NX - Quanex Building Products: Robust Outlook Offset By Lack Of Margin Of Safety
2024-04-15 22:50:04 ET
Summary
- Quanex Building Products' historical financials have shown volatile revenue growth, but it has demonstrated its ability to expand its margins annually.
- In 1Q24, revenue was down due to soft demand and lower pricing, but margins continued expanding year-over-year.
- According to the National Association of Home Builders, US housing starts are expected to grow in the next few years. This is expected to bolster NX's revenue.
- In order to continue growing its business, NX has clear plans for its growth strategies, as it has identified new attractive areas for expansion.
- However, due to a lack of margin of safety in its current share price, I am recommending a hold rating for NX.