It has been about a month since the last earnings report for Griffon (GFF). Shares have added about 2.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Griffon due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Griffon reported fourth-quarter fiscal 2024 (ended September 2024) adjusted earnings of $1.47 per share, which surpassed the Zacks Consensus Estimate of $1.21. The bottom line increased 23.5% year over year.
Total revenues of $659.7 million surpassed the consensus estimate of $642 million and increased 3% year over year.
Home and Building Products: Sales from the Home and Building Products segment (representing 61.6% of net revenues) were $406.6 million, up 3.2% year over year due to a favorable product mix of 2% and increased volume of 1%. The segment’s revenues were $1.6 billion in fiscal 2024, flat year over year.
Consumer and Professional Products: The segment’s revenues (38.4%) summed $253.1 million, up 2% year over year driven by increased volume from Australia, inclusive of the Pope acquisition (3%). The segment’s revenues in fiscal 2024 declined 6% to $1.0 billion.
Griffon’s cost of sales increased 0.2% year over year to $396.2 million. Selling, general and administrative expenses decreased 3.5% year over year to $151.8 million.
Total operating expenses declined 8.8% year over year to $151.8 million. The gross margin increased to 41.1% from 39.2% in the year-ago period.
At the end of the fourth quarter, Griffon had cash and cash equivalents of $114.4 million compared with $102.9 million at the end of fiscal 2023 (ended September 2023). Long-term debt, net of current maturities, was $1.52 billion at the end of the fourth quarter compared with $1.46 billion at fiscal 2023-end.
In fiscal 2024, the company generated net cash of $380 million from operating activities compared with $431.8 million cash generated in the year-ago period.
Free cash flow was $326.1 million in fiscal 2024 compared with $389.1 million cash flow in the prior-year period.
Griffon expects fiscal 2025 revenues to be consistent with the revenues generated in fiscal 2024. Adjusted EBITDA is expected to be $575-$600 million.
It turns out, estimates review have trended downward during the past month.
At this time, Griffon has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Griffon has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Griffon belongs to the Zacks Diversified Operations industry. Another stock from the same industry, Markel Group (MKL), has gained 1.9% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Markel Group reported revenues of $3.69 billion in the last reported quarter, representing a year-over-year change of +1.5%. EPS of $17.34 for the same period compares with $16.56 a year ago.
For the current quarter, Markel Group is expected to post earnings of $19.42 per share, indicating a change of -65.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -4.1% over the last 30 days.
Markel Group has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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