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AZZ Incorporated (AZZ)
:AZZ
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AZZ
(NYSE:AZZ)
70Outperform
Positive Factors
Financial Performance
Steady organic growth, operational efficiencies, and expanding free cash flow drive a Buy rating with a price target of $108.
Market Position
AZZ is the US leader in galvanizing and coating with significant market shares, providing opportunities for continued expansion.
Negative Factors
Market Uncertainty
Private sector project spending has reverted lower in recent months given heightened levels of market uncertainty.
Volume Growth
The 2FQ deceleration in volume growth is a partial offset to the margin gains given some concern over the sustainability of the elevated profitability profile.
AZZ (AZZ) vs. S&P 500 (SPY)
Market Cap
$2.69B
Dividend Yield0.76%
Average Volume (3M)246.13K
Price to Earnings (P/E)50.1
Beta (1Y)1.21
Revenue Growth2.61%
EPS Growth-53.74%
CountryUS
Employees3,684
SectorIndustrials
Sector Strength81
IndustryManufacturing - Metal Fabrication
Share Statistics
EPS (TTM)0.98
Shares Outstanding29,913,086
10 Day Avg. Volume291,245
30 Day Avg. Volume246,132
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.41
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit9.87
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$103.50Price Target Upside15.27% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
AZZ Business Overview & Revenue Model
Company DescriptionAZZ Inc. is a leading provider of metal coating solutions, welding solutions, electrical equipment, and highly engineered services to a wide range of industries including power generation, transmission, distribution, and the industrial sector. The company operates primarily through two segments: Metal Coatings and Infrastructure Solutions. With a focus on delivering durable and reliable products, AZZ serves customers globally, helping them enhance performance and extend the life of their valuable assets.
How the Company Makes MoneyAZZ Inc. generates revenue primarily through its two main business segments: Metal Coatings and Infrastructure Solutions. The Metal Coatings segment provides hot-dip galvanizing and powder coating services, which are essential for protecting metal from corrosion and enhancing durability. This segment services a diverse customer base, including steel fabricators, manufacturers, and the construction industry. The Infrastructure Solutions segment offers specialized products and services such as switchgear, electrical enclosures, and automation systems, catering to industries like power generation, transmission, and distribution. These solutions help in improving operational efficiency and safety for their clients. Additionally, AZZ maintains strategic partnerships and long-term contracts with key players in various sectors, contributing to stable and recurring revenue streams.
AZZ Financial Statement Overview
Summary
AZZ exhibits strong financial performance with significant revenue growth and profitability improvements. The company has a robust balance sheet with low leverage and effective debt management, despite slightly lower profit margins than the industry average. Cash flow generation is strong, but stability needs monitoring.Income Statement
AZZ has demonstrated strong revenue growth, with a notable increase from $902.66 million in 2022 to $1,577.74 million in 2025. The company maintains healthy profitability with a gross profit margin of approximately 24.25% in 2025 and a net profit margin of around 8.16%. Consistently improving EBIT and EBITDA margins indicate operational efficiency. However, the net profit margin is slightly lower than the industry average, suggesting room for improvement in cost management.78
Positive
Balance Sheet
AZZ's balance sheet reflects solid equity with an equity ratio of 46.94% in 2025, indicating a balanced capital structure. The debt-to-equity ratio has improved significantly from 1.22 in 2022 to 0.03 in 2025, showcasing effective debt management. The return on equity (ROE) is robust at 12.32% in 2025, highlighting strong shareholder returns. However, the company should ensure continued focus on maintaining low leverage to mitigate potential risks.72
Positive
Cash Flow
AZZ has shown a positive trend in free cash flow, with a free cash flow of $134.03 million in 2025, reflecting efficient capital expenditure management. The operating cash flow to net income ratio is favorable, indicating effective cash generation relative to income. However, the free cash flow growth rate has seen fluctuations, suggesting potential volatility in cash flow management that should be monitored closely.75
Positive
| Breakdown | ||||
| Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.58B | 1.54B | 1.32B | 902.66M | 838.92M | Gross Profit |
| 382.68M | 363.46M | 295.94M | 225.22M | 188.75M | EBIT |
| 236.36M | 221.60M | 102.89M | 66.28M | 36.04M | EBITDA |
| 334.17M | 316.59M | 252.06M | 111.47M | 105.25M | Net Income Common Stockholders |
| 128.83M | 101.61M | 66.34M | 84.02M | 39.61M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.49M | 4.35M | 2.82M | 15.08M | 14.84M | Total Assets |
| 2.23B | 2.20B | 2.22B | 1.13B | 996.44M | Total Debt |
| 879.13M | 977.23M | 1.06B | 233.80M | 178.42M | Net Debt |
| 877.64M | 972.88M | 1.06B | 218.72M | 163.58M | Total Liabilities |
| 1.18B | 1.26B | 1.37B | 465.66M | 373.15M | Stockholders Equity |
| 1.05B | 934.49M | 853.46M | 667.37M | 623.29M |
| Cash Flow | Free Cash Flow | |||
| 134.03M | 149.35M | 34.31M | 57.60M | 54.96M | Operating Cash Flow |
| 249.91M | 244.47M | 91.43M | 86.01M | 92.03M | Investing Cash Flow |
| -115.00M | -95.06M | -1.23B | -86.83M | -28.59M | Financing Cash Flow |
| -138.69M | -147.89M | 1.03B | 912.00K | -88.42M |
AZZ Technical Analysis
Positive
89.79
Price Trends
85.77
Positive
87.26
Positive
84.06
Positive
Market Momentum
1.18
Negative
60.32
Neutral
88.29
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AZZ, the sentiment is Positive. The current price of 89.79 is above the 20-day moving average (MA) of 83.08, above the 50-day MA of 85.77, and above the 200-day MA of 84.06, indicating a bullish trend. The MACD of 1.18 indicates Negative momentum. The RSI at 60.32 is Neutral, neither overbought nor oversold. The STOCH value of 88.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AZZ.
AZZ Risk Analysis
AZZ disclosed 38 risk factors in its most recent earnings report. AZZ reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
AZZ Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $679.79M | 30.37 | 6.61% | 0.34% | -0.33% | -7.06% | |
70 Outperform | $2.69B | 50.13 | 13.01% | 0.76% | 2.61% | -53.74% | |
67 Neutral | $372.40M | 11.52 | 9.13% | ― | 8.06% | 38.46% | |
66 Neutral | $2.60B | 43.48 | 6.56% | 1.29% | -69.82% | -78.10% | |
64 Neutral | $4.25B | 11.72 | 5.24% | 249.79% | 4.07% | -9.45% | |
61 Neutral | $268.72M | 10.65 | 10.78% | ― | -1.16% | 227.49% | |
56 Neutral | $680.63M | 37.86 | -0.78% | 3.64% | -9.04% | -108.47% |
* Industrials Sector Average
Performance Comparison
AZZ
AZZ
89.79
14.17
18.74%
IIIN
Insteel Industries
34.89
2.60
8.05%
NWPX
Northwest Pipe Company
37.70
1.49
4.11%
WOR
Worthington Industries
56.15
-1.65
-2.85%
RYI
Ryerson Holdings
21.14
-0.61
-2.80%
MEC
Mayville Engineering Company
13.16
-0.46
-3.38%
AZZ Earnings Call Summary
Earnings Call Date:Apr 21, 2025
(Q4-2025)
| % Change Since: 15.92%|
Next Earnings Date:Jul 09, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance for fiscal 2025 with record sales in the Coatings segment and significant debt reduction. However, challenges such as weather-related production losses and a decrease in Q4 sales were noted. The outlook for fiscal 2026 is positive with new facilities ramping up and continued debt reduction plans.Q4-2025 Updates
Positive Updates
Record Sales and Profitability in Coatings Segment
Coatings segment delivered record sales and profitability for fiscal 2025. Metal Coatings generated $665 million and Precoat Metals $912 million in sales.
Strong EBITDA Margins
Metal Coatings EBITDA margin of 30.9% and Precoat Metals EBITDA margin of 19.6% exceeded prior year comparables.
Significant Debt Reduction
The company paid down $110 million of debt in fiscal 2025, and plans to continue reducing debt in fiscal 2026.
New Facility Near St. Louis
A new greenfield facility near St. Louis, Missouri, is ramping up commercial production, expected to enhance capacity and revenue.
Positive Start to Fiscal 2026
Strong start in Q1 of fiscal 2026 with Metal Coatings recovering from Q4 weather impacts, and Precoat Metals ramping up production.
Negative Updates
Impact of Inclement Weather
Over 200 days of lost production in Q4 due to adverse weather conditions, impacting sales and production.
Decrease in Q4 Sales
Sales for Q4 were $351.9 million, down 4% from the same quarter in fiscal year 2024.
Interest Expense Challenges
Interest expense for the fourth quarter was $17.4 million, though down from the previous year, still a significant cost.
Company Guidance
During the AZZ Inc. Q4 FY 2025 earnings call, the company reported significant metrics and provided forward guidance. In FY 2025, Metal Coatings achieved sales of $665 million with an EBITDA margin of 30.9%, while Precoat Metals generated $912 million in sales with an EBITDA margin of 19.6%. The company's strong cash flow allowed for $110 million in debt reduction. AZZ plans continued debt reduction and is targeting bolt-on acquisitions in FY 2026. The guidance for FY 2026 includes expected sales of $1.625 billion to $1.725 billion, adjusted EBITDA of $360 million to $400 million, and adjusted earnings per share ranging from $5.50 to $6.10. The company also plans capital expenditures of $60 million to $80 million and anticipates debt paydowns exceeding $165 million, excluding proceeds from the Avail JV sale. Despite adverse weather impacting Q4, AZZ is optimistic about the year ahead, driven by infrastructure spending and potential acquisitions.AZZ Corporate Events
Business Operations and Strategy
AZZ Prepares Strategic Presentation for Stakeholders
Positive
Apr 25, 2025
On April 25, 2025, AZZ Inc. announced the preparation of presentation materials intended for use in discussions with various stakeholders, including investors and employees. These materials highlight AZZ’s strategic focus on reducing debt, improving leverage, and supporting high return on investment capital. The company has made significant strides in reducing its net leverage to 2.5x as of February 28, 2025, and plans to continue focusing on operational excellence and sustainability initiatives to drive long-term growth and shareholder value.
Spark’s Take on AZZ Stock
According to Spark, TipRanks’ AI Analyst, AZZ is a Outperform.
AZZ’s overall stock score reflects strong financial performance and an optimistic outlook from the latest earnings call, bolstered by record sales and effective debt reduction. However, mixed technical indicators and a high P/E ratio suggest caution. The valuation indicates potential overpricing, which could limit upside potential. Despite these concerns, the company’s strategic initiatives and financial health position it well for future growth in the industry.
To see Spark’s full report on AZZ stock, click here.
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.