Quanex Building Products CORP (NX) stock analysis

P/E above its 5-year median

Quanex Building Products's P/E of 21.2 is above its own 5-year median of 12.0.

P/E below the industry

Quanex Building Products's P/E of 21.2 is below the Rolling, Drawing, and Extruding of Nonferrous median of 22.3.

EV/EBITDA above its 5-year median

Quanex Building Products's EV/EBITDA of 7.5 is above its 5-year median of 6.7.

P/B below the industry

Quanex Building Products's price-to-book of 1.29 is below the Rolling, Drawing, and Extruding of Nonferrous median of 3.17.

Trading below fair value

The share price of $20.99 is below our fair value estimate of $21.94.

Margin of safety under 20%

The price is 4.3% below fair value, less than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 14.6% a year over the last three fiscal years.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 1.3% over the last twelve months; the Rolling, Drawing, and Extruding of Nonferrous median is 18.3%.

Guidance issued

The latest outlook (fiscal 2026 net sales, Mar 5, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin improving

Gross margin was 26.6% over the last twelve months, against 26.0% a year earlier.

Return on equity under 15%

Return on equity was 6.2% over the last twelve months and averaged 5.3% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 6.5%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Quanex Building Products's return on equity of 6.2% is below the Rolling, Drawing, and Extruding of Nonferrous median of 15.6%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin above its 5-year average

Net margin was 2.4% over the last twelve months, against a 5-year average of 1.8%.

Net margin below the industry

Quanex Building Products's net margin of 2.4% is below the Rolling, Drawing, and Extruding of Nonferrous median of 5.2%.

High debt

Debt is 89.0% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 33.0% five years ago to 89.0%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 21.9% of total debt.

Interest not well covered

Operating income covers interest expense 2.2 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 2.23 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 1.93; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Quanex Building Products paid dividends worth 1.5% of the share price over the last twelve months.

Yield below Treasuries

The 1.5% 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; Quanex Building Products yields 1.5%.

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 32.1% of net income.

Covered by free cash flow

Dividends take 16.0% of free cash flow.