Gibraltar Industries, Inc.’s ROCK focus on employing its strategic business initiatives, including price/cost management, 80/20 initiative and accretive inorganic moves, has fostered analysts’ optimism. Its earnings estimates for 2025 have trended upward in the past 60 days by 1%, indicating 15.5% year-over-year growth. Also, the earnings estimates for the first quarter reflect 7.5% growth from the prior-year quarter.

EPS Trend

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Notably, ROCK’s earnings estimate trend has moved up compared to a few of the other market players, United Rentals, Inc. URI, Owens Corning OC and Frontdoor, Inc. FTDR. The earnings estimates have moved down for URI by 0.7% in the past 30 days, OC by 1.2% in the past seven days and FTDR by 5.3% in the past 60 days.

The strategic initiatives adopted by ROCK mainly advocate margin growth and increased profitability through cutting down costs and simplifying its business structure for better growth opportunities. The company can foster its business growth and ensure shareholder value with the increased cash flow. The ongoing macro headwinds, uncertainties surrounding the new tariff policies and lingering inflationary pressures are pressurizing the growth of a few of its reportable segments. However, Gibraltar is expected to navigate through these uncertainties in the near term with the support of its in-house initiatives.

Considering the share price performance, ROCK stock has trended down 7.9% in the year-to-date period. However, during the said time frame, it has outperformed the Zacks Building Products - Miscellaneous industry, the broader Zacks Construction sector and the S&P 500 index. The detailed price performance can be studied from the chart below.

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ROCK has also left behind some of the other market players in the year-to-date period, including United Rentals, Owens Corning and Frontdoor. The share price indicates a decline of 17.3%, 18.4% and 27%, respectively, for United Rentals, Owens Corning and Frontdoor.

Factors Supporting Gibraltar’s Momentum

The company is diligently working on expanding its margins through strategic in-house initiatives. As of 2024, it was able to improve margins in each business through core 80/20, productivity, price cost management and better execution in renewables. Gibraltar highlighted the benefits realized from the 80/20 initiatives and effective execution of price/cost management for its Residential business in 2024. Although delays in new business participation gains adversely impacted growth in the fourth quarter of 2024, the acceleration witnessed in January 2025 seems encouraging for the upcoming quarters. It believes that its continuous efforts in overall margin expansion and fostering working capital will further drive its cash performance.

Notably, the company’s inorganic moves are aiding its prospects in the near and long terms. On Feb. 11, 2025, Gibraltar acquired the Texas-based Lane Supply, an industry leader in the design, manufacturing and installation of canopy-serving convenience stores, quick-serve restaurants, travel centers, food retailers and EV charging stations. This acquisition is expected to boost its Agtech Structures business. Furthermore, on Dec. 17, 2024, the company divested its electronic locker business within its Residential segment to a third party and recorded a pre-tax net gain of $25.3 million.

Owing to the positive pathway of its in-house capabilities, ROCK has laid out an upbeat 2025 outlook, boosting investors’ sentiments. For 2025, the company expects net sales to be in the range of $1.40-$1.45 billion, up from $1.31 billion reported in 2024. Its expectations for adjusted earnings per share (EPS) are in the range of $4.80-$5.05, notably up from adjusted EPS of $4.25 reported in 2024.

ROCK Trading at a Discount

The company’s current valuation is enticing for investors to look into it. ROCK stock is currently trading at a discount compared with the industry peers on a forward 12-month price-to-earnings (P/E) ratio basis. The discounted valuation indicates an attractive option for investors looking for a suitable entry point.

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How to Play ROCK Stock?

Per the above discussion, Gibraltar is well-positioned to navigate through the ongoing market uncertainties with support from its in-house capabilities, especially focusing on margin expansion and cash flow growth.

Through effective strategies, organic and inorganic, the company can focus on its business growth and ensure cost optimization, which is an arduous task in the current macro scenario. The investors must consider this positive aspect of Gibraltar while making any decisions regarding it.

Thus, by weighing both sides of the coin, it can be deduced that investors can consider adding this Zacks Rank #2 (Buy) stock to their portfolio for now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Gibraltar Industries, Inc. (ROCK) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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