Beacon Roofing Supply Inc

BECN

Wholesale-Lumber & Other Construction Materials

Mkt Cap

$6.138B

PE

-131.15

Debt

$2.488B

Cash

$134.6M

EV

$8.491B

FCF

$418.1M

Market Cap

$6.138B

P/E Ratio

-131.15

Debt

$2.488B

Cash

$134.6M

EV

$8.491B

FCF

$418.1M

Charts data: {"Earnings":[{"time":"2014-09-29","value":53846000},{"time":"2015-09-29","value":62277000},{"time":"2016-09-29","value":89917000},{"time":"2017-09-29","value":100864000},{"time":"2018-09-29","value":98626000},{"time":"2019-09-29","value":-34600000},{"time":"2020-09-29","value":-104900000},{"time":"2022-12-30","value":379600000},{"time":"2023-12-30","value":-27600000}],"Sales":[{"time":"2014-09-29","value":2326905000},{"time":"2015-09-29","value":2515169000},{"time":"2016-09-29","value":4127109000},{"time":"2017-09-29","value":4376670000},{"time":"2018-09-29","value":6418311000},{"time":"2019-09-29","value":7105160000},{"time":"2020-09-29","value":6943900000},{"time":"2022-12-30","value":8429700000},{"time":"2023-12-30","value":9119800000}],"Net Margins":[{"time":"2014-09-29","value":0.023140609522090502},{"time":"2015-09-29","value":0.02476056280909951},{"time":"2016-09-29","value":0.02178692154726226},{"time":"2017-09-29","value":0.023045831648262263},{"time":"2018-09-29","value":0.015366347937954394},{"time":"2019-09-29","value":-0.004869700330464057},{"time":"2020-09-29","value":-0.015106784371894756},{"time":"2022-12-30","value":0.045031258526400705},{"time":"2023-12-30","value":-0.003026382157503454}],"Assets":[{"time":"2014-09-29","value":1433896000},{"time":"2015-09-29","value":1545912000},{"time":"2016-09-29","value":3113859000},{"time":"2017-09-29","value":3449557000},{"time":"2018-09-29","value":6508662000},{"time":"2019-09-29","value":6392812000},{"time":"2020-09-29","value":6957500000},{"time":"2022-12-30","value":6003500000},{"time":"2023-12-30","value":6207700000}],"Stockholders Equity":[{"time":"2014-09-29","value":817101000},{"time":"2015-09-29","value":883116000},{"time":"2016-09-29","value":1323827000},{"time":"2017-09-29","value":1781806000},{"time":"2018-09-29","value":1884305000},{"time":"2019-09-29","value":1862353000},{"time":"2020-09-29","value":1760900000},{"time":"2022-12-30","value":1904100000},{"time":"2023-12-30","value":1823500000}],"ROE":[{"time":"2014-09-29","value":0.06589883013238265},{"time":"2015-09-29","value":0.0705196146372617},{"time":"2016-09-29","value":0.06792201700071082},{"time":"2017-09-29","value":0.056607733950834155},{"time":"2018-09-29","value":0.05234078347189017},{"time":"2019-09-29","value":-0.018578647549632104},{"time":"2020-09-29","value":-0.05957180986995286},{"time":"2022-12-30","value":0.19935927734887873},{"time":"2023-12-30","value":-0.015135727995612832}],"ROA":[{"time":"2014-09-29","value":0.06894712029324303},{"time":"2015-09-29","value":0.07573587629826277},{"time":"2016-09-29","value":0.06582957031773115},{"time":"2017-09-29","value":0.06264456566451866},{"time":"2018-09-29","value":0.03143902694593758},{"time":"2019-09-29","value":0.023112207898496},{"time":"2020-09-29","value":0.005044915558749551},{"time":"2022-12-30","value":0.11716498709086366},{"time":"2023-12-30","value":0.11472848236867117}]}

Beacon Roofing Supply, Inc., together with its subsidiaries, engages in distribution of residential and non-residential roofing materials, and complementary building products to contractors, home builders, building owners, lumberyards, and retailers in the United States and Canada. It offers pitched roofing and low slope roof products; gutters and sidings; building materials, such as lumber and composite, skylights and window, plywood and OSB, decking and railing, and HVAC products; and foam board, spray foam, roll, batt, mineral wool, fiberglass, and commercial insulation products, as well as radiant barriers and blown-in insulation and equipment. The company also provides above grade and below grade membranes and coatings, deck and floor coatings, plaza deck waterproofing products, damp proofing coatings, and air and vapor barriers; tools and equipment, including power and hand tools, ladders and scaffolding, air tools and compressors, nails, screws and fasteners, generators, work wear and safety gear, job site supplies, tool bags and belts, welding and soldering, cleaning supplies, drill bits, and saw blades; and solar panels, mounting hardware, inverters, and storage and batteries. Beacon Roofing Supply, Inc. was founded in 1928 and is headquartered in Herndon, Virginia.

Sector

10-Q
9/30/23
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3/31/23
10-K
12/31/22
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12/31/18
10-K
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-Q
12/31/17

DCF

Discounted Cash Flow Valuation of Beacon Roofing Supply Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

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	$418.1M	$523.1M	$642.7M	$775.3M	$918M	$1.066B	$1.215B	$1.357B	$1.486B	$1.593B	$1.673B	$16.73B
DCF		$454.8M	$486M	$509.8M	$524.9M	$530.2M	$525.3M	$510.2M	$485.7M	$452.9M	$413.5M	$4.135B
Value	$9.028B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 18%

Earnings Stability -12%

Competitiveness and MOAT

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.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	09-2014	09-2015	09-2016	09-2017	09-2018	09-2019	09-2020	12-2022	12-2023	TTM
Net Margin	2.3%	2.5%	2.2%	2.3%	1.5%	-0.49%	-1.5%	4.5%	-0.3%	-0.5%
ROA	6.9%	7.6%	6.6%	6.3%	3.1%	2.3%	0.5%	12%	11%	10%
ROE	6.6%	7.1%	6.8%	5.7%	5.2%	-1.9%	-6%	20%	-1.5%	-2.5%

What is the average Net Margin?

The average Net Margin over the past 5 years is +1.01%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -0.15%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +5.9%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +1.43%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +3.58%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +0.12%.

Safety & Stabiliy

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.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	09-2014	09-2015	09-2016	09-2017	09-2018	09-2019	09-2020	12-2022	12-2023	TTM
Debt FCF	-	2.82	12.40	2.87	5.46	17.08	6.51	6.09	3.47	5.95
Debt Equity	0.34	0.28	0.88	0.44	1.43	1.43	1.59	1.00	1.27	1.35
MIN
Graham Stability	-	-	-	100%	100%	-36%	-190%	-	-34%	-190%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 5.95.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -0.16.

What is the Graham’s Stability?

Graham’s Stability measure stands at -1.91.

Growth

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.

Earnings growth has not been increasing in the past years.

Years	09-2015	09-2017	09-2019	12-2022	Trend
Revenue	20%	16%	8.7%	8.2%	-3.3%
Net Income	-	-	-	-	-8.6%
Stockholders Equity	11%	0.46%	-0.7%	-4.2%	-5%
FCF	33%	19%	62%	110%	-27%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +15.82%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -3.26%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -8.58%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +0.46%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -5.02%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +19.28%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -26.94%.