AZZ Inc. (AZZ) is Drawing Interest from Investors: Key Information You Need to Be Aware Of

AZZ: Recent Market Interest and Key Considerations

AZZ has recently become one of the most frequently searched stocks on Zacks.com. If you're evaluating this company, it's important to look at several factors that could impact its stock performance in the near future.

Recent Stock Performance

Over the past month, AZZ, a manufacturer in the electrical equipment sector, saw its shares rise by 7.6%. In comparison, the Zacks S&P 500 composite index increased by 0.6%, and the Zacks Manufacturing - Electronics industry, which includes AZZ, gained 8.6%. This raises the question: what might be next for AZZ's stock?

What Drives Stock Trends?

While news headlines or speculation about significant business changes can cause short-term stock price swings, long-term investors often focus on the underlying fundamentals that shape a company's outlook.

Earnings Estimate Revisions: A Key Indicator

At Zacks, the primary focus is on how a company's earnings forecasts are changing. The rationale is that a stock's fair value is closely tied to the present value of its expected future earnings.

Our research centers on updates from analysts who track the company. When analysts raise their earnings projections, the perceived value of the stock typically increases, which can attract buyers and push the price higher. Studies have shown a strong link between changes in earnings estimates and short-term stock price movements.

Currently, AZZ is anticipated to report earnings of $1.19 per share for the ongoing quarter, reflecting a 21.4% increase from the same period last year. Over the past month, the Zacks Consensus Estimate for this figure has edged up by 0.6%.

For the full fiscal year, analysts expect earnings of $6.04 per share, a 16.2% improvement over the prior year, though this estimate has dipped by 0.1% in the last 30 days. Looking ahead to the next fiscal year, the consensus is $6.82 per share, up 12.9% from the current year, but this estimate has decreased by 0.9% over the past month.

With a strong track record verified by external audits, the Zacks Rank system leverages these earnings estimate changes to provide a reliable gauge of near-term stock performance. Based on recent estimate trends and other related factors, AZZ currently holds a Zacks Rank #3 (Hold).

The following chart illustrates the progression of AZZ's forward 12-month consensus EPS estimate:

12-Month EPS Outlook

Revenue Growth Projections

While earnings growth is a strong indicator of financial health, sustained revenue growth is essential for long-term profitability. Understanding a company's revenue outlook is therefore critical.

For the current quarter, AZZ is expected to generate $383.63 million in sales, a 9% increase year-over-year. For the current and next fiscal years, projected revenues are $1.65 billion (up 4.7%) and $1.76 billion (up 6.4%), respectively.

Recent Results and Earnings Surprises

In its most recent quarter, AZZ reported revenues of $425.75 million, up 5.5% from the previous year. Earnings per share came in at $1.52, compared to $1.39 a year earlier.

These results exceeded the Zacks Consensus Estimate of $417.31 million in revenue by 2.02%, and the EPS beat expectations by 6.29%. Over the last four quarters, AZZ has surpassed consensus EPS estimates three times and exceeded revenue estimates once.

Valuation Insights

Assessing a stock's valuation is vital for making informed investment decisions. Key metrics such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) can help determine if a stock is undervalued, overvalued, or fairly priced—both in comparison to its own history and to industry peers.

The Zacks Value Style Score, which evaluates both traditional and alternative valuation measures, rates stocks from A (best) to F (worst). AZZ currently receives a B, suggesting it is trading at a discount relative to its peers.

Summary

The information above, along with additional resources on Zacks.com, can help you decide whether AZZ merits your attention. However, with a Zacks Rank #3, the stock is expected to perform in line with the broader market in the near term.

Featured Stock Picks from Zacks

Zacks' research team has identified five stocks with the potential to double in value in the coming months. Among these, Director of Research Sheraz Mian highlights a lesser-known satellite communications company poised for significant growth as the space industry expands. Analysts anticipate a major revenue surge in 2025. While not all picks achieve such gains, this company could outperform previous winners like Hims & Hers Health, which soared over 200%.