Valmont (VMI) AI Stock Analysis

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Valmont

(NYSE:VMI)

74Outperform

Valmont Industries maintains a strong financial position with solid profit margins and low leverage, supported by efficient cash flow management. Technical indicators suggest caution due to bearish momentum, but the fair valuation and positive earnings call outlook highlight strategic growth potential. Challenges in specific sectors are mitigated by robust demand in telecommunications and utility segments.

Positive Factors

International Market Growth

Valmont has seen positive trends in the company’s international markets, with Brazil’s volume returning to growth and the $45 million project in the Middle East remaining on track.

Management Strategy

Management reaffirmed full-year guidance and stated that Valmont should be cost-neutral on tariffs for the full year, despite a $3 million headwind in the first quarter.

Operational Efficiency

Notable internal operational initiatives under new management have enhanced margins and driven more consistent financial performance.

Negative Factors

Agricultural Sector Challenges

Prevailing headwinds in Agriculture could limit share price growth over the near term.

Tariff Impact

Tariffs creating uncertainty for Valmont Industries.

Valmont (VMI) vs. S&P 500 (SPY)

Market Cap

$5.69B

Dividend Yield0.84%

Average Volume (3M)192.98K

Price to Earnings (P/E)16.5

Beta (1Y)0.96

Revenue Growth-0.57%

EPS Growth116.12%

CountryUS

Employees10,986

SectorIndustrials

Sector Strength75

IndustryConglomerates

Share Statistics

EPS (TTM)3.84

Shares Outstanding20,070,906

10 Day Avg. Volume198,720

30 Day Avg. Volume192,981

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.40

Price to Cash Flow (P/CF)7.40

P/FCF Ratio7.40

Enterprise Value/Market Cap1.18

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit5.43

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$345.00

Price Target Upside17.66% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Valmont Business Overview & Revenue Model

Company DescriptionValmont Industries, Inc. produces and sells fabricated metal products in the United States, Australia, Brazil, Denmark, and internationally. It operates through two segments: Infrastructure and Agriculture. The company manufactures and distributes engineered metal, steel, wood, aluminum, and composite poles, towers, and components for lighting, traffic, and wireless communication markets; engineered access systems; integrated structure solutions for smart cities; and highway safety products. It also offers engineered steel and concrete pole structures for utility transmission, distribution, substations, and renewable energy generation equipment; and inspection services. In addition, the company provides hot-dipped galvanizing, anodizing, and powder coating services to preserve and protect metal products; and water management solutions and technology for precision agriculture. Further, it manufactures and distributes mechanical irrigation equipment, and related parts and services under the Valley brand name for the agricultural industry; and tubular products for industrial customers. The company serves municipalities and government entities, commercial lighting fixtures manufacturing companies, contractors, telecommunications and utility companies, and large farms, as well as the general manufacturing sector. Valmont Industries, Inc. was founded in 1946 and is headquartered in Omaha, Nebraska.

How the Company Makes MoneyValmont Industries generates revenue through multiple streams. A significant portion comes from its infrastructure segment, where it sells engineered metal products used in utility, lighting, and wireless communication structures. The company also earns substantial income from its agriculture segment, primarily through the sale of mechanized irrigation systems which are essential for efficient water use in farming. Additionally, Valmont's coatings business provides protective services to extend the life and performance of metal products, contributing to its earnings. Strategic partnerships and contracts with government bodies and private sector clients further bolster its revenue, as do its operations in international markets, which provide a diversified income base.

Valmont Financial Statement Overview

Summary

Valmont's financial performance is strong, with a robust cash flow and improved profitability despite past revenue declines. The balance sheet indicates stability with a good equity position and effective debt management, contributing positively to the overall financial health.

Income Statement

Positive

Valmont has demonstrated strong financial performance with a steady increase in gross profit margin, rising to 30.46% in the latest year. Despite a slight decline in total revenue from the previous year, net profit margin improved significantly to 8.55%, indicating enhanced cost management. EBIT and EBITDA margins also reflect robust operational efficiency, contributing positively to the company's profitability.

Balance Sheet

Positive

The balance sheet shows a solid equity position with an equity ratio of 46.30%, indicating financial stability. The debt-to-equity ratio has improved significantly, showcasing effective debt management. Return on equity increased to 22.58%, highlighting efficient use of shareholders' equity to generate profits.

Cash Flow

Very Positive

The robust free cash flow growth rate of 134.92% and substantial operating cash flow to net income ratio of 1.64 demonstrate strong cash generation capabilities. The company effectively converts its earnings into cash, supporting its financial health and providing flexibility for future investments.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.08B	4.17B	4.35B	3.50B	2.90B
	Gross Profit
1.24B	1.24B	1.13B	883.89M	765.51M
	EBIT
524.58M	291.56M	433.25M	286.79M	225.95M
	EBITDA
524.58M	393.72M	540.50M	421.84M	355.94M
	Net Income Common Stockholders
348.26M	150.85M	250.86M	195.63M	140.69M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
164.31M	203.04M	185.41M	177.23M	400.73M
	Total Assets
3.33B	3.48B	3.56B	3.45B	2.96B
	Total Debt
136.90M	1.27B	1.03B	1.11B	766.33M
	Net Debt
-27.42M	1.07B	848.04M	935.92M	365.60M
	Total Liabilities
1.74B	2.06B	1.92B	2.03B	1.75B
	Stockholders Equity
1.54B	1.35B	1.64B	1.41B	1.21B
Cash Flow		Free Cash Flow
493.23M	210.00M	232.98M	-41.85M	209.59M
	Operating Cash Flow
572.68M	306.77M	326.26M	65.94M	316.29M
	Investing Cash Flow
-78.88M	-115.28M	-132.08M	-417.31M	-104.03M
	Financing Cash Flow
-522.56M	-176.41M	-181.91M	133.50M	-173.76M

Valmont Technical Analysis

Technical Analysis Sentiment

Negative

Last Price293.22

Price Trends

50DMA

307.34

Negative

100DMA

315.57

Negative

200DMA

307.09

Negative

Market Momentum

MACD

-2.55

Negative

RSI

51.24

Neutral

STOCH

85.88

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VMI, the sentiment is Negative. The current price of 293.22 is above the 20-day moving average (MA) of 282.32, below the 50-day MA of 307.34, and below the 200-day MA of 307.09, indicating a neutral trend. The MACD of -2.55 indicates Negative momentum. The RSI at 51.24 is Neutral, neither overbought nor oversold. The STOCH value of 85.88 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VMI.

Valmont Risk Analysis

Valmont disclosed 19 risk factors in its most recent earnings report. Valmont 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

Valmont Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HON	76 Outperform	$135.28B	24.19	33.56%	2.10%	6.30%	0.81%
VMI	74 Outperform	$5.69B	16.51	22.84%	0.84%	-0.57%	116.12%
GFF	70 Outperform	$3.28B	14.08	93.05%	0.97%	-2.47%	249.49%
MDU	68 Neutral	$3.50B	12.48	10.51%	3.00%	-22.50%	-32.26%
Sector *	63 Neutral	$4.23B	11.54	5.34%	209.77%	4.14%	-9.49%
MMM	61 Neutral	$74.76B	17.55	94.75%	2.04%	-24.93%	―
SEB	55 Neutral	$2.51B	25.62	2.09%	0.35%	-0.31%	-58.07%

* Industrials Sector Average

Performance Comparison

VMI

Valmont

298.71

56.21

23.18%

MMM

137.90

43.25

45.69%

GFF

Griffon

69.07

0.99

1.45%

HON

Honeywell International

210.74

21.12

11.14%

MDU

Mdu Resources Group

17.34

3.79

27.97%

SEB

Seaboard

2,571.13

-693.98

-21.25%

Valmont Earnings Call Summary

Earnings Call Date:Apr 22, 2025

(Q1-2025)

% Change Since: 8.79%|

Next Earnings Date:Jul 16, 2025

Earnings Call Sentiment Positive

Despite some challenges in the solar sector and North American agriculture, Valmont Industries demonstrated a strong performance in telecommunications and utility segments, with effective cost mitigation strategies keeping them on track for a positive year. The company is strategically investing in capacity expansions and expects to be cost-neutral with respect to tariffs, maintaining a strong financial outlook.

Q1-2025 Updates

Positive Updates

Strong Backlog and Stable Financial Performance

Valmont reported a growing backlog of $1.5 billion, indicating healthy demand. Despite a slight decrease in consolidated net sales, they increased modestly on a constant currency basis, with operating margins and earnings per share remaining stable.

Telecommunications Segment Growth

Telecom sales saw a strong increase of nearly 30%, driven by favorable carrier spending and ongoing 5G network expansions.

Successful Cost Mitigation Strategies

Valmont expects to be cost-neutral regarding tariffs for the fiscal year due to effective pricing strategies and supply chain adjustments, including increased use of US-sourced steel.

Capacity Expansion and Investment

Valmont invested $30 million in CapEx to increase utility production, with expansions in Brenham, Texas, and equipment upgrades in Florida and Kansas progressing as planned.

Positive Outlook for Brazilian Market

Early signs of market stabilization in Brazil, with a return to volume growth and encouraging order activity.

Negative Updates

Decline in Solar Sales

Solar sales declined by more than 50%, reflecting lower volumes and the strategic decision to exit low-margin projects.

Challenging North American Agriculture Market

Lower crop prices have pressured global agricultural markets, with North American irrigation equipment volumes and selling prices lower due to market softness.

Lower First Quarter Net Sales

First quarter net sales of $969.3 million decreased by 0.9% year over year, primarily due to softer international markets and a strategic shift impacting concrete distribution structures.

Gross Margin Pressure

Gross margin decreased by 130 basis points from the prior year, mainly due to a higher mix of lower-margin international agricultural projects.

Company Guidance

During the Valmont Industries First Quarter 2025 Earnings Conference Call, a range of guidance metrics were provided, highlighting the company's robust performance and strategic initiatives. The company reported a backlog of $1.5 billion, indicating healthy order activity and volume growth. First quarter net sales were $969.3 million, a slight 0.9% decrease year-over-year, although sales increased modestly on a constant currency basis. Valmont's gross margin was reported at 30%, down by 130 basis points from the previous year, primarily due to a higher mix of international projects in the agriculture segment, while diluted earnings per share stood at $4.32, in line with the prior year. The company reaffirmed its full-year expectations with projected net sales between $4.0 and $4.2 billion and diluted earnings per share expected to range from $17.20 to $18.80, with an expectation to land above the midpoint. Additionally, Valmont emphasized its strategic capital investments, including approximately $30 million in CapEx during the first quarter, aimed at expanding utility production and enhancing capacity across its footprint. The company also outlined cost management efforts, projecting that comprehensive plans to mitigate tariffs could lead to a cost-neutral impact for the year. Despite a challenging macroeconomic environment, Valmont Industries remains confident in its ability to deliver strong results, bolstered by strategic growth initiatives and a focus on long-term market trends.

Valmont Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Valmont Expands Board with Experienced Executive Appointment

Positive

Oct 28, 2024

Valmont Industries, Inc., a leader in infrastructure and agricultural productivity, has appointed Deborah Caplan to its Board of Directors, expanding the board to eleven members. Caplan, a seasoned executive with extensive experience from NextEra Energy and General Electric, is expected to enhance Valmont’s leadership and governance. Her expertise in talent development and operational excellence aligns with Valmont’s strategic goals of market expansion and innovation, promising long-term value for the company’s shareholders.

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.