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BECN

Beacon Roofing Supply NasdaqGS:BECN Stock Report

Last Price

US$56.88

Market Cap

US$3.6b

7D

12.4%

1Y

19.4%

Updated

03 Oct, 2022

Data

Company Financials +
BECN fundamental analysis
Snowflake Score
Valuation5/6
Future Growth0/6
Past Performance5/6
Financial Health3/6
Dividends0/6

BECN Stock Overview

Beacon Roofing Supply, Inc., together with its subsidiaries, distributes residential and non-residential roofing materials, and complementary building products to contractors, home builders, building owners, lumberyards, and retailers.

Beacon Roofing Supply Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Beacon Roofing Supply
Historical stock prices
Current Share PriceUS$56.88
52 Week HighUS$65.30
52 Week LowUS$45.71
Beta1.79
1 Month Change6.60%
3 Month Change6.88%
1 Year Change19.40%
3 Year Change83.54%
5 Year Change8.90%
Change since IPO433.58%

Recent News & Updates

Sep 20
Is Beacon Roofing Supply (NASDAQ:BECN) A Risky Investment?

Is Beacon Roofing Supply (NASDAQ:BECN) A Risky Investment?

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...

Sep 13

Beacon Roofing Supply: An Attractive Play Even If Fundamentals Worsen

Summary Beacon Roofing Supply has done well recently, with sales and cash flows rising nicely. Uncertainty exists regarding the future, but that's to be expected given current economic conditions. In all, shares look attractively priced even if performance reverts back to what it was in 2021. If you have owned a home long enough, it is a guarantee that at some point you will have to worry about that home's roof. And unless you are homeless, a roof of some form had to, at one point, been placed above your head. One company on the market that is described as the largest publicly traded distributor of roofing materials and complementary building products in North America is Beacon Roofing Supply (NASDAQ:BECN). Over the past three years, the financial picture of the company has been quite positive. This year, in particular, growth continues to impress. Add on top of this the fact that shares of the company look quite cheap and it is definitely worth some consideration. To be fair, some investors may be worried about the state of the housing market, with rising interest rates, rising inflation, and other concerns potentially proving to weaken the demand for housing and, in turn, weaken the demand for roofing materials as property owners might choose to delay costly replacements or repairs until some point in the future. But even if the company sees its financial performance drop back to the kind of levels experienced in 2020, it's difficult to say that shares are unattractively priced. A roof over your head As I mentioned already, Beacon Roofing Supply operates as a distributor of roofing materials and complementary building products. As of the end of its latest completed fiscal year, the company ran its operations out of 446 branches that were spread across all 50 States and throughout six provinces in Canada. The company currently has a rather significant portfolio of products comprising over 100,000 SKUs that it uses to serve more than 80,000 customers in both the residential and non-residential markets. To keep track of it all and to optimize business activities, the company operates something called the Beacon OTC Network. This is an operating model where the branches the company has are networked for the purpose of sharing inventory, fleet, equipment, systems, and even employees, all for the purpose of optimizing the customer delivery experience. Though not ubiquitous yet, the company is moving in that direction. As of the end of the latest fiscal year, these networked branches totaled 250 in all. Although the company may seem like a low-tech outfit, management does take pride in some of the digital initiatives the company has undertaken. For instance, the company currently has a software solution called Beacon PRO+ that operates as its proprietary digital account management suite. Through this, customers are able to manage their business with the enterprise online. The company also has another software solution called Beacon 3D+ that operates as a roofing estimating tool for its residential customers. Customers are also able to search the catalog of products the company has, accessing real-time pricing. Customers are also able to place orders, track deliveries, monitor local storm activity, and more through the company's software solutions. Author - SEC EDGAR Data Normally when I analyze a company, I like to look at fundamental performance covering five years. Sadly, this is not always possible to do with accuracy. In the case of Beacon Roofing Supply, the picture is complicated by the fact that, in early 2021, the business completed the sale of its interior products and insulation businesses in exchange for $850 million in cash. Because of the timing of this transaction, we only have financial statements that would be comparable for the past three years ending in 2021. What data we do have, however, does look promising. Considering revenue, between 2019 and 2021, sales for the company grew from $6 billion to $6.64 billion. This increase was driven by strong demand for both residential and complementary products across all the regions in which the company operates. It also was successful in raising prices for its three main product lines. These are the residential roofing products, non-residential roofing products, and complementary building products that it sells. The greatest growth for the company (from a dollar perspective) from 2020 to 2021 when essentially all of that revenue increase took place came from the residential roofing products category, with revenue skyrocketing by 14.2%. Author - SEC EDGAR Data The picture for the business, it should be said, is rather odd because management elected to move their year-end reporting period to December of each year. This has resulted in two different measures of annual performance for the 2020 and 2021 fiscal years. Using the new time period the company elected, sales last year would have been $6.82 billion instead of $6.65 billion. And for 2020 it would be $6.08 billion. Management attributed this move to the company's desire to better align their financial reporting calendar with many of the other players in the space and to provide internal benefits by shifting the timing of budgeting, physical inventory, and performance review cycles away from the busiest time of the year for it. This also happened to coincide with multiple transactions that occurred near the end of last year, including the sale of its solar products business, an entity that generated about $111 million in sales annually. Profitability for the company has been a bit more complicated to understand. In each of the past three years, for instance, net income came in negative. And on that front, there was no real trend. However, operating cash flow was positive, even though it was volatile. After rising from $212.7 million in 2019 to $479.3 million in 2020, it then plunged to $78 million last year. But if we were to adjust for changes in working capital, it would have risen consistently, climbing from $291.6 million to $438.8 million. Meanwhile, EBITDA for the firm also improved nicely, climbing from $383.1 million to $654.7 million over the same window of time. Once again, we also need to pay attention to the updated financial results of the company to account for the transition period. Net income in 2020 using this convention was negative to the tune of $9.9 million. In 2021, profits rose to $241.9 million. Adjusted net income, meanwhile, rose from $198.6 million to $394.4 million. Operating cash flow did fall, dropping from $565.5 million to $166.7 million. But if we adjust for changes in working capital, it would have risen from $362.7 million to $463.4 million. Meanwhile, EBITDA for the company also increased, climbing from $464.6 million to $685.9 million. Author - SEC EDGAR Data When it comes to the 2022 fiscal year, the company has continued to see strong performance. Revenue in the first half of the year came in at $4.05 billion. This is 26.8% higher than the $3.19 billion seen just one year earlier. Growth in the second quarter alone was still robust, with sales of $2.36 billion coming in 26% above the $1.87 billion achieved last year. Once again, the company has continued to benefit from favorable industry conditions. On the bottom line, performance has also been favorable. Net income in the first half of last year came in at $69.3 million. This increased to $230.3 million in the first half of 2022. Operating cash flow did decline, dropping from $18.7 million to negative $187 million. But if we were to adjust for changes in working capital, it would have more than doubled from $156.8 million to $323.1 million. Meanwhile, EBITDA for the company also improved, climbing from $303.8 million to $447.2 million. Author - SEC EDGAR Data Although investors might be worried about current market conditions, management remains hopeful for the future. Their current goal, despite problems in the industry, is to grow sales to $9 billion per year by 2025. That implies an annualized growth rate of roughly 8%. In that vein, the company has embarked on a number of interesting transactions. In April of this year, for instance, the company announced the acquisition of Wichita Falls Builders Wholesale for an undisclosed sum. The company also completed, in early June, the acquisition of Complete Supply. Even as the company continues to invest for growth, it also seems to be committed to the idea of buying back stock. In June of this year, the company announced one of two accelerated share repurchase programs. This particular repurchase was in the amount of $250 million and followed one from March in the amount of $125 million.

Sep 07
Here's Why Beacon Roofing Supply (NASDAQ:BECN) Has Caught The Eye Of Investors

Here's Why Beacon Roofing Supply (NASDAQ:BECN) Has Caught The Eye Of Investors

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story...

Shareholder Returns

BECNUS Trade DistributorsUS Market
7D12.4%0.1%-2.5%
1Y19.4%-12.1%-23.2%

Return vs Industry: BECN exceeded the US Trade Distributors industry which returned -12.1% over the past year.

Return vs Market: BECN exceeded the US Market which returned -23.2% over the past year.

Price Volatility

Is BECN's price volatile compared to industry and market?
BECN volatility
BECN Average Weekly Movement4.5%
Trade Distributors Industry Average Movement5.8%
Market Average Movement6.8%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.8%

Stable Share Price: BECN is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: BECN's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19286,676Julian Francishttps://www.becn.com

Beacon Roofing Supply, Inc., together with its subsidiaries, distributes residential and non-residential roofing materials, and complementary building products to contractors, home builders, building owners, lumberyards, and retailers. It offers pitched roofing and low slope roof products; gutters and sidings; building materials, such as lumber and composite, skylights and window, plywood and OSB, decking and railing, and HVAC products; and foam board, spray foam, roll, batt, mineral wool, fiberglass, and commercial insulation products, as well as radiant barriers and blown-in insulation and equipment. The company also provides above grade and below grade membranes and coatings, deck and floor coatings, plaza deck waterproofing products, damp proofing coatings, and air and vapor barriers; tools and equipment, including power and hand tools, ladders and scaffolding, air tools and compressors, nails, screws and fasteners, generators, work wear and safety gear, job site supplies, tool bags and belts, welding and soldering, cleaning supplies, drill bits, and saw blades; and solar panels, mounting hardware, inverters, and storage and batteries.

Beacon Roofing Supply Fundamentals Summary

How do Beacon Roofing Supply's earnings and revenue compare to its market cap?
BECN fundamental statistics
Market CapUS$3.56b
Earnings (TTM)US$359.50m
Revenue (TTM)US$7.87b

10.3x

P/E Ratio

0.5x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
BECN income statement (TTM)
RevenueUS$7.87b
Cost of RevenueUS$5.79b
Gross ProfitUS$2.09b
Other ExpensesUS$1.73b
EarningsUS$359.50m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)5.53
Gross Margin26.49%
Net Profit Margin4.57%
Debt/Equity Ratio100.3%

How did BECN perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is BECN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for BECN?

Other financial metrics that can be useful for relative valuation.

BECN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.8x
Enterprise Value/EBITDA7.8x
PEG Ratio13x

Price to Earnings Ratio vs Peers

How does BECN's PE Ratio compare to its peers?

BECN PE Ratio vs Peers
The above table shows the PE ratio for BECN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average9.7x
UNVR Univar Solutions
6.5x-3.5%US$3.8b
TRTN Triton International
5.1x-5.1%US$3.4b
HRI Herc Holdings
11.3x17.2%US$3.1b
AIT Applied Industrial Technologies
15.8x7.8%US$4.0b
BECN Beacon Roofing Supply
10.3x0.8%US$3.6b

Price-To-Earnings vs Peers: BECN is expensive based on its Price-To-Earnings Ratio (10.3x) compared to the peer average (9.7x).


Price to Earnings Ratio vs Industry

How does BECN's PE Ratio compare vs other companies in the US Trade Distributors Industry?

Price-To-Earnings vs Industry: BECN is good value based on its Price-To-Earnings Ratio (10.3x) compared to the US Trade Distributors industry average (11x)


Price to Earnings Ratio vs Fair Ratio

What is BECN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

BECN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio10.3x
Fair PE Ratio15.1x

Price-To-Earnings vs Fair Ratio: BECN is good value based on its Price-To-Earnings Ratio (10.3x) compared to the estimated Fair Price-To-Earnings Ratio (15.1x).


Share Price vs Fair Value

What is the Fair Price of BECN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: BECN ($56.88) is trading below our estimate of fair value ($79.57)

Significantly Below Fair Value: BECN is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is Beacon Roofing Supply forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


0.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BECN's forecast earnings growth (0.8% per year) is below the savings rate (1.9%).

Earnings vs Market: BECN's earnings (0.8% per year) are forecast to grow slower than the US market (14.8% per year).

High Growth Earnings: BECN's earnings are forecast to grow, but not significantly.

Revenue vs Market: BECN's revenue (0.3% per year) is forecast to grow slower than the US market (7.7% per year).

High Growth Revenue: BECN's revenue (0.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if BECN's Return on Equity is forecast to be high in 3 years time


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Past Performance

How has Beacon Roofing Supply performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


23.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: BECN has high quality earnings.

Growing Profit Margin: BECN's current net profit margins (4.6%) are higher than last year (2.1%).


Past Earnings Growth Analysis

Earnings Trend: BECN's earnings have grown significantly by 23.9% per year over the past 5 years.

Accelerating Growth: BECN's earnings growth over the past year (122.9%) exceeds its 5-year average (23.9% per year).

Earnings vs Industry: BECN earnings growth over the past year (122.9%) exceeded the Trade Distributors industry 58.7%.


Return on Equity

High ROE: Whilst BECN's Return on Equity (20.88%) is high, this metric is skewed due to their high level of debt.


Discover strong past performing companies

Financial Health

How is Beacon Roofing Supply's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: BECN's short term assets ($3.3B) exceed its short term liabilities ($1.8B).

Long Term Liabilities: BECN's short term assets ($3.3B) exceed its long term liabilities ($2.5B).


Debt to Equity History and Analysis

Debt Level: BECN's net debt to equity ratio (97.3%) is considered high.

Reducing Debt: BECN's debt to equity ratio has increased from 84.7% to 100.3% over the past 5 years.

Debt Coverage: BECN's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: BECN's interest payments on its debt are well covered by EBIT (10.2x coverage).


Balance Sheet


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Dividend

What is Beacon Roofing Supply current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Beacon Roofing Supply Dividend Yield vs Market
How does Beacon Roofing Supply dividend yield compare to the market?
SegmentDividend Yield
Company (Beacon Roofing Supply)n/a
Market Bottom 25% (US)1.7%
Market Top 25% (US)4.7%
Industry Average (Trade Distributors)2.7%
Analyst forecast in 3 Years (Beacon Roofing Supply)0%

Notable Dividend: Unable to evaluate BECN's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate BECN's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if BECN's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if BECN's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as BECN has not reported any payouts.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

Julian Francis (55 yo)

3.17yrs

Tenure

US$5,661,918

Compensation

Mr. Julian G. Francis has been President, Chief Executive Officer of Beacon Roofing Supply, Inc. since August 2019 and serves as its Director since August 22, 2019. Mr. Francis has been the President of In...


CEO Compensation Analysis

Julian Francis's Compensation vs Beacon Roofing Supply Earnings
How has Julian Francis's remuneration changed compared to Beacon Roofing Supply's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$360m

Mar 31 2022n/an/a

US$279m

Dec 31 2021n/an/a

US$218m

Sep 30 2021US$6mUS$811k

US$197m

Jun 30 2021n/an/a

US$161m

Mar 31 2021n/an/a

US$86m

Dec 31 2020n/an/a

-US$34m

Sep 30 2020US$4mUS$754k

-US$105m

Jun 30 2020n/an/a

-US$146m

Mar 31 2020n/an/a

-US$114m

Dec 31 2019n/an/a

-US$58m

Sep 30 2019US$3mUS$114k

-US$43m

Compensation vs Market: Julian's total compensation ($USD5.66M) is about average for companies of similar size in the US market ($USD6.90M).

Compensation vs Earnings: Julian's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: BECN's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

Experienced Board: BECN's board of directors are considered experienced (6.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

NasdaqGS:BECN Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
29 Jul 22BuyUS$5,999,999Clayton, Dubilier & Rice, LLCCompany103,931US$57.73
19 May 22SellUS$143,382James GosaIndividual2,300US$62.34
29 Apr 22BuyUS$5,999,949Clayton, Dubilier & Rice, LLCCompany102,219US$58.70
28 Jan 22BuyUS$5,999,999Clayton, Dubilier & Rice, LLCCompany107,456US$55.84
29 Oct 21BuyUS$5,999,980Clayton, Dubilier & Rice, LLCCompany116,945US$51.31

Ownership Breakdown

What is the ownership structure of BECN?
Owner TypeNumber of SharesOwnership Percentage
Individual Insiders354,8440.5%
VC/PE Firms14,859,57920.7%
Institutions56,617,26978.8%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 95.43% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
22.86%
Clayton, Dubilier & Rice, LLC
14,859,579$845.2m0.58%7.64%
15.84%
FMR LLC
10,298,372$585.8m1.61%0.05%
7.9%
The Vanguard Group, Inc.
5,136,420$292.2m-4.81%0.01%
6.43%
Dimensional Fund Advisors LP
4,179,065$237.7m-3.47%0.06%
5.61%
BlackRock, Inc.
3,645,823$207.4m-1.84%0.01%
4.84%
American Century Investment Management Inc
3,147,741$179.0m-13.11%0.13%
4.32%
T. Rowe Price Group, Inc.
2,806,283$159.6m3.96%0.02%
2.72%
Fuller & Thaler Asset Management, Inc.
1,768,041$100.6m-11.2%0.7%
2.65%
Fiduciary Management, Inc.
1,722,926$98.0m18.72%0.77%
2.6%
Frontier Capital Management Co LLC
1,689,713$96.1m19.94%0.94%
2.03%
Fisher Asset Management, LLC
1,321,869$75.2m-2.18%0.05%
1.84%
Eaton Vance Management
1,197,515$68.1m-1.45%0.03%
1.72%
State Street Global Advisors, Inc.
1,120,577$63.7m-1.09%no data
1.52%
Northern Trust Global Investments
989,312$56.3m-11.01%0.01%
1.51%
Geode Capital Management, LLC
981,420$55.8m-2.42%0.01%
1.45%
Franklin Resources, Inc.
942,653$53.6m-10.88%0.02%
1.42%
Premier Fund Managers Limited
923,144$52.5m5.39%0.61%
1.35%
Iridian Asset Management LLC
876,047$49.8m-8.86%4.09%
1.32%
Miton Capital Partners Limited
860,062$48.9m0%3.27%
1.03%
Goldman Sachs Asset Management, L.P.
671,698$38.2m-21.52%0.02%
0.99%
WCM Investment Management, LLC
641,338$36.5m-1.17%0.08%
0.97%
Charles Schwab Investment Management, Inc.
632,804$36.0m1.6%0.01%
0.88%
Vaughan Nelson Investment Management, L.P.
574,235$32.7m-7.55%0.44%
0.81%
Norges Bank Investment Management
523,284$29.8m0%no data
0.8%
RBC Global Asset Management Inc.
522,158$29.7m-0.67%0.02%

Company Information

Beacon Roofing Supply, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Beacon Roofing Supply, Inc.
  • Ticker: BECN
  • Exchange: NasdaqGS
  • Founded: 1928
  • Industry: Trading Companies and Distributors
  • Sector: Capital Goods
  • Implied Market Cap: US$3.557b
  • Shares outstanding: 65.00m
  • Website: https://www.becn.com

Number of Employees


Location

  • Beacon Roofing Supply, Inc.
  • 505 Huntmar Park Drive
  • Suite 300
  • Herndon
  • Virginia
  • 20170
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BECNNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDSep 2004
OWYDB (Deutsche Boerse AG)YesCommon StockDEEURSep 2004

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/10/03 00:00
End of Day Share Price2022/10/03 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.