Plastics Products, NEC
The AZEK Company Inc. engages in manufacturing and selling of building products for residential, commercial, and industrial markets in the United States. It operates through two segments: Residential and Commercial. The Residential segment designs and manufactures engineered outdoor living products, such as decking, railing, trim and molding, siding and cladding, pergolas and cabanas, and accessories under the TimberTech, AZEK Exteriors, VERSATEX, ULTRALOX, StruXure, and INTEX brands. The Commercial segment manufactures engineered polymer materials used in various industries, including outdoor, graphic displays and signage, educational, and recreational markets, as well as the industrial and chemical industries. This segment also offers bathroom partitions, shower and dressing stalls, lockers, storage solutions, extruded plastic sheet, and non-fabricated products under the Aria, Eclipse, Hiny Hiders, TuffTec, and Duralife brands. The company was formerly known as Delaware corporation and changed its name to The AZEK Company Inc. in June 2020. The AZEK Company Inc. was incorporated in 2013 and is headquartered in Chicago, Illinois.
Discounted Cash Flow Valuation of Azek Co Inc.
Growth
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Discount
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Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $263.9M | $343.1M | $436.5M | $543.2M | $661M | $785.8M | $912.4M | $1.034B | $1.143B | $1.232B | $1.294B | $12.94B |
DCF | $298.4M | $330.1M | $357.2M | $377.9M | $390.7M | $394.5M | $388.7M | $373.7M | $350.2M | $319.8M | $3.198B | |
Value | $6.779B |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 09-2018 | 09-2019 | 09-2020 | 09-2021 | 09-2022 | 09-2023 | TTM |
---|---|---|---|---|---|---|---|
Net Margin | 0.99% | -2.5% | -14% | 7.9% | 5.5% | 5% | 8.6% |
ROA | 2.9% | 3.3% | -1.1% | 6.5% | 5.4% | 5.5% | 8.7% |
ROE | 1.3% | -4.1% | -9.4% | 6.5% | 5.2% | 4.8% | 8.8% |
The average Net Margin over the past 5 years is +0.54%.
The trend of Net Margin over the past 5 years is +1.87%.
The average ROA over the past 5 years is +3.76%.
The trend of ROA over the past 5 years is +0.77%.
The average ROE over the past 5 years is +0.72%.
The trend of ROE over the past 5 years is +1.74%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 09-2018 | 09-2019 | 09-2020 | 09-2021 | 09-2022 | 09-2023 | TTM | |||
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | - | 35.52 | 168.83 | 14.36 | -9.31 | 2.19 | 2.27 | |||
Debt Equity | - | 2.31 | 0.36 | 0.33 | 0.42 | 0.42 | 0.44 | |||
MIN | ||||||||||
Graham Stability | - | - | - | - | - | 100% | 100% |
The Debt/FCF trailing twelve month is 2.27.
The trend of Debt/FCF over the past 5 years is -24.48.
Graham’s Stability measure stands at 1.00.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 09-2018 | 09-2020 | 09-2022 | Trend |
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Revenue | 15% | 15% | 1.1% | -2.9% |
Net Income | 59% | - | -9.7% | 9.6% |
Stockholders Equity | 23% | 3.1% | -1% | -16% |
FCF | 62% | 360% | - | 520% |
The Revenue CAGR over the past 5 years is +14.98%.
The trend of Revenue growth rate over the past 5 years is -2.9%.
The Earnings CAGR over the past 5 years is +58.73%.
The trend of Earnings growth rate over the past 5 years is +9.58%.
The Equity CAGR over the past 5 years is +23.11%.
The trend of Equity growth rate over the past 5 years is -16.08%.
The FCF CAGR over the past 5 years is +62.02%.
The trend of FCF growth rate over the past 5 years is +523.45%.