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Core & Main, Inc. Class A (CNM)
:CNM
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Core & Main
(NYSE:CNM)
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Rating:61Neutral
Price Target:
$52.00
▲(1.82% Upside)
Core & Main's overall stock score reflects strong financial performance and strategic growth initiatives. However, bearish technical indicators and revised downward guidance from the earnings call weigh on the score. The moderate valuation and absence of a dividend yield further contribute to a cautious outlook.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong demand in municipal infrastructure projects, supporting long-term business expansion and market penetration.
Market Share Gains
Gaining market share in specialized projects reflects Core & Main's competitive advantage in technical expertise and execution, bolstering its industry position.
Canadian Expansion
Expanding into the Canadian market diversifies revenue streams and opens new growth opportunities, enhancing Core & Main's geographic reach and market potential.
Negative Factors
Residential Market Decline
A decline in the residential market, particularly in high-growth areas, could impact revenue and margins, as this segment represents a significant portion of sales.
Elevated Operating Costs
Increased operating costs can pressure margins and profitability, potentially limiting the company's ability to invest in growth and innovation.
Revised Downward Guidance
Lowered financial guidance reflects challenges in cost management and demand fluctuations, which may affect investor confidence and strategic planning.
Core & Main (CNM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.81B
Dividend YieldN/A
Average Volume (3M)3.12M
Price to Earnings (P/E)22.2
Beta (1Y)1.32
Revenue Growth11.02%
EPS Growth7.08%
CountryUS
Employees5,700
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)0.87
Shares Outstanding189,654,480
10 Day Avg. Volume3,937,679
30 Day Avg. Volume3,118,840
Financial Highlights & Ratios
PEG Ratio-1.07
Price to Book (P/B)6.30
Price to Sales (P/S)1.44
P/FCF Ratio18.25
Enterprise Value/Market Cap1.53
Enterprise Value/Revenue1.94
Enterprise Value/Gross Profit7.27
Enterprise Value/Ebitda16.21
Forecast
1Y Price Target
$59.73Price Target Upside16.96% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Core & Main Business Overview & Revenue Model
Company DescriptionCore & 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 MoneyCore & Main generates revenue primarily through the distribution of its core products, including waterworks and plumbing supplies. The company's revenue model is centered on a combination of product sales, value-added services, and rental solutions. Key revenue streams include direct sales to contractors and municipalities, which account for a significant portion of its income. Additionally, Core & Main benefits from strategic partnerships with leading manufacturers, allowing it to offer a wide range of quality products and stay competitive in pricing. The company also leverages its extensive distribution network and logistics capabilities to enhance efficiency and manage costs, contributing to its overall profitability.
Core & Main Earnings Call Summary
Earnings Call Date:Sep 09, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Dec 09, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with significant net sales growth, market share gains, and strategic expansion into Canada. However, these positives were offset by challenges such as a decline in the residential market, elevated operating costs, and a downward revision in financial guidance for fiscal 2025.Q2-2025 Updates
Positive Updates
Strong Net Sales Growth
Core & Main reported nearly 7% net sales growth in Q2 2025, with approximately 5% organic growth. The municipal demand remained healthy, supported by infrastructure projects.
Market Share Gains
Significant sales growth and market share gains were reported in treatment plant and fusible HDPE projects, driven by technical expertise and execution.
Gross Margin Improvement
Gross margin came in at 26.8%, up 10 basis points from Q1 and 40 basis points year over year, driven by private label and sourcing initiatives.
Positive Cash Flow and Share Repurchase
Generated $34 million in operating cash flow and repurchased $47 million of shares, reducing share count by nearly 1 million.
Canadian Expansion
Announced the acquisition of Canada Waterworks, expanding presence in the multi-billion dollar Canadian market.
Strong Adjusted EPS Growth
Adjusted diluted earnings per share increased approximately 13% to $0.87 compared to $0.77 in the prior year.
Negative Updates
Residential Market Decline
Lot development for single-family housing, which accounts for roughly 20% of sales, slowed during the quarter, especially in fast-growing Sunbelt markets, due to higher interest rates and lower consumer confidence.
Elevated Operating Costs
Operating costs were elevated due to high employee benefit costs, inflation, and higher costs from recent acquisitions, leading to lower than expected operating margins.
Revised Downward Guidance
Guidance for fiscal 2025 was lowered due to higher operating costs and softer residential demand, with expected net sales of $7.6 to $7.7 billion and adjusted EBITDA of $920 to $940 million.
Decline in Meter Product Sales
Sales of meter products declined year over year due to project delays and comparison to a high growth rate last year.
Company Guidance
During the Core & Main Q2 2025 earnings call, the company provided revised guidance, adjusting its outlook due to softer residential demand and higher operating expenses. The company now anticipates net sales between $7.6 and $7.7 billion, adjusted EBITDA of $920 to $940 million, and operating cash flow of $550 to $610 million for the fiscal year. Municipal end market volumes are expected to grow in the low single digits, non-residential volumes to remain roughly flat, while residential lot development is projected to decline in the low double digits. Despite this, Core & Main achieved nearly 7% net sales growth in the quarter, with organic growth at approximately 5%, supported by strong municipal demand and strategic initiatives such as treatment plant and fusible HDPE projects. Gross margins improved to 26.8%, up from the previous year, due to private label and sourcing initiatives, although SG&A expenses increased by 13%, driven by acquisitions and inflationary pressures. The company is implementing targeted cost-out actions to improve productivity and expects to realize savings in the second half of 2025, with more substantial benefits anticipated in 2026.Core & Main Financial Statement Overview
Summary
Core & Main demonstrates strong financial performance with consistent revenue growth and solid profitability margins. The balance sheet is stable with a reasonable level of leverage and strong return on equity. Cash flow generation remains robust, despite a slight decline in free cash flow growth.Income Statement
Core & Main has demonstrated strong revenue growth, with a TTM revenue growth rate of 1.7%. The company maintains healthy profitability metrics, with a gross profit margin of 26.6% and a net profit margin of 5.5% in the TTM period. EBIT and EBITDA margins are also robust at 9.5% and 12.1%, respectively. These figures indicate a solid operational performance, although there is a slight decline in margins compared to previous periods.85
Very Positive
Balance Sheet
The balance sheet shows a moderate debt-to-equity ratio of 1.45, indicating a balanced approach to leveraging. The return on equity is strong at 24.6%, reflecting efficient use of equity capital. However, the equity ratio is not explicitly provided, which could provide further insights into asset financing. Overall, the balance sheet reflects a stable financial position with manageable leverage.75
Positive
Cash Flow
Cash flow metrics reveal a slight decline in free cash flow growth, with a negative growth rate of -2.6% in the TTM period. The operating cash flow to net income ratio is 0.50, suggesting adequate cash generation relative to net income. The free cash flow to net income ratio is high at 93.4%, indicating strong cash conversion. Despite the decline in free cash flow growth, the company maintains solid cash flow generation capabilities.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.74B | 7.44B | 6.70B | 6.65B | 5.00B | 3.64B |
| Gross Profit | 2.06B | 1.98B | 1.82B | 1.79B | 1.28B | 878.00M |
| EBITDA | 926.00M | 913.00M | 894.00M | 924.00M | 524.00M | 338.00M |
| Net Income | 431.00M | 411.00M | 371.00M | 366.00M | 166.00M | 37.00M |
Balance Sheet | ||||||
| Total Assets | 6.31B | 5.87B | 5.07B | 4.91B | 4.43B | 3.59B |
| Cash, Cash Equivalents and Short-Term Investments | 25.00M | 8.00M | 1.00M | 177.00M | 1.00M | 380.90M |
| Total Debt | 2.53B | 2.51B | 2.07B | 1.63B | 1.62B | 2.39B |
| Total Liabilities | 4.34B | 4.10B | 3.54B | 2.50B | 2.60B | 2.92B |
| Stockholders Equity | 1.89B | 1.70B | 1.45B | 1.75B | 1.32B | 801.00M |
Cash Flow | ||||||
| Free Cash Flow | 564.00M | 586.00M | 1.03B | 376.00M | -51.00M | 202.00M |
| Operating Cash Flow | 606.00M | 621.00M | 1.07B | 401.00M | -31.00M | 214.00M |
| Investing Cash Flow | -198.00M | -788.00M | -270.00M | -152.00M | -203.00M | -228.90M |
| Financing Cash Flow | -396.00M | 174.00M | -975.00M | -73.00M | -146.00M | 215.00M |
Core & Main Technical Analysis
Negative
51.07
Price Trends
60.76
Negative
58.87
Negative
55.11
Negative
Market Momentum
-3.46
Positive
35.66
Neutral
73.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNM, the sentiment is Negative. The current price of 51.07 is below the 20-day moving average (MA) of 55.38, below the 50-day MA of 60.76, and below the 200-day MA of 55.11, indicating a bearish trend. The MACD of -3.46 indicates Positive momentum. The RSI at 35.66 is Neutral, neither overbought nor oversold. The STOCH value of 73.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CNM.
Core & Main Risk Analysis
Core & Main disclosed 47 risk factors in its most recent earnings report. Core & Main 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
Core & Main Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | 10.11B | 16.26 | 13.91% | 0.85% | 1.30% | -1.09% | |
75 Outperform | 4.95B | 25.08 | 14.52% | 3.81% | -4.11% | -31.26% | |
73 Outperform | 9.79B | 25.62 | 21.31% | 0.68% | 1.88% | 2.91% | |
70 Outperform | 45.58B | 24.05 | 52.31% | 0.91% | 4.35% | 7.84% | |
69 Neutral | 44.65B | 24.30 | 31.82% | 1.47% | 3.80% | 9.26% | |
61 Neutral | $9.81B | 22.21 | 24.42% | ― | 11.02% | 7.08% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
Performance Comparison
CNM
Core & Main
51.07
5.30
11.58%
AIT
Applied Industrial Technologies
259.10
37.56
16.95%
MSM
MSC Industrial
89.20
5.65
6.76%
GWW
WW Grainger
951.71
-75.70
-7.37%
WCC
Wesco International
208.51
38.58
22.70%
GB:FERG
Ferguson PLC
16,940.00
1,993.12
13.33%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.