lee J. Styslinger, III to three-year terms. Additionally, the 2025 Omnibus Long-Term Incentive Plan was approved, as well as an advisory vote on executive compensation. The appointment of Deloitte & Touche LLP as the independent registered public accounting firm for 2025 was also ratified.

The most recent analyst rating on (VMC) stock is a Buy with a $297.00 price target. To see the full list of analyst forecasts on Vulcan Materials stock, see the VMC 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.