A Fresh Look at AZZ (AZZ) Valuation Following Recent Share Price Momentum

AZZ (AZZ) shares have seen some movement lately, prompting investors to weigh the company’s recent track record and broader trends in the capital goods sector. With fresh data out, let’s take a closer look at what is shaping sentiment.

See our latest analysis for AZZ.

AZZ’s share price has rallied more than 22% year-to-date, putting the stock well ahead of many peers in the capital goods industry. Although momentum slowed slightly over the past quarter, long-term investors have been rewarded, with total shareholder return reaching 157% over the last three years as recent dealmaking and operational updates continue to influence sentiment.

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With AZZ outperforming many of its industry peers and trading about 24% below the average analyst price target, the main question is whether the stock still offers value or if the market has already priced in its future growth prospects.

Most Popular Narrative: 19.5% Undervalued

With the narrative’s fair value at $125.89 compared to AZZ’s last close of $101.33, valuation sentiment points to meaningful upside. The narrative’s approach is built around AZZ’s multi-year business catalysts, not just recent market moves.

AZZ’s new greenfield facility near St. Louis, Missouri is ramping up production, which could drive future revenue growth as it expands capacity and taps into strong local demand. This investment is expected to positively impact earnings as the facility becomes fully operational and contributes to higher sales volumes.

Read the complete narrative.

Curious what financial forecasts anchor that optimistic price? There is a bold mix of earnings trends and margin pressures baked into the narrative. Want to know how future profits are expected to reshape the company’s value? The real drivers behind the price target might surprise you.

Result: Fair Value of $125.89 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, unpredictable weather disruptions and uncertainty about tariffs could quickly change AZZ’s outlook. These factors could potentially impact margins and near-term revenue growth.

Find out about the key risks to this AZZ narrative.

Another View: Discounted Cash Flow Model Signals Overvaluation

While analyst price targets suggest upside, our SWS DCF model tells a different story for AZZ. According to this method, the company is trading above its estimated fair value of $69.04 per share. This implies that shares may actually be overvalued. Is the market missing something, or is optimism already reflected in the price?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out AZZ for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 855 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own AZZ Narrative

If you think the story could unfold differently or want hands-on insight, you can easily build your own narrative in just a few minutes using Do it your way.

A great starting point for your AZZ research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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