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Valmont Industries (VMI)
NYSE:VMI
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Valmont
(NYSE:VMI)
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Rating:75Outperform
Price Target:
$535.00
â–²(15.52% Upside)
Action:ReiteratedDate:02/18/26
Overall score reflects strong technical uptrend and a solid fundamental backdrop (earnings rebound and much lower leverage), reinforced by upbeat 2026 guidance and backlog strength. The main constraint is valuation (high P/E and low yield), with cash-flow volatility and segment-specific risks (Agriculture/Brazil and working-capital pressure) as secondary offsets.
Positive Factors
Utility backlog & capacity
A growing $1.5B backlog and 21% Utility sales growth signal durable end-market demand and a multi-quarter revenue runway. Combined with targeted capacity additions, backlog conversion should sustainably underpin top-line growth and utilization, reducing revenue cyclicality over the medium term.
Material de‑leveraging
Sharp reduction in leverage materially improves financial flexibility and lowers bankruptcy and refinancing risk. With low net leverage, management can fund capacity, weather cyclical headwinds, and sustain buybacks or dividends without forcing distressed asset sales, strengthening long-term stability.
Strong cash generation
Consistent operating cash flow and high free‑cash‑flow conversion provide durable internal funding for CapEx, M&A and shareholder returns. This cash generation supports multi-year utility investments with high incremental margins and enables disciplined capital allocation even if revenues fluctuate.
Negative Factors
Brazil/agriculture charges
Significant Brazil-related legal reserves and credit losses are a structural headwind for the Agriculture segment and raise receivables and risk-profile questions. These charges erode margins, necessitate reserves and reduce near-term earnings visibility until legal and credit issues are resolved.
Cash-flow volatility
Material year-to-year swings in free cash flow and operating cash translate into uncertainty for discretionary spending and buybacks. Volatility—driven by working-capital swings and lumpy investments—can force capital-allocation tradeoffs and raises the chance of lower near-term shareholder distributions.
Working-capital & execution risks
Higher contract assets and strained working capital from ramping Utility projects can tie up liquidity and compress free cash flow while projects complete. Combined with tariff, commodity and execution risks, this raises the likelihood of delayed cash conversion and margin pressure during capacity buildouts.
Valmont (VMI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.12B
Dividend Yield0.63%
Average Volume (3M)132.62K
Price to Earnings (P/E)27.2
Beta (1Y)0.99
Revenue Growth1.23%
EPS Growth-22.77%
CountryUS
Employees10,986
SectorIndustrials
Sector Strength72
IndustryConglomerates
Share Statistics
EPS (TTM)4.92
Shares Outstanding19,699,638
10 Day Avg. Volume163,284
30 Day Avg. Volume132,616
Financial Highlights & Ratios
PEG Ratio10.34
Price to Book (P/B)5.00
Price to Sales (P/S)1.99
P/FCF Ratio26.20
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue2.43
Enterprise Value/Gross Profit8.06
Enterprise Value/Ebitda18.92
Forecast
1Y Price Target
$487.00Price Target Upside5.16% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 generates revenue through multiple key streams. The primary source of income comes from the sale of engineered steel and aluminum products, which cater to sectors such as telecommunications, energy, and transportation. This includes the production of utility poles, towers, and traffic management systems. Additionally, Valmont's agricultural division contributes significantly to earnings through the sale of irrigation equipment and systems designed to optimize crop yields. The company also earns revenue from its coating services, which involve applying protective coatings to metal structures to prevent corrosion and damage. Strategic partnerships with utility companies, agricultural firms, and municipalities further bolster Valmont's market position and revenue generation capabilities. Overall, Valmont's diversified product offerings and strategic market presence enable it to capitalize on demand across various industries.
Valmont Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 16, 2026
Earnings Call Sentiment Positive
The call presents a largely positive outlook driven by strong Infrastructure performance—especially Utility—robust cash generation, disciplined capital allocation, strategic acquisitions and constructive 2026 guidance. Headwinds remain in Agriculture (notably Brazil), some near-term pressure in Lighting & Transportation, and execution/ tariff risks that could impact outcomes. Management emphasizes they have accrued for Brazil exposures and expect Agriculture margins to recover in early 2026. On balance, the positive operational momentum and financial strength outweigh the localized challenges.Q4-2025 Updates
Positive Updates
Strong Adjusted Earnings Performance
Adjusted diluted EPS of $4.92 in Q4, up 28.1% year-over-year; full-year adjusted diluted EPS of $19.09, up 11.1% versus 2024 (GAAP EPS $9.05 included a $78.5M / $3.98 per share tax benefit excluded from adjusted EPS).
Infrastructure Revenue and Utility Strength
Infrastructure sales of $819M in Q4, up 7.2% year-over-year; Utility sales grew 21% driven by favorable pricing, higher volumes and capacity increases; backlog entering 2026 of $1.5B, up 22% year-over-year, largely driven by Utility.
Improved Profitability and Operating Income
Q4 operating income was $149.6M (18.3% of net sales), a 230 basis point improvement driven by pricing, volume in high-value offerings and lower SG&A; full-year operating income $538M (13.1% of revenue) — would be $588M (14.3%) excluding $50M of Brazil-related charges.
Strong Cash Generation and Conservative Leverage
Full-year operating cash flow $457M; Q4 operating cash flow $111M; free cash flow $311M (~90% of net earnings); year-end cash approximately $187M and net debt leverage approximately 1x.
Disciplined Capital Allocation and Shareholder Returns
Deployed $102M to acquire minority JV interests and returned $250M to shareholders (dividends $52M, share repurchases $198M at an average price of $327.65); executed ~$200M of the Board-authorized $700M repurchase program in 2025.
Targeted Capacity Investments with High Incremental Margins
Invested ~$145M CapEx in 2025 (primarily for Utility capacity); planned 2026 CapEx of $170M–$200M directed at Utility capacity expansion; management cites incremental margins on new Utility capacity in mid- to upper-20% range and approaching 30%.
Strategic Acquisitions and Tech Investment
Acquired remaining 40% of ConcealFab and remaining 80% of Rational Mind (strengthening telecom and advanced irrigation controls capability); launched ICON+ control panels and deployed AI-enabled scheduling tools to improve throughput.
2026 Guidance Reflects Growth
2026 guidance: net sales $4.2B–$4.4B and diluted EPS $20.50–$23.50; midpoint implies ~4.8% revenue growth and ~15.2% EPS growth year-over-year, with upside tied to additional Utility revenue and/or improved Ag market conditions.
Negative Updates
Agriculture Revenue Decline
Q4 Agriculture sales $222.7M, down 19.9% year-over-year; international weakness (notably Brazil) and lower project sales in the Middle East contributed to the decline.
Significant Brazil-Related Charges and Credit Losses
Full-year Brazil Agriculture expenses totaled ~$50M (approximately $24M legal reserves and $26M credit losses); Q4 included $16.5M legal reserve and $11M credit losses; these items reduced adjusted EPS by $0.92 in Q4 and $1.70 for the year.
Agriculture Segment Profitability Pressures
Agriculture had a Q4 operating loss of $3.3M that included legal reserves and credit losses; excluding those items, Q4 Ag operating income was $24.1M (10.9% of sales), and management expects margins to recover to double digits in Q1 2026.
Lighting & Transportation Near-Term Weakness
Q4 Lighting & Transportation sales declined 5.3% due to Asia Pacific weakness and North America production challenges that temporarily reduced output; management expects production issues to be resolved in H1 2026.
Exposure to External Risks and Execution Delays
Management highlighted risks that could push results to the low end of guidance: unanticipated delays in capacity expansion (equipment or construction), tariff changes affecting supply chains/pricing, commodity and steel cost volatility.
Working Capital Growing Pains
Elevated contract assets (work-in-process) due to higher Utility volume noted as a working capital pressure point; management expects improvement but flagged it as an operational area to manage down.
Company Guidance
Valmont guided 2026 net sales of $4.2–$4.4 billion and diluted EPS of $20.50–$23.50 (midpoint implying ~4.8% revenue growth and ~15.2% EPS growth versus 2025 adjusted EPS of $19.09), with year‑over‑year growth expected in Q1; management cited a $1.5 billion backlog (up 22% y/y) and assumed roughly $150 million of incremental Utility revenue in 2026 driven by capacity additions, with incremental margins in the mid‑to‑upper‑20% range (approaching 30%). Planned 2026 CapEx is $170–$200 million (vs $145 million in 2025) largely for Utility; Agriculture is expected to return to double‑digit operating margins in Q1 (low‑teens initially, mid‑teens by year‑end). The company expects its adjusted tax rate to normalize to ~26%, ended 2025 with ~$187 million cash and ~1x net leverage, generated $457 million operating cash flow and $311 million free cash flow in 2025, and reiterated a multi‑year target to deliver $500–$700 million in revenue growth and $25–$30 in EPS over the next 3–4 years.Valmont Financial Statement Overview
Summary
Financial statements show a healthy overall profile: earnings rebounded strongly after 2023 weakness and leverage improved materially by 2025 (debt-to-equity falling sharply). Offsetting factors include uneven revenue growth, notable cash-flow volatility (including a sharp 2025 free-cash-flow decline vs 2024), and some reduced metric clarity in the latest period.Income Statement
Revenue has been relatively stable over the last several years (down in 2023–2024, modestly up in 2025), while profitability improved meaningfully from 2023 to 2024 (net income rising from ~$143M to ~$348M with solid margins in 2024). Strengths include generally healthy operating profitability and a rebound in earnings power after a weaker 2023. Weaknesses include uneven top-line growth and missing margin data for 2025, which limits visibility into the most recent profitability profile.73
Positive
Balance Sheet
Leverage improved substantially, with total debt falling sharply by 2025 and the debt load looking very manageable relative to equity (debt-to-equity drops from ~0.94 in 2023 to ~0.56 in 2024 and ~0.04 in 2025). This de-risking strengthens financial flexibility and reduces downside sensitivity. A key weakness is limited data quality/consistency in 2025 balance sheet fields (e.g., assets and equity align unusually closely and return on equity is not provided), which adds some uncertainty despite the clearly positive leverage trend.82
Very Positive
Cash Flow
Cash generation is generally solid, with positive operating cash flow and free cash flow in most years and strong conversion versus earnings in 2022–2024 (free cash flow running at roughly 68%–86% of net income). However, cash flow has been volatile: 2021 posted weak operating cash flow and negative free cash flow, and 2025 free cash flow declined sharply versus 2024 (down ~35%), signaling potential working-capital or investment swings that can pressure near-term cash returns.68
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.10B | 4.08B | 4.17B | 4.35B | 3.50B |
| Gross Profit | 1.24B | 1.24B | 1.24B | 1.13B | 883.89M |
| EBITDA | 506.60M | 622.80M | 391.97M | 508.59M | 395.27M |
| Net Income | 350.27M | 348.26M | 143.47M | 250.86M | 195.63M |
Balance Sheet | |||||
| Total Assets | 3.37B | 3.33B | 3.48B | 3.56B | 3.45B |
| Cash, Cash Equivalents and Short-Term Investments | 187.14M | 164.31M | 203.04M | 185.41M | 177.23M |
| Total Debt | 1.06B | 866.84M | 1.27B | 1.03B | 1.11B |
| Total Liabilities | 1.73B | 1.74B | 2.06B | 1.92B | 2.03B |
| Stockholders Equity | 1.63B | 1.54B | 1.35B | 1.58B | 1.39B |
Cash Flow | |||||
| Free Cash Flow | 311.45M | 493.23M | 210.00M | 232.98M | -41.85M |
| Operating Cash Flow | 456.48M | 572.68M | 306.77M | 326.26M | 65.94M |
| Investing Cash Flow | -244.51M | -78.88M | -115.28M | -132.08M | -417.31M |
| Financing Cash Flow | -197.09M | -522.56M | -176.41M | -181.91M | 133.50M |
Valmont Technical Analysis
Positive
463.12
Price Trends
437.72
Positive
421.23
Positive
384.12
Positive
Market Momentum
7.16
Positive
54.47
Neutral
52.27
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VMI, the sentiment is Positive. The current price of 463.12 is above the 20-day moving average (MA) of 460.50, above the 50-day MA of 437.72, and above the 200-day MA of 384.12, indicating a bullish trend. The MACD of 7.16 indicates Positive momentum. The RSI at 54.47 is Neutral, neither overbought nor oversold. The STOCH value of 52.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $9.12B | 27.24 | 20.41% | 0.63% | 1.23% | -22.77% | |
70 Outperform | $154.86B | 33.04 | 31.71% | 2.24% | 7.48% | 9.55% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
55 Neutral | $87.67B | 27.70 | 76.08% | 1.82% | -13.09% | -20.63% |
* Industrials Sector Average
VMI
Valmont
463.12
118.32
34.32%
MMM
3M
166.46
22.57
15.69%
HON
Honeywell International
243.61
48.14
24.63%
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.