Quanex Building Products Corp

NX

Rolling Drawing & Extruding of Nonferrous Metals

Mkt Cap

$1.046B

PE

12.05

Debt

$64.09M

Cash

$44.42M

EV

$1.066B

FCF

$192.8M

Market Cap

$1.046B

P/E Ratio

12.05

Debt

$64.09M

Cash

$44.42M

EV

$1.066B

FCF

$192.8M

Charts data: {"Earnings":[{"time":"2014-10-30","value":29234000},{"time":"2015-10-30","value":16093000},{"time":"2016-10-30","value":-1859000},{"time":"2017-10-30","value":18683000},{"time":"2018-10-30","value":26328000},{"time":"2019-10-30","value":-46730000},{"time":"2020-10-30","value":38496000},{"time":"2021-10-30","value":56980000},{"time":"2022-10-30","value":88336000},{"time":"2023-10-30","value":82501000}],"Sales":[{"time":"2014-10-30","value":595384000},{"time":"2015-10-30","value":645528000},{"time":"2016-10-30","value":928184000},{"time":"2017-10-30","value":866555000},{"time":"2018-10-30","value":889785000},{"time":"2019-10-30","value":893841000},{"time":"2020-10-30","value":851573000},{"time":"2021-10-30","value":1072149000},{"time":"2022-10-30","value":1221502000},{"time":"2023-10-30","value":1130583000}],"Net Margins":[{"time":"2014-10-30","value":0.04910108434220604},{"time":"2015-10-30","value":0.024929979799481975},{"time":"2016-10-30","value":-0.002002835644656663},{"time":"2017-10-30","value":0.02156008562641725},{"time":"2018-10-30","value":0.029589170417572783},{"time":"2019-10-30","value":-0.05227999163162128},{"time":"2020-10-30","value":0.045205754527210235},{"time":"2021-10-30","value":0.05314559823308141},{"time":"2022-10-30","value":0.0723175238354092},{"time":"2023-10-30","value":0.07297208608302089}],"Assets":[{"time":"2014-10-30","value":517113000},{"time":"2015-10-30","value":572031000},{"time":"2016-10-30","value":780353000},{"time":"2017-10-30","value":773879000},{"time":"2018-10-30","value":741849000},{"time":"2019-10-30","value":645110000},{"time":"2020-10-30","value":691585000},{"time":"2021-10-30","value":717323000},{"time":"2022-10-30","value":724617000},{"time":"2023-10-30","value":831143000}],"Stockholders Equity":[{"time":"2014-10-30","value":420920000},{"time":"2015-10-30","value":395295000},{"time":"2016-10-30","value":367831000},{"time":"2017-10-30","value":406847000},{"time":"2018-10-30","value":394152000},{"time":"2019-10-30","value":330187000},{"time":"2020-10-30","value":355759000},{"time":"2021-10-30","value":419782000},{"time":"2022-10-30","value":464835000},{"time":"2023-10-30","value":545554000}],"ROE":[{"time":"2014-10-30","value":0.06945262757768697},{"time":"2015-10-30","value":0.040711367459745254},{"time":"2016-10-30","value":-0.005053951407032034},{"time":"2017-10-30","value":0.045921439754993895},{"time":"2018-10-30","value":0.06679656579187725},{"time":"2019-10-30","value":-0.14152586261724417},{"time":"2020-10-30","value":0.10820808468654342},{"time":"2021-10-30","value":0.1357371206959803},{"time":"2022-10-30","value":0.1900373250723375},{"time":"2023-10-30","value":0.15122426010990664}],"ROA":[{"time":"2014-10-30","value":0.02778502957767451},{"time":"2015-10-30","value":0.04313577411014438},{"time":"2016-10-30","value":0.04658532740951851},{"time":"2017-10-30","value":0.06796282106117364},{"time":"2018-10-30","value":0.04927283045471518},{"time":"2019-10-30","value":-0.04078529243074824},{"time":"2020-10-30","value":0.07991064005147595},{"time":"2021-10-30","value":0.11413268499685637},{"time":"2022-10-30","value":0.15357216294953058},{"time":"2023-10-30","value":0.13319127996024752}]}

Quanex Building Products Corporation, together with its subsidiaries, provides components for the fenestration industry in the United States, Europe, Canada, Asia, and internationally. The company operates through three segments: North American Fenestration, European Fenestration, and North American Cabinet Components. It offers flexible insulating glass spacers, extruded vinyl profiles, window and door screens, and precision-formed metal and wood products, as well as cabinet doors and other components for original equipment manufacturers (OEMs) in the kitchen and bathroom cabinet industry. In addition, the company provides various non-fenestration components and products, including solar panel sealants, trim moldings, vinyl decking, fencing, water retention barriers, and conservatory roof components. It sells its products to OEMs in the building products industry through sales representatives, direct sales force, distributors, and independent sales agents. Quanex Building Products Corporation was founded in 1927 and is based in Houston, Texas.

Sector

10-Q
7/31/23
10-Q
4/30/23
10-Q
1/31/23
10-K
10/31/22
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4/30/22
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1/31/22
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10/31/21
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10/31/20
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10-K
10/31/19
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4/30/19
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1/31/19
10-K
10/31/18
10-Q
7/31/18
10-Q
4/30/18
10-Q
1/31/18

DCF

Discounted Cash Flow Valuation of Quanex Building Products Corp

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	$192.8M	$207.3M	$222.3M	$237.8M	$253.7M	$269.9M	$286.5M	$303.2M	$320.1M	$337M	$353.8M	$3.538B
DCF		$180.3M	$168.1M	$156.4M	$145.1M	$134.2M	$123.8M	$114M	$104.6M	$95.78M	$87.45M	$874.5M
Value	$2.184B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 37%

Earnings Stability 44%

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	10-2015	10-2016	10-2017	10-2018	10-2019	10-2020	10-2021	10-2022	10-2023	TTM
Net Margin	2.5%	-0.2%	2.2%	3%	-5.2%	4.5%	5.3%	7.2%	7.3%	7.8%
ROA	4.3%	4.7%	6.8%	4.9%	-4.1%	8%	11%	15%	13%	14%
ROE	4.1%	-0.51%	4.6%	6.7%	-14%	11%	14%	19%	15%	16%

What is the average Net Margin?

The average Net Margin over the past 5 years is +3.68%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +1.71%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +8.15%.

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

The trend of ROA over the past 5 years is +2.96%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +8.51%.

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

The trend of ROE over the past 5 years is +4.13%.

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.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

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

Years	10-2015	10-2016	10-2017	10-2018	10-2019	10-2020	10-2021	10-2022	10-2023	TTM
Debt FCF	1.55	5.62	5.35	2.70	2.20	1.56	0.97	0.47	0.63	0.33
Debt Equity	0.15	0.75	0.59	0.53	0.48	0.33	0.13	0.07	0.13	0.12
MIN
Graham Stability	-	-	100%	100%	-320%	-	100%	100%	100%	-320%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 0.33.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -0.46.

What is the Graham’s Stability?

Graham’s Stability measure stands at -3.25.

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 been increasing in past years.

Years	10-2016	10-2018	10-2020	10-2022	Trend
Revenue	2.9%	4.9%	9.9%	-7.4%	-1.6%
Net Income	-	26%	29%	-6.6%	7%
Stockholders Equity	5.8%	6.7%	15%	17%	2.9%
FCF	12%	7%	13%	69%	1.2%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +4.91%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -1.59%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +25.66%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +7%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +6.72%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +2.87%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +7.02%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +1.23%.