AZZ Inc (AZZ) stock analysis

P/E above its 5-year median

AZZ's P/E of 23.9 is above its own 5-year median of 20.9.

P/E above the industry

AZZ's P/E of 23.9 is above the Fabricated Metal Products, except Machinery and Transportation Equipment median of 22.3.

EV/EBITDA above its 5-year median

AZZ's EV/EBITDA of 11.6 is above its 5-year median of 11.1.

P/B above the industry

AZZ's price-to-book of 2.80 is above the Fabricated Metal Products, except Machinery and Transportation Equipment median of 2.80.

Trading above fair value

The share price of $132.49 is above our fair value estimate of $120.58.

Margin of safety under 20%

The price is 9.9% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 7.6% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings growth not accelerating

Net income grew -46.7% over the last twelve months, against a 5-year average of 51.6% a year.

Growing slower than the industry

Revenue grew 9.5% over the last twelve months; the Fabricated Metal Products, except Machinery and Transportation Equipment median is 10.2%.

Guidance raised

AZZ raised its FY2027 Debt reduction outlook on Oct 13, 2026.

Gross margin improving

Gross margin was 24.3% over the last twelve months, against 23.9% a year earlier.

Return on equity under 15%

Return on equity was 12.3% over the last twelve months and averaged 12.3% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 11.4%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

AZZ's return on equity of 12.3% is above the Fabricated Metal Products, except Machinery and Transportation Equipment median of 9.0%.

Earnings grew over 5 years

Net income grew 51.6% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 9.6% over the last twelve months, against a 5-year average of 9.2%.

Net margin above the industry

AZZ's net margin of 9.6% is above the Fabricated Metal Products, except Machinery and Transportation Equipment median of 4.5%.

Low debt

Debt is 33.1% of shareholders' equity, under the 40% we consider low.

Debt rising against equity

Debt to equity rose from 28.6% five years ago to 33.1%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 62.4% of total debt.

Interest well covered

Operating income covers interest expense 6.3 times.

Short-term assets cover short-term debts

Current assets are 1.79 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.42; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

AZZ paid dividends worth 0.7% of the share price over the last twelve months.

Yield below Treasuries

The 0.7% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; AZZ yields 0.7%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 15.0% of net income.

Covered by free cash flow

Dividends take 11.7% of free cash flow.