Latest news with #BECN
Yahoo
25-04-2025
- Business
- Yahoo
3 Reasons BECN is Risky and 1 Stock to Buy Instead
Beacon Roofing Supply currently trades at $123.42 and has been a dream stock for shareholders. It's returned 536% since April 2020, blowing past the S&P 500's 91.2% gain. The company has also beaten the index over the past six months as its stock price is up 32.2%. Is now the time to buy Beacon Roofing Supply, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it's free. We're happy investors have made money, but we're cautious about Beacon Roofing Supply. Here are three reasons why you should be careful with BECN and a stock we'd rather own. Established in 1928, Beacon Roofing Supply (NASDAQ:BECN) distributes residential and commercial roofing materials and complementary building products. We can better understand Building Material Distributors companies by analyzing their organic revenue. This metric gives visibility into Beacon Roofing Supply's core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement. Over the last two years, Beacon Roofing Supply's organic revenue averaged 3.4% year-on-year growth. This performance was underwhelming and suggests it may need to improve its products, pricing, or go-to-market strategy, which can add an extra layer of complexity to its operations. Forecasted revenues by Wall Street analysts signal a company's potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite. Over the next 12 months, sell-side analysts expect Beacon Roofing Supply's revenue to rise by 3.7%, a deceleration versus its 7.6% annualized growth for the past two years. This projection is underwhelming and indicates its products and services will face some demand challenges. While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business. Sadly for Beacon Roofing Supply, its EPS declined by 4.6% annually over the last two years while its revenue grew by 7.6%. This tells us the company became less profitable on a per-share basis as it expanded. Beacon Roofing Supply isn't a terrible business, but it doesn't pass our bar. With its shares outperforming the market lately, the stock trades at 15.6× forward price-to-earnings (or $123.42 per share). This valuation multiple is fair, but we don't have much faith in the company. We're fairly confident there are better investments elsewhere. Let us point you toward a fast-growing restaurant franchise with an A+ ranch dressing sauce. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.
Yahoo
24-04-2025
- Business
- Yahoo
QXO, Inc. (QXO): A Bull Case Theory
We came across a bullish thesis on QXO, Inc. (QXO) on Value Investing Subreddit Page by Frankxdxdxd. In this article, we will summarize the bulls' thesis on QXO. QXO, Inc. (QXO)'s share was trading at $12.46 as of April 23rd. A construction site with workers wearing hard hats and safety vests, installing roofing materials. QXO, led by renowned serial entrepreneur Brad Jacobs, is embarking on a bold plan to transform the $800 billion U.S. and Western European building products distribution industry by leveraging technology and consolidation. Jacobs, who has a long history of building multibagger companies like XPO, GXO, RXO, United Rentals, and United Waste Systems (now Waste Management), is applying his proven M&A-driven playbook to one of the largest and most fragmented industries. With only 50% of the market held by major players and over 20,000 small businesses, the industry offers an immense acquisition runway. QXO is targeting $50 billion in annual revenue over the next decade—equivalent to just 6% market share—through a combination of organic growth and highly accretive acquisitions. Jacobs has personally committed $900 million to QXO, aligning his interests with shareholders, and is known for incentivizing his executive teams with equity tied to total shareholder return. Jacobs sees a compelling long-term opportunity in this sector driven by several secular tailwinds. The industry has delivered 7% annual growth over the past five years, underpinned by largely non-discretionary demand. Repairs to aging residential, commercial, and infrastructure properties cannot be deferred—if a roof leaks, it must be fixed. U.S. homes now average 42 years old, commercial buildings over 50 years, and infrastructure like roads and bridges exceed 70 years, setting the stage for sustained investment. In fact, the U.S. government is expected to allocate up to $2 trillion toward infrastructure renewal in the coming decade. This sets up a favorable macro backdrop for QXO's growth strategy. Technology adoption in this sector remains nascent, creating a major value creation lever. Few distributors are tech-enabled, and many lag in e-commerce, inventory optimization, logistics, and automation. Jacobs aims to address these inefficiencies through digital platforms, AI-powered pricing, and automated distribution centers—initiatives that drive margin expansion and free cash flow conversion. After the initial technology and automation CapEx, the business becomes low CapEx-intensive, allowing for high EBITDA-to-FCF conversion. QXO's first major move is the $11 billion acquisition of Beacon Roofing Supply (BECN), which values the company at 10.5x EV/EBITDA—considered fair by many analysts. BECN is a market leader in roofing, waterproofing, and exterior building products, operating nearly 600 branches across the U.S. and Canada. Importantly, most of its products are domestically produced, offering tariff insulation. Roofing demand is robust, with 80% of revenues coming from repair and replacement—largely immune to economic cycles. BECN has also been scaling its digital channel, which now accounts for 16% of sales and is growing 20% annually. Its proprietary TRI-BUILD brand, which delivers higher margins, now contributes 10% of sales. With a growing waterproofing segment and a consistent record of share buybacks—23% reduction since early 2022—BECN fits seamlessly into Jacobs' playbook. Ultimately, QXO is a classic 'bet-on-the-jockey' story. Brad Jacobs' track record, shareholder alignment, and strategic vision provide a compelling backdrop to what could be another multi-bagger in the making. With powerful industry tailwinds, an under-digitized competitive landscape, and a fragmented acquisition pool, QXO is poised to disrupt a massive industry and create substantial long-term shareholder value. QXO, Inc. (QXO) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held QXO at the end of the fourth quarter which was 31 in the previous quarter. While we acknowledge the risk and potential of QXO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than QXO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Yahoo
09-04-2025
- Business
- Yahoo
Industrial Distributors Stocks Q4 Teardown: Beacon Roofing Supply (NASDAQ:BECN) Vs The Rest
As the Q4 earnings season comes to a close, it's time to take stock of this quarter's best and worst performers in the industrial distributors industry, including Beacon Roofing Supply (NASDAQ:BECN) and its peers. Supply chain and inventory management are themes that grew in focus after COVID wreaked havoc on the global movement of raw materials and components. Distributors that boast a reliable selection of products–everything from hardhats and fasteners for jet engines to ceiling systems–and quickly deliver goods to customers can benefit from this theme. While e-commerce hasn't disrupted industrial distribution as much as consumer retail, it is still a real threat, forcing investment in omnichannel capabilities to better interact with customers. Additionally, distributors are at the whim of economic cycles that impact the capital spending and construction projects that can juice demand. The 28 industrial distributors stocks we track reported a mixed Q4. As a group, revenues along with next quarter's revenue guidance were in line with analysts' consensus estimates. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 18% since the latest earnings results. Established in 1928, Beacon Roofing Supply (NASDAQ:BECN) distributes residential and commercial roofing materials and complementary building products. Beacon Roofing Supply reported revenues of $2.40 billion, up 4.5% year on year. This print fell short of analysts' expectations by 1.1%. Overall, it was a slower quarter for the company with a significant miss of analysts' adjusted operating income estimates and a miss of analysts' EBITDA estimates. 'Despite the challenging economic environment in 2024, we delivered record fourth quarter and full year sales and our highest fourth quarter Adjusted EBITDA in history,' said Julian Francis, Beacon's President & CEO. The stock is up 5.6% since reporting and currently trades at $122.54. Read our full report on Beacon Roofing Supply here, it's free. Spun off from National Oilwell Varco, DistributionNOW (NYSE:DNOW) provides distribution and supply chain solutions for the energy and industrial end markets. DistributionNOW reported revenues of $571 million, up 2.9% year on year, outperforming analysts' expectations by 3.4%. The business had an incredible quarter with a solid beat of analysts' EPS estimates and an impressive beat of analysts' EBITDA estimates. The stock is down 2.6% since reporting. It currently trades at $13.77. Is now the time to buy DistributionNOW? Access our full analysis of the earnings results here, it's free. Producing bomb casings and tracks for vehicles during WWII, MRC (NYSE:MRC) offers pipes, valves, and fitting products for various industries. MRC Global reported revenues of $664 million, down 13.5% year on year, falling short of analysts' expectations by 8.7%. It was a disappointing quarter as it posted a significant miss of analysts' adjusted operating income estimates. As expected, the stock is down 14.5% since the results and currently trades at $9.49. Read our full analysis of MRC Global's results here. Founded in 1947, Richardson Electronics (NASDAQ:RELL) is a distributor of power grid and microwave tubes as well as consumables related to those products. Richardson Electronics reported revenues of $49.49 million, up 12.1% year on year. This number missed analysts' expectations by 3.5%. Overall, it was a disappointing quarter as it also recorded a significant miss of analysts' EBITDA and EPS estimates. The stock is down 39% since reporting and currently trades at $8.97. Read our full, actionable report on Richardson Electronics here, it's free. Formerly known as Systemax, Global Industrial (NYSE:GIC) distributes industrial and commercial products to businesses and institutions. Global Industrial reported revenues of $302.3 million, down 5.6% year on year. This print came in 1.2% below analysts' expectations. It was a slower quarter as it also logged a miss of analysts' EPS estimates. The stock is down 12.3% since reporting and currently trades at $21.32. Read our full, actionable report on Global Industrial here, it's free. Thanks to the Fed's rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn't send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump's November win lit a fire under major indices and sent them to all-time highs. However, there's still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy. Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. Join Paid Stock Investor Research Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
Yahoo
20-03-2025
- Business
- Yahoo
Brad Jacobs' QXO has first building products acquisition, as Beacon OKs sale
Brad Jacobs, who put together less-than-truckload carrier XPO and its later spinoffs, 3PL RXO and logistics provider GXO, has snagged his first acquisition in the building products sector through his newest company, QXO. In what was shaping up to be a hostile takeover attempt, QXO (NYSE: QXO) and Beacon Roofing Supply (NASDAQ: BECN) announced early Thursday that they had reached an agreement to acquire Beacon for $124.35 per share. The total value of the deal is about $11 billion. When QXO first publicly announced its desire to acquire Beacon on Jan. 15, the price offered was $124.25 per share, just 10 cents less than the final acquisition. The formal tender offer launched Jan. stock price closed Wednesday at $121.53. Just before QXO announced its desire to acquire Beacon, the stock price of the building products supplier was trading near $102. Beacon reported net sales of $9.8 billion for calendar year 2024. The agreement comes about two weeks after Beacon put out a statement calling QXO's offer 'an opportunistic attempt to take advantage of the current macro environment and acquire Beacon at a discount to its intrinsic value for the benefit of QXO but to the detriment of Beacon's shareholders.' But soon after that statement, it was reported that the two sides were in discussions toward reaching a deal. While news of QXO's interest in Beacon first emerged in January, a statement released Thursday by Beacon Chairman Stuart Randle said QXO had first approached Beacon in November.''Since QXO made its initial offer last November, we have evaluated strategic alternatives to enhance value for all of our shareholders,' Randle said. 'Following our Board's comprehensive review, we concluded that this transaction is in the best interests of Beacon and its shareholders given the immediate premium and certainty of value in cash it offers, particularly in an uncertain environment.' Although a move into consolidating building supply companies may seem a significant change in direction for Jacobs and his prior focus on freight and logistics, he has said he believes the consolidation of the ecosystem of building products suppliers is actually a supply chain story. Jacobs said from the launch of QXO that he saw the industry as fragmented, and that consolidation could provide huge cost savings and synergies, with supply chain benefits as one of the key areas for growth. In commenting on the transaction, Ryan Merkel of the research firm of William Blair was positive about the deal. 'Beacon employees should feel energized to be part of QXO's journey to $50 billion of sales,' he said in a report. 'Beacon gives QXO a strong nationwide footprint and a business that lends itself well to other adjacencies. Beacon had already started to dig into waterproofing, and we expect QXO to investigate similar adjacent verticals in future moves.' QXO was created by Jacobs' acquisition of a small publicly traded software company, SilverSun, that had nothing to do with freight or logistics. Its market cap was about $20 million in late 2023 when the acquisition was complete. But Jacobs pumped about $1 billion in new capital into the company, transformed it into QXO, his vehicle for buying building products companies and creating a juggernaut in that industry. He moved QXO from the Nasdaq to the New York Stock Exchange. The QXO platform for his move into building products and the logistics behind them was then set up when he took his run at Beacon. In its announcement that the deal had been completed, QXO said antitrust clearance had been granted in the U.S. and Canada. With other financing completed since the original $1 billion launch of QXO, the company said it has $5 billion of cash and secured financing commitments for the full purchase price, including debt refinancing and transaction costs. It has lined up purchase agreements for an $830 million private placement that will be completed after the Beacon deal is a statement released to FreightWaves, a spokesman for QXO said the company intends to make it 'very big, as quickly as possible, because it will benefit both our customers and our shareholders. We're targeting $50 billion of annual revenue.' Discussing the fragmentation of the industry, the spokesman said QXO has identified 7,000 players in the building products industry in North America and 13,000 in Europe. Jacobs remains non-executive chairman of RXO (NYSE: RXO), chairman at GXO (NYSE: GXO) and executive chairman at XPO (NYSE: XPO). More articles by John Kingston ATA economist: US port fees on Chinese ships will hurt freight markets TransForce, which hires thousands of drivers a year, eyeing smaller fleets Stolen load of cellphones involving RXO may be another key broker liability case The post Brad Jacobs' QXO has first building products acquisition, as Beacon OKs sale appeared first on FreightWaves. Sign in to access your portfolio
