Quanex Building Products CORP (NYSE: NX)

Sector: Industrials Industry: Building Products & Equipment CIK: 0001423221
Market Cap 733.22 Mn
P/B 1.97
P/E 276.38
P/S 0.84
ROIC (Qtr) -6.89
Div Yield % 1.09
Rev 1y % (Qtr) -0.47
Total Debt (Qtr) 853.73 Mn
Debt/Equity (Qtr) 1.18
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About

Quanex Building Products Corporation (NX), a leading manufacturer in the building products industry, operates in the fenestration and cabinet door industries. The company, which was incorporated in Delaware in 2

Investment thesis

Bull case

  • Operating cash flow of 164.90M provides strong 44.75x coverage of stock compensation 3.69M, indicating sustainable incentive practices.
  • Robust free cash flow of 102.89M exceeds capital expenditure of 62.01M by 1.66x, indicating strong organic growth funding capability.
  • Operating cash flow of 164.90M fully covers other non-current liabilities 149.78M by 1.10x, showing strong long-term stability.
  • Robust tangible asset base of 1.15B provides 3.93x coverage of working capital 292.23M, indicating strong operational backing.
  • Tangible assets of 1.15B provide robust 10.70x coverage of other current liabilities 107.23M, indicating strong asset backing.

Bear case

  • Operating cash flow of 164.90M barely covers its investment activities of (62.01M), with a coverage ratio of -2.66, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 164.90M provides thin coverage of dividend payments of (14.89M) with a -11.08 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating earnings of (186.78M) show weak coverage of depreciation charges of 103.44M, with a -1.81 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 102.89M represents just -1.30x of debt issuance (79.05M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High depreciation of 103.44M relative to operating cash flow of 164.90M, which is 0.63x suggests significant maintenance capital requirements affecting free cash flow.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Building Products & Equipment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TT Trane Technologies plc 104.89 Bn 35.94 4.92 4.62 Bn
2 JCI Johnson Controls International plc 91.64 Bn 26.98 3.82 9.71 Bn
3 CARR CARRIER GLOBAL Corp 56.66 Bn 38.18 2.61 12.25 Bn
4 LII Lennox International Inc 19.91 Bn 24.71 3.83 1.77 Bn
5 CSL Carlisle Companies Inc 17.50 Bn 23.63 3.49 2.88 Bn
6 MAS Masco Corp /De/ 15.94 Bn 19.68 2.11 3.17 Bn
7 OC Owens Corning 13.83 Bn 13.90 1.63 5.61 Bn
8 WMS Advanced Drainage Systems, Inc. 13.26 Bn 28.18 4.44 1.45 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.51 2.00
EV to Cash from Ops. EV/CFO 11.44 13.48
EV to Debt EV to Debt 1.19 10.94
EV to EBIT EV/EBIT 25.18 24.16
EV to EBITDA EV/EBITDA 10.61 -11.14
EV to Free Cash Flow [EV/FCF] EV/FCF 18.22 46.78
EV to Market Cap EV to Market Cap 1.38 1.12
EV to Revenue EV/Rev 1.16 2.81
Price to Book Value [P/B] P/B 1.97 4.24
Price to Earnings [P/E] P/E 276.38 47.40
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -16.85 0.80
Dividend Payout Ratio % Div Payout % (Qtr) -5.90 11.22
Dividend per Basic Share Div per Share (Qtr) 0.32 0.71
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 14.36 10.90
Interest Coverage Int. cover (Qtr) -3.35 111.58
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -181.34 -24.93
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -24.15 61.26
Dividend Growth (1y) % Div 1y % (Qtr) -20.00 1.67
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -492.20 -186.82
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -178.60 -57.93
EBIT Growth (1y) % EBIT 1y % (Qtr) -398.02 -102.26
EBT Growth (1y) % EBT 1y % (Qtr) -676.48 -299.15
EPS Growth (1y) % EPS 1y % (Qtr) -696.70 -598.34
FCF Growth (1y) % FCF 1y % (Qtr) 54.09 89.70
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 63.35 -3.62
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.93 0.88
Cash Payout Ratio Cash Payout (Qtr) 0.07 0.13
Cash Ratio Cash Ratio (Qtr) 0.28 1.57
Current Ratio Curr Ratio (Qtr) 2.04 3.42
Debt to Equity Ratio Debt/Equity (Qtr) 1.18 0.79
Interest Cover Ratio Int Coverage (Qtr) -3.35 111.58
Times Interest Earned Times Interest Earned (Qtr) -3.35 111.58
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -4.50 3.54
EBIT Margin % EBIT Margin % (Qtr) -10.16 1.23
EBT Margin % EBT Margin % (Qtr) -13.20 -1.76
Gross Margin % Gross Margin % (Qtr) 27.20 28.65
Net Profit Margin % Net Margin % (Qtr) -13.60 -3.80