Core & Main (CNM) AI Stock Analysis

• Market Cap: $10.22B
• Dividend Yield: N/A
• Average Volume (3M): 2.16M
• Price to Earnings (P/E): 24.3
• Beta (1Y): 1.38
• Revenue Growth: 11.03%
• EPS Growth: -0.85%
• Country: US
• Employees: 5,700
• Sector: Industrials
• Sector Strength: 83
• Industry: Industrial - Distribution
• EPS (TTM): 0.33
• Shares Outstanding: 190,058,500
• 10 Day Avg. Volume: 1,249,213
• 30 Day Avg. Volume: 2,164,643
• PEG Ratio: N/A
• Price to Book (P/B): 5.43
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.73
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $58.55
• Price Target Upside: 13.38% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

Core & Main's overall stock score of 78 reflects its solid financial performance, marked by consistent revenue growth and profitability. Strong earnings call insights, with a focus on growth through strategic initiatives, further enhance the outlook. However, valuation concerns and technical indicators suggest a balanced risk-reward profile.

Positive Factors

Financial Performance

Net sales growth of 17.9% surpassed the expectations of both Wells Fargo and the Street.

Market Outlook

The early outlook for 2025 appears constructive, with share gains and stable pricing expected.

Shareholder Returns

Core & Main, Inc. has demonstrated commitment to shareholder returns with a $100 million share repurchase in Q3.

Negative Factors

Analyst Rating

The analyst reiterates an Underperform rating for CNM.

Guidance and Margins

The FY25 guidance for both revenue and EBITDA margins came in below the initial framework provided in 3Q.

Pricing Pressure

Pricing for plastic, iron, and steel pipes declined, which could put further downward pressure on CNM's gross margin.

Core & Main Business Overview & Revenue Model

Company Description

Core & Main, Inc. distributes water, wastewater, storm drainage, and fire protection products and related services to municipalities, private water companies, and professional contractors in the municipal, non-residential, and residential end markets in the United States. Its products include pipes, valves, hydrants, fittings, and other products and services; storm drainage products, such as corrugated piping systems, retention basins, inline drains, manholes, grates, geosynthetics, and other related products; fire protection products, including fire protection pipes, sprinkler heads and other devices, fire suppression systems, and related accessories, as well as fabrication services; and meter products, such as smart meter products, installation, software and other services. The company's specialty products and services are used in the maintenance, repair, replacement, and construction of water and fire protection infrastructure. Core & Main, Inc. was founded in 1874 and is headquartered in St. Louis, Missouri.

How the Company Makes Money

Core & Main generates revenue primarily through the sale and distribution of water, wastewater, storm drainage, and fire protection products. The company's key revenue streams include direct sales to municipal water utilities, private water companies, and professional contractors engaged in construction and maintenance of water and wastewater infrastructure. Core & Main benefits from its extensive network of distribution centers and a diverse supplier base, enabling it to offer a broad product portfolio and maintain strong relationships with manufacturers. Additionally, the company leverages its technical expertise and service capabilities to provide value-added solutions, such as product training and design support, further enhancing its revenue potential. Significant partnerships with manufacturers and its strategic presence in key geographic markets also contribute to Core & Main's financial performance.

Core & Main Financial Statement Overview

Summary

Core & Main displays strong financial performance with consistent revenue growth and solid profitability metrics. Although the company's net profit margin is moderate, it maintains a robust balance sheet with manageable leverage and effective cash flow generation. The potential for further profitability improvements is present.

Income Statement

Core & Main has demonstrated consistent revenue growth, highlighted by a 10.99% increase in the latest annual period. The gross profit margin remains strong at 26.6%, supported by steady EBIT and EBITDA margins of 9.66% and 11.81%, respectively. However, the net profit margin is moderate at 5.52%, indicating room for improvement in net profitability.

Balance Sheet

The company maintains a solid equity base with a debt-to-equity ratio of 1.48, suggesting a balanced leverage approach. The equity ratio stands at 28.92%, reflecting a good proportion of equity financing in its asset structure. Return on equity is robust at 24.21%, underscoring effective use of shareholders' capital, though the total debt level requires monitoring.

Cash Flow

Core & Main's cash flow generation is strong, with a substantial free cash flow that aligns closely with net income, yielding a free cash flow to net income ratio of 1.43. The operating cash flow to net income ratio is also healthy at 1.51, indicating efficient cash generation relative to earnings. The company has shown a focus on maintaining positive cash flow, although the recent year-over-year decline in operating cash flow warrants attention.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
7.44B	6.70B	6.65B	5.00B	3.64B
	Gross Profit
1.98B	1.82B	1.79B	1.28B	878.40M
	EBIT
719.00M	740.00M	775.00M	425.00M	185.50M
	EBITDA
913.00M	894.00M	924.00M	511.00M	319.00M
	Net Income Common Stockholders
411.00M	371.00M	581.00M	225.00M	37.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.00M	1.00M	177.00M	1.00M	380.90M
	Total Assets
5.87B	5.07B	4.91B	4.43B	3.59B
	Total Debt
2.51B	2.07B	1.63B	1.62B	2.39B
	Net Debt
2.50B	2.07B	1.46B	1.62B	2.01B
	Total Liabilities
4.10B	3.54B	2.50B	2.60B	2.92B
	Stockholders Equity
1.70B	1.45B	1.75B	1.32B	673.90M
Cash Flow		Free Cash Flow
586.00M	1.03B	376.00M	-51.00M	207.90M
	Operating Cash Flow
621.00M	1.07B	401.00M	-31.00M	219.80M
	Investing Cash Flow
-788.00M	-270.00M	-152.00M	-203.00M	-228.90M
	Financing Cash Flow
174.00M	-975.00M	-73.00M	-146.00M	209.10M

Core & Main Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 51.64
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNM, the sentiment is Positive. The current price of 51.64 is above the 20-day moving average (MA) of 51.17, above the 50-day MA of 49.33, and above the 200-day MA of 48.93, indicating a bullish trend. The MACD of 0.78 indicates Positive momentum. The RSI at 53.19 is Neutral, neither overbought nor oversold. The STOCH value of 31.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CNM.

Core & Main Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNM	78 Outperform	$10.22B	24.27	26.10%	―	11.03%	-0.85%
DXPE	78 Outperform	$1.44B	21.62	19.45%	―	11.94%	34.08%
AIT	75 Outperform	$8.40B	22.12	22.23%	0.71%	0.50%	4.48%
GIC	74 Outperform	$990.10M	16.25	22.15%	3.91%	-0.79%	-13.64%
WCC	71 Outperform	$7.75B	12.30	14.38%	1.04%	-1.80%	9.55%
MSM	70 Outperform	$4.25B	20.06	15.53%	4.43%	-5.71%	-31.93%
Sector *	64 Neutral	$4.30B	11.88	5.23%	249.82%	4.12%	-10.27%