Owens Corning (OC) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA above its 5-year median

Owens Corning's EV/EBITDA of 15.0 is above its 5-year median of 6.9.

P/B above the industry

Owens Corning's price-to-book of 3.06 is above the Materials median of 2.43.

Trading above fair value

The share price of $122.44 is above our fair value estimate of $84.53.

Margin of safety under 20%

The price is 44.9% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 1.2% 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 acceleration

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

Growing slower than the industry

Revenue grew -8.4% over the last twelve months; the Materials median is 2.3%.

Guidance raised

Owens Corning raised its Current 2026 Depreciation and Amortization outlook on May 6, 2026.

Gross margin slipping

Gross margin was 25.0% over the last twelve months, against 29.3% a year earlier.

Return on equity under 15%

Return on equity was -11.3% over the last twelve months and averaged 15.6% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 2.2%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Owens Corning's return on equity of -11.3% is below the Materials median of 5.1%.

Earnings over 5 years

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

Net margin below its 5-year average

Net margin was -4.4% over the last twelve months, against a 5-year average of 8.0%.

Net margin below the industry

Owens Corning's net margin of -4.4% is below the Materials median of 2.8%.

High debt

Debt is 139% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 80.6% five years ago to 139%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 37.5% of total debt.

Interest not well covered

Operating income covers interest expense 0.9 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.13 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.07; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Owens Corning paid dividends worth 2.6% of the share price over the last twelve months.

Yield below Treasuries

The 2.6% 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; Owens Corning yields 2.6%.

Dividend not cut

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

Earnings cover

Needs dividends paid and net income.

Covered by free cash flow

Dividends take 31.9% of free cash flow.