Core & Main (NYSE:CNM) - Share price, News & Analysis

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

CNM ($24.56) is trading below our estimate of [[fair value]] ($41.42)

CNM fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	1/6
Past Performance	5/6
Financial Health	3/6
Dividends	0/6

CNM Stock Overview

Rewards

Trading at 40.7% below our estimate of its fair value

Earnings are forecast to grow 12.14% per year

Earnings grew by 122.8% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Shareholders have been diluted in the past year

Core & Main Competitors

SiteOne Landscape Supply

NYSE:SITE

US$6.4b

WESCO International

NYSE:WCC

US$7.3b

MSC Industrial Direct

NYSE:MSM

US$4.8b

Univar Solutions

NYSE:UNVR

US$4.6b

Price History & Performance

Summary of all time highs, changes and price drops for Core & Main
Historical stock prices
Current Share Price	US$24.56
52 Week High	US$32.54
52 Week Low	US$20.00
Beta	0
1 Month Change	14.23%
3 Month Change	15.74%
1 Year Change	-6.08%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	3.63%

Recent News & Updates

Jul 19

Core & Main acquires wastewater products firm based in Southern California

Core & Main (NYSE:CNM) stated Tuesday it has signed a definitive deal to acquire Inland Water Works Supply, a full-service distributor of water and wastewater products, based in Southern California. Financial terms of the transaction were not disclosed. "This strategic acquisition will allow us to better serve our combined customer base alongside a highly-experienced and cohesive team,” said CNM CEO Steve LeClair. Established in 1952, Inland Water Works Supply provides products for new water and sewer construction as well as for the maintenance and repair of existing water and sewer systems to municipalities and contractors throughout Southern California. Its facility is located in San Bernardino, California. Earlier: Core & Main GAAP EPS of $0.50 beats by $0.16, revenue of $1.59B beats by $190M

Jun 20

Core & Main, Inc.'s (NYSE:CNM) Intrinsic Value Is Potentially 68% Above Its Share Price

In this article we are going to estimate the intrinsic value of Core & Main, Inc. ( NYSE:CNM ) by taking the forecast...

Shareholder Returns

	CNM	US Trade Distributors	US Market
7D	5.5%	4.7%	3.6%
1Y	-6.1%	5.7%	-9.6%

Return vs Industry: CNM underperformed the US Trade Distributors industry which returned 5.7% over the past year.

Return vs Market: CNM exceeded the US Market which returned -9.6% over the past year.

Price Volatility

Is CNM's price volatile compared to industry and market?
CNM volatility
CNM Average Weekly Movement	6.0%
Trade Distributors Industry Average Movement	6.6%
Market Average Movement	7.7%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: CNM is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: CNM's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1874	4,100	Steve LeClair	https://www.coreandmain.com

Core & Main, Inc. distributes water, wastewater, storm drainage, and fire protection products and related services to municipalities, private water companies, and professional contractors in the municipal, non-residential, and residential end markets in the United States. Its products include pipes, valves, hydrants, fittings, and other products and services; storm drainage products, such as corrugated piping systems, retention basins, inline drains, manholes, grates, geosynthetics, and other related products; fire protection products, including fire protection pipes, sprinkler heads and other devices, fire suppression systems, and related accessories, as well as fabrication services; and meter products, such as smart meter products, installation, software and other services. The company’s specialty products and services are used in the maintenance, repair, replacement, and construction of water and fire protection infrastructure.

Core & Main Fundamentals Summary

How do Core & Main's earnings and revenue compare to its market cap?
CNM fundamental statistics
Market Cap	US$6.05b
Earnings (TTM)	US$149.00m
Revenue (TTM)	US$5.55b

27.7x

P/E Ratio

0.7x

P/S Ratio

Is CNM overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CNM income statement (TTM)
Revenue	US$5.55b
Cost of Revenue	US$4.10b
Gross Profit	US$1.44b
Other Expenses	US$1.30b
Earnings	US$149.00m

Last Reported Earnings

May 01, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.89
Gross Margin	26.03%
Net Profit Margin	2.69%
Debt/Equity Ratio	76.0%

How did CNM perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

2/6

Valuation Score 2/6

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 CNM?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for CNM. This is calculated by dividing CNM's market cap by their current preferred multiple.
What is CNM's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$6.05b

CNM 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/Revenue	1.1x
Enterprise Value/EBITDA	9.2x
PEG Ratio	2.3x

Price to Earnings Ratio vs Peers

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

CNM PE Ratio vs Peers

The above table shows the PE ratio for CNM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	14.5x
SITE SiteOne Landscape Supply	22.6x	-0.5%	US$6.4b
WCC WESCO International	11.6x	8.2%	US$7.3b
MSM MSC Industrial Direct	16x	7.8%	US$4.8b
UNVR Univar Solutions	7.9x	-3.5%	US$4.6b
CNM Core & Main	27.7x	12.1%	US$6.1b

Price-To-Earnings vs Peers: CNM is expensive based on its Price-To-Earnings Ratio (27.7x) compared to the peer average (14.5x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: CNM is expensive based on its Price-To-Earnings Ratio (27.7x) compared to the US Trade Distributors industry average (14.1x)

Price to Earnings Ratio vs Fair Ratio

What is CNM'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.

CNM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	27.7x
Fair PE Ratio	22.6x

Price-To-Earnings vs Fair Ratio: CNM is expensive based on its Price-To-Earnings Ratio (27.7x) compared to the estimated Fair Price-To-Earnings Ratio (22.6x).

Share Price vs Fair Value

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

Below Fair Value: CNM ($24.56) is trading below our estimate of fair value ($41.42)

Significantly Below Fair Value: CNM 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 less than 20% higher than the current share price.

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Future Growth

How is Core & Main forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

12.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CNM's forecast earnings growth (12.1% per year) is above the savings rate (1.9%).

Earnings vs Market: CNM's earnings (12.1% per year) are forecast to grow slower than the US market (14.5% per year).

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

Revenue vs Market: CNM's revenue (1.1% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: CNM's revenue (1.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: CNM's Return on Equity is forecast to be low in 3 years time (16.1%).

Discover growth companies

Past Performance

How has Core & Main 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

37.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CNM has high quality earnings.

Growing Profit Margin: CNM's current net profit margins (2.7%) are higher than last year (1.7%).

Past Earnings Growth Analysis

Earnings Trend: CNM's earnings have grown significantly by 37.8% per year over the past 5 years.

Accelerating Growth: CNM's earnings growth over the past year (122.8%) exceeds its 5-year average (37.8% per year).

Earnings vs Industry: CNM earnings growth over the past year (122.8%) exceeded the Trade Distributors industry 70.5%.

Return on Equity

High ROE: CNM's Return on Equity (16.7%) is considered low.

Discover strong past performing companies

Financial Health

How is Core & Main'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: CNM's short term assets ($2.2B) exceed its short term liabilities ($1.1B).

Long Term Liabilities: CNM's short term assets ($2.2B) exceed its long term liabilities ($1.8B).

Debt to Equity History and Analysis

Debt Level: CNM's net debt to equity ratio (76%) is considered high.

Reducing Debt: Insufficient data to determine if CNM's debt to equity ratio has reduced over the past 5 years.

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

Interest Coverage: CNM's interest payments on its debt are well covered by EBIT (7.2x coverage).

Balance Sheet

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Dividend

What is Core & Main 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

1.91%

Forecast Dividend Yield

Dividend Yield vs Market

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

High Dividend: Unable to evaluate CNM'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 CNM's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CNM'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 CNM has not reported any payouts.

Discover strong dividend paying companies

Management

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

1.3yrs

Average management tenure

CEO

Steve LeClair (53 yo)

1.08yrs

Tenure

US$2,292,431

Compensation

Mr. Stephen O. LeClair, also known as Steve, has been the Chief Executive Officer and Director of Core & Main, Inc. since July 2021. He served as a Director of Core & Main Holdings, LP since September 2017...

CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD2.29M) is below average for companies of similar size in the US market ($USD8.11M).

Compensation vs Earnings: Insufficient data to compare Steve's compensation with company performance.

Leadership Team

Experienced Management: CNM's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.

Board Members

Experienced Board: CNM's board of directors are not considered experienced ( 1.1 years average tenure), which suggests a new board.

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

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.2%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/16 00:00
End of Day Share Price	2022/08/16 00:00
Earnings	2022/05/01
Annual Earnings	2022/01/30