Latest news with #UFPIndustries'
Yahoo
21-05-2025
- Business
- Yahoo
Be Wary Of UFP Industries (NASDAQ:UFPI) And Its Returns On Capital
To find a multi-bagger stock, what are the underlying trends we should look for in a business? In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. Although, when we looked at UFP Industries (NASDAQ:UFPI), it didn't seem to tick all of these boxes. We've discovered 1 warning sign about UFP Industries. View them for free. For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. The formula for this calculation on UFP Industries is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.13 = US$457m ÷ (US$4.2b - US$497m) (Based on the trailing twelve months to March 2025). Thus, UFP Industries has an ROCE of 13%. In absolute terms, that's a pretty normal return, and it's somewhat close to the Building industry average of 14%. See our latest analysis for UFP Industries In the above chart we have measured UFP Industries' prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering UFP Industries for free. On the surface, the trend of ROCE at UFP Industries doesn't inspire confidence. To be more specific, ROCE has fallen from 17% over the last five years. Meanwhile, the business is utilizing more capital but this hasn't moved the needle much in terms of sales in the past 12 months, so this could reflect longer term investments. It's worth keeping an eye on the company's earnings from here on to see if these investments do end up contributing to the bottom line. In summary, UFP Industries is reinvesting funds back into the business for growth but unfortunately it looks like sales haven't increased much just yet. Yet to long term shareholders the stock has gifted them an incredible 136% return in the last five years, so the market appears to be rosy about its future. But if the trajectory of these underlying trends continue, we think the likelihood of it being a multi-bagger from here isn't high. One more thing, we've spotted 1 warning sign facing UFP Industries that you might find interesting. For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
07-04-2025
- Business
- Yahoo
UFP Industries' (NASDAQ:UFPI) investors will be pleased with their strong 185% return over the last five years
When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on the bright side, you can make far more than 100% on a really good stock. For instance, the price of UFP Industries, Inc. (NASDAQ:UFPI) stock is up an impressive 170% over the last five years. Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. During five years of share price growth, UFP Industries achieved compound earnings per share (EPS) growth of 18% per year. This EPS growth is reasonably close to the 22% average annual increase in the share price. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. Rather, the share price has approximately tracked EPS growth. The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image). We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of UFP Industries' earnings, revenue and cash flow . As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of UFP Industries, it has a TSR of 185% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments! We regret to report that UFP Industries shareholders are down 9.6% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 2.0%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 23%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 1 warning sign for UFP Industries that you should be aware of. If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
17-02-2025
- Business
- Yahoo
UFP Industries Gears Up for Q4 Earnings: Things to Keep in Mind
UFP Industries, Inc. UFPI is scheduled to release fourth-quarter 2024 results on Feb. 17, after market the last reported quarter, the company's earnings missed the Zacks Consensus Estimate by 9.4%, while net sales missed the same by 7.2%. Furthermore, on a year-over-year basis, earnings and net sales decreased 21.9% and 10%, Industries' earnings topped the consensus mark in two of the trailing four quarters and missed on two occasions, with an average surprise of 2.6%. The Zacks Consensus Estimate for UFP Industries' fourth-quarter 2024 earnings has remained stable at $1.23 per share in the past 60 days. The estimated figure indicates a 24.1% decrease from the year-ago quarter's reported earnings of $1.62 per share. UFP Industries, Inc. price-eps-surprise | UFP Industries, Inc. Quote For net sales, the consensus mark is pegged at $1.44 billion, indicating a 5.5% year-over-year decline. UFP Industries' net sales are anticipated to have declined year over year in the fourth quarter, due to softer demand in retail, industrial and construction markets. Despite recent interest rate cuts by the Federal Reserve, the rise in mortgage rates is likely to have added pressure to consumer spending and reduced housing demand. Also, lumber market volatility and labor constraints are likely to have impacted the company's top line, indicating lower selling the to-be-reported quarter, UFPI expects demand to have declined, with retail demand down by mid-single digits and packaging demand likely to have decreased to mid to high-single digits. Construction demand is expected to have declined to a low-single digit. UFPI also expects lumber prices to have remained lower due to existing supply and demand our model predicts a year-over-year decline in the net sales of Retail solutions (which accounted for 38.5% of net sales in third-quarter 2024) by 5.1%, Packaging (24.4% of net sales) by 8.8% and Construction (32.4% of net sales) by 3.9% to $480 million, $377.3 million and $491.1 million, the company's focus on long-term strategic plan, new product innovation and shareholders' moves are commendable and are likely to have aided its fourth-quarter 2024 performance. Meanwhile, from margins' perspective, higher manufacturing costs, more competitive pricing, variable lumber prices, and higher labor and transportation expenses are expected to have weighed on the company's bottom line. We expect the gross margin to have declined 180 bps to 17.6% year over predict earnings from operations for the Retail, Packaging and Construction segments to have declined 23.5% to $16.4 million, 70.3% to $12.7 million and 8.3% to $52.8 million, respectively, year over year. Our proven model does not conclusively predict an earnings beat for UFP Industries this time around. The company does not have the right combination of the two key ingredients, a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), to increase the odds of an earnings ESP of UFPI: UFP Industries currently has an Earnings ESP of 0.00%. You can uncover the best stocks before they're reported with our Earnings ESP Zacks Rank: The company currently carries a Zacks Rank #2. Here are some companies in the Zacks Construction sector, which according to our model, have the right combination of elements to post an earnings beat for their respective quarters to be Inc. FTDR currently has an Earnings ESP of +60.00% and sports a Zacks Rank of 1. You can see the complete list of today's Zacks #1 Rank stocks earnings for the fourth quarter of 2024 are expected to decline 45%. The company reported better-than-expected earnings in each of the last four quarters, the average surprise being 269%.Trex Company, Inc. TREX has an Earnings ESP of +20.00% and a Zacks Rank of reported better-than-expected earnings in each of the last four quarters, the average surprise being 9%. The company's earnings for the fourth quarter of 2024 are expected to decrease 75%.Watsco, Inc. WSO currently has an Earnings ESP of +0.94% and a Zacks Rank of earnings for the fourth quarter of 2024 are expected to increase 3.4%. The company reported lower-than-expected earnings in each of the last four quarters, the negative average surprise being 10%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report UFP Industries, Inc. (UFPI) : Free Stock Analysis Report Watsco, Inc. (WSO) : Free Stock Analysis Report Trex Company, Inc. (TREX) : Free Stock Analysis Report Frontdoor Inc. (FTDR) : Free Stock Analysis Report To read this article on click here. Zacks Investment Research
Yahoo
04-02-2025
- Business
- Yahoo
UFP Industries, Inc.'s (NASDAQ:UFPI) Fundamentals Look Pretty Strong: Could The Market Be Wrong About The Stock?
It is hard to get excited after looking at UFP Industries' (NASDAQ:UFPI) recent performance, when its stock has declined 8.5% over the past three months. However, stock prices are usually driven by a company's financial performance over the long term, which in this case looks quite promising. In this article, we decided to focus on UFP Industries' ROE. Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. In simpler terms, it measures the profitability of a company in relation to shareholder's equity. See our latest analysis for UFP Industries Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for UFP Industries is: 14% = US$453m ÷ US$3.2b (Based on the trailing twelve months to September 2024). The 'return' is the profit over the last twelve months. One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.14 in profit. We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. At first glance, UFP Industries seems to have a decent ROE. Be that as it may, the company's ROE is still quite lower than the industry average of 18%. However, the moderate 19% net income growth seen by UFP Industries over the past five years is definitely a positive. We reckon that there could be other factors at play here. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio. Bear in mind, the company does have a respectable level of ROE. It is just that the industry ROE is higher. So this also does lend some color to the fairly high earnings growth seen by the company. We then performed a comparison between UFP Industries' net income growth with the industry, which revealed that the company's growth is similar to the average industry growth of 19% in the same 5-year period. The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if UFP Industries is trading on a high P/E or a low P/E, relative to its industry. UFP Industries has a low three-year median payout ratio of 10%, meaning that the company retains the remaining 90% of its profits. This suggests that the management is reinvesting most of the profits to grow the business. Moreover, UFP Industries is determined to keep sharing its profits with shareholders which we infer from its long history of paying a dividend for at least ten years. On the whole, we feel that UFP Industries' performance has been quite good. Specifically, we like that it has been reinvesting a high portion of its profits at a moderate rate of return, resulting in earnings expansion. That being so, a study of the latest analyst forecasts show that the company is expected to see a slowdown in its future earnings growth. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
