Armstrong World Industries, Inc. Fundamental Analysis (NYSE: AWI)
Armstrong World Industries, Inc. Fundamental Analysis (NYSE: AWI)
Armstrong World Industries, Inc. (NYSE: AWI) shows strong financial fundamentals with a PE ratio of 24.35, profit margin of 18.60%, and ROE of 35.36%. The company generates $1.7B in annual revenue with strong year-over-year growth of 12.11%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 76.1/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze AWI's fundamental strength across five key dimensions:
Efficiency Score
ExcellentAWI demonstrates superior asset utilization.
Valuation Score
ModerateAWI shows balanced valuation metrics.
Growth Score
ExcellentAWI delivers strong and consistent growth momentum.
Financial Health Score
ExcellentAWI maintains a strong and stable balance sheet.
Profitability Score
ExcellentAWI achieves industry-leading margins.
Key Financial Metrics
Is AWI Expensive or Cheap?
P/E Ratio
AWI trades at 24.35 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, AWI's PEG of 3.25 indicates potential overvaluation.
Price to Book
The market values Armstrong World Industries, Inc. at 8.55 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 11.97 times EBITDA. This signals the market has high growth expectations.
How Well Does AWI Make Money?
Net Profit Margin
For every $100 in sales, Armstrong World Industries, Inc. keeps $18.60 as profit after all expenses.
Operating Margin
Core operations generate 29.23 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $35.36 in profit for every $100 of shareholder equity.
ROA
Armstrong World Industries, Inc. generates $15.71 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Armstrong World Industries, Inc. produces operating cash flow of $356.80M, showing steady but balanced cash generation.
Free Cash Flow
Armstrong World Industries, Inc. generates strong free cash flow of $254.07M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $6.01 in free cash annually.
FCF Yield
AWI converts 3.39% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
24.35
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
3.25
vs 25 benchmark
P/B Ratio
Price to book value ratio
8.55
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.44
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.66
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.52
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.35
vs 25 benchmark
ROA
Return on assets percentage
0.16
vs 25 benchmark
ROCE
Return on capital employed
0.29
vs 25 benchmark
How AWI Stacks Against Its Sector Peers
| Metric | AWI Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 24.35 | 27.26 | Better (Cheaper) |
| ROE | 35.36% | 1196.00% | Weak |
| Net Margin | 18.60% | 224.00% | Weak |
| Debt/Equity | 0.66 | 0.73 | Neutral |
| Current Ratio | 1.52 | 3.13 | Neutral |
| ROA | 15.71% | 2757.00% | Weak |
AWI outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Armstrong World Industries, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
90.06%
Industry Style: Cyclical, Commodity, Value
High GrowthEPS CAGR
502.79%
Industry Style: Cyclical, Commodity, Value
High GrowthFCF CAGR
78.50%
Industry Style: Cyclical, Commodity, Value
High Growth