DOOR Stock Overview
Masonite International Corporation designs, manufactures, markets, and distributes interior and exterior doors for the new construction and repair, renovation, and remodeling sectors of the residential and non-residential building construction markets worldwide.
Masonite International Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$71.29|
|52 Week High||US$128.87|
|52 Week Low||US$66.34|
|1 Month Change||-12.87%|
|3 Month Change||-9.52%|
|1 Year Change||-34.78%|
|3 Year Change||24.63%|
|5 Year Change||4.76%|
|Change since IPO||256.45%|
Recent News & Updates
What Is Masonite International Corporation's (NYSE:DOOR) Share Price Doing?
While Masonite International Corporation ( NYSE:DOOR ) might not be the most widely known stock at the moment, it saw a...
Masonite: Current Pricing Is Too Optimistic
Long-term housing trends are supportive of Masonite's future growth. Short-term volatility trends warrant a greater consideration for downside risk. Utilizing descriptive analytics from Masonite's historical performance through both positive and negative time periods can help postulate varying potential future outcomes. Masonite insider transactions do not exude confidence for retail investors. Masonite is currently trading at the high end of its valuation based on multiple scenarios. Thesis Masonite (DOOR) is currently trading at a premium that is not factoring in any margin of safety for investors. Analyzing Masonite through the lens of having potentially both negative and positive outcomes over the next decade is important. The current long-term housing price index trends are favorable for Masonite but the short-term volatility is cause for contingency planning. Masonite insiders observably trade with inconsistent patterns resulting in net selling overall. This does not exude confidence for retail investors and requires a margin of safety before establishing a position. Masonite showed strengthening performance trends through the past decade but the current price does not factor in any potential negative outcomes as experienced from 2007 to 2012. Introduction The intent of this analysis is to assess whether Masonite is a good long-term investment. In my attempt to analyze Masonite, I focused on a few key aspects to determine whether I would be willing to start establishing a position. Given the market that Masonite operates in, it is important to consider multiple scenarios for valuation. The process for the analysis is as follows: Accentuate potential risk outcomes using significant macro-economic trends Utilize descriptive analytics to determine multiple discounted cash flow ((DCF)) inputs Discounted cash flow valuation scenarios Gain perspective on insider transactions This article is not a complete portrayal of each and every variable that affects Masonite as a firm. The intent is to highlight important aspects and derive assumptions from those in a relevant manner to determine potential valuation models. Macroeconomic Trends Housing market trends are extremely important for the successful growth of Masonite. The first step in the analysis was to analyze multiple housing indicators and determine if one has a high correlation with Masonite revenue. The approach considered using housing price data and housing new starts as a few potential key driving variables which are referenced as some of the factors that influence product demand on Masonite's 10Q. The All-Transactions House Price Index ((HPI)) for the United States and the New Privately-Owned Housing Units Started: Total Units (New Residential Construction) were selected as the potential driving variables due to their comprehensive nature in the portrayal of a healthy housing market. The HPI is a weighted broad measure of the movement of single-family home prices. It "serves as a timely, accurate indicator of house price trends at various geographic levels" (Figure 1). The figure shows a long term trend line of the weighted index and has a few interesting observable qualities. The first observation I notice is how the index rate of change increased upwards at the end of 2020 and into early 2021. This rate increase over the past two years is unlike any other period since 1975 according to the figure. The second observation that is most notable is how there was a large downtrend in the index from 2007 until 2012 which resulted in an approximate 20% decrease from peak to trough. The third observation is how the housing index seems to be trending in a generally positive manner throughout the time period. Figure 1. All-transactions housing price index (FRED & Author) The New Residential Construction data is based on the number of new housing units authorized by building permits (Figure 2). The figure shows the long-term cyclicality of building permits from 1959 until 2022. The observation of this data represents the ebbs and floods of building permits which are driven by investor and personal sentiment among other factors. The current trend seems to be on a decade long uptrend with periods of volatility. It is beyond the scope of this article to attempt to forecast where the peak of the trend will reside and the subsequent effects. Figure 2. New residential construction (FRED and Author) The next step was to utilize an ANOVA model and determine which of the variables carried significance with the revenues of Masonite since 2007 (Figure 3). The results demonstrate that the better variable to utilize is the HPI since it has a much stronger correlation with Masonite revenue. This is observable by having a significance of less than 0.0001 and through the relatively linear trend as seen in the right-most aspect of figure 3. Figure 3. ANOVA of variables (Author) Finally, a simple linear regression is performed to determine that there is a high correlation between the HPI and the total quarterly revenue of Masonite (R2 = 0.908, P < 0.0001, Figure 4). The formula for solving for quarterly revenue is $128,587 + (952.6 * HPI). This suggests that we could solve quarterly revenue for different values of HPI along the line of best fit. Figure 4. Simple linear regression of HPI and revenue (Author) What is important to deduce from the analysis of macro-housing indicators is that the long-term trend of the HPI is likely to be beneficial for Masonite since there historically is a positive trend in the overall HPI index. There is also a possibility that a large downturn in the HPI could significantly affect the valuation of Masonite. We clearly observe that the rate of change of the index through the past two years has been larger than its historical amount and that housing construction building permits are typically cyclical. All of these are important points to consider when developing a thesis for investments. It is also important to understand that historical trends are not the only consideration for forecasting and that timing the market is not a realistic way to invest for retail investors. Therefore, hypothesizing different scenarios and their likelihood is the most logical way to proceed. Risk Outcomes The regression is important because it allows us to statistically derive a risk outcome based from historical data. We can observe the HPI trends over time noting that the period between 2007 and 2012 showed a decrease in the index value. As we recall, an approximate 20% downturn occurred in that time-period which could be used as an aid to calculate the approximate revenue impact that would have on Masonite. The most recent reading of the HPI occurred in Q1 of 2022 with a value of 578.04. This means an adjustment of 20% would result in an HPI value of 462.432. Utilizing that value would equal a quarterly revenue of $569,099 which annualizes to $2,276,398.89 which is a large decrease from the current annualized revenue. Another way of considering the risk to revenue of Masonite would be to consider the firm's demonstrated performance over the same time period of poor performance. The annual revenue in 2007 was approximately $2,174,431,000 compared to the low in 2010 of $1,383,271,000 which is a total decline of approximately 36% spread over multiple years. This revenue is significantly lower than the current estimated revenue and would place pressure on the price action of Masonite if this risk were to materialize. This potential risk outcome is not currently factored into the current price action of Masonite and modeling a scenario that includes the statistical values is important to consider for downside perspective. Descriptive Analytics The descriptive analytics are going to be used to derive inputs for the valuation model. The free cash flow and revenue can be utilized to create discounted cash flow models for estimating a range of implied values of the firm that may be suitable for different investors. Free Cash Flow Margins The annual free cash flow margin distribution since 2007 shows a mean FCF margin of 2.83% and a median of 2.69% (Figure 5). It also shows that the 95% confidence interval is from 0.68% to 4.97% meaning that the FCF margin values historically have fallen 95% of the time between that range. The quarterly free cash flow margin distribution since Q1 2012 shows a mean FCF margin of 3.99% and a median of 4.92% (Figure 5). It also shows that the 95% confidence interval is from 2.03% to 5.95% meaning that the FCF margin values historically have fallen 95% of the time between that range. The difference between the quarterly and annualized margins is likely due to the time periods covered. Since the annualized margins are from 2007, the results factor in a period of more challenging firm performance. Multiple FCF margins will be utilized for valuation in this analysis to incorporate a range of potential outcomes. It is important to note that the operating performance of Masonite has improved due to factors such as technology improvement, systems improvement, etc... though it is indeterminate to know whether the improved margins could be sustained if macroeconomic pressures increased on Masonite given the current business model. Figure 5. Free cash flow margin distribution, annual and quarterly (Author) Revenue Growth Rates The historical revenue growth rates combined with short-term analyst estimates or Masonite's revenue forecasts can help hypothesize revenue into the future. The mean and median annualized revenue growth rate since 2007 is 2.14% and 3.69% respectively. This incorporates the two negative years around the period of 2007. The 95% confidence interval ranges from -3.35% to 7.63% meaning that the revenue growth values have historically fallen 95% of the time between that range. Figure 6. Revenue growth rates, annual (Author) According to TIKR Terminal, analysts' expectations estimate the revenue in 2024 to grow to approximately $3 billion (Figure 7). Figure 7. Analysts revenue estimates through 2024 (TIKR Terminal) According to Masonite, their 2025 Centennial Plan Financial Goal is to achieve approximately $4 billion in revenue through 2025 (Figure 8). Figure 8. Masonite revenue Centennial Plan goal (Masonite Q2 2022 Earnings Presentation) The different revenue estimates can be utilized to create a range of potential outcomes which investors can factor into their decision making process. Valuation Scenarios The valuation scenarios will utilize a variety of assumptions to aid in the determination of a range of fair values for investors with different perspectives on the potential outcomes as explored in this article. The discount rate utilized will be 10% chosen based off my desired return expectation. Scenario 1 Scenario 1 attempts to be a statistically-based model based on the historical performance of Masonite since 2007. The revenue estimates through 2024 are analyst estimates and then increase at the median annualized historical rate of 3.69% per year with a terminal growth rate of 3%. The FCF margins utilize the historical median of 2.69%. These inputs combined with the current net debt and shares outstanding as of Q2 2022 result in an implied value of $14.32 per share. This scenario incorporates a risk component of the 2007 to 2012 declining time period and is a much more cautionary model.
Masonite Non-GAAP EPS of $0.48 misses by $1.98, revenue of $1.02B beats by $294.19M
Masonite press release (NYSE:DOOR): Q2 Non-GAAP EPS of $0.48 misses by $1.98. Revenue of $1.02B (+54.0% Y/Y) beats by $294.19M.
Is Masonite International (NYSE:DOOR) A Risky Investment?
David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...
|DOOR||US Building||US Market|
Return vs Industry: DOOR underperformed the US Building industry which returned -23.3% over the past year.
Return vs Market: DOOR underperformed the US Market which returned -21.5% over the past year.
|DOOR Average Weekly Movement||5.2%|
|Building Industry Average Movement||5.3%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.6%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: DOOR is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.
Volatility Over Time: DOOR's weekly volatility (5%) has been stable over the past year.
About the Company
Masonite International Corporation designs, manufactures, markets, and distributes interior and exterior doors for the new construction and repair, renovation, and remodeling sectors of the residential and non-residential building construction markets worldwide. It offers molded panel, flush, stile and rail, steel, and fiberglass residential doors, as well as medium-density fiberboard (MDF) and architectural interior doors. The company also provides various door components, including interior door facings, agri-fiber and particleboard door cores, MDF and wood cut-stock components, critical door components, and mineral and particleboard door cores.
Masonite International Fundamentals Summary
|DOOR fundamental statistics|
Is DOOR overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|DOOR income statement (TTM)|
|Cost of Revenue||US$2.12b|
Last Reported Earnings
Jul 03, 2022
Next Earnings Date
|Earnings per share (EPS)||6.23|
|Net Profit Margin||4.99%|
How did DOOR perform over the long term?See historical performance and comparison
Is DOOR undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 6/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for DOOR?
Other financial metrics that can be useful for relative valuation.
|What is DOOR's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does DOOR's PE Ratio compare to its peers?
|DOOR PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
JBI Janus International Group
ROCK Gibraltar Industries
HAYW Hayward Holdings
DOOR Masonite International
Price-To-Earnings vs Peers: DOOR is good value based on its Price-To-Earnings Ratio (11.5x) compared to the peer average (13.3x).
Price to Earnings Ratio vs Industry
How does DOOR's PE Ratio compare vs other companies in the US Building Industry?
Price-To-Earnings vs Industry: DOOR is good value based on its Price-To-Earnings Ratio (11.5x) compared to the US Building industry average (14.6x)
Price to Earnings Ratio vs Fair Ratio
What is DOOR'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.
|Current PE Ratio||11.5x|
|Fair PE Ratio||17.9x|
Price-To-Earnings vs Fair Ratio: DOOR is good value based on its Price-To-Earnings Ratio (11.5x) compared to the estimated Fair Price-To-Earnings Ratio (17.9x).
Share Price vs Fair Value
What is the Fair Price of DOOR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: DOOR ($71.29) is trading below our estimate of fair value ($292.12)
Significantly Below Fair Value: DOOR 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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How is Masonite International forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?
Future Growth Score1/6
Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: DOOR's forecast earnings growth (11.4% per year) is above the savings rate (1.9%).
Earnings vs Market: DOOR's earnings (11.4% per year) are forecast to grow slower than the US market (14.7% per year).
High Growth Earnings: DOOR's earnings are forecast to grow, but not significantly.
Revenue vs Market: DOOR's revenue (2.2% per year) is forecast to grow slower than the US market (7.6% per year).
High Growth Revenue: DOOR's revenue (2.2% 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 DOOR's Return on Equity is forecast to be high in 3 years time
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How has Masonite International performed over the past 5 years?
Past Performance Score3/6
Past Performance Score 3/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: DOOR has a large one-off loss of $74.8M impacting its July 3 2022 financial results.
Growing Profit Margin: DOOR's current net profit margins (5%) are higher than last year (3.5%).
Past Earnings Growth Analysis
Earnings Trend: DOOR's earnings have declined by 4.1% per year over the past 5 years.
Accelerating Growth: DOOR's earnings growth over the past year (59%) exceeds its 5-year average (-4.1% per year).
Earnings vs Industry: DOOR earnings growth over the past year (59%) exceeded the Building industry 32.2%.
Return on Equity
High ROE: Whilst DOOR's Return on Equity (21.57%) is high, this metric is skewed due to their high level of debt.
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How is Masonite International's financial position?
Financial Health Score2/6
Financial Health Score 2/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: DOOR's short term assets ($1.1B) exceed its short term liabilities ($399.1M).
Long Term Liabilities: DOOR's short term assets ($1.1B) do not cover its long term liabilities ($1.2B).
Debt to Equity History and Analysis
Debt Level: DOOR's net debt to equity ratio (95.7%) is considered high.
Reducing Debt: DOOR's debt to equity ratio has increased from 68.9% to 130.7% over the past 5 years.
Debt Coverage: DOOR's debt is not well covered by operating cash flow (18.2%).
Interest Coverage: DOOR's interest payments on its debt are well covered by EBIT (7.4x coverage).
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What is Masonite International current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Dividend Yield vs Market
|Masonite International Dividend Yield vs Market|
|Company (Masonite International)||n/a|
|Market Bottom 25% (US)||1.7%|
|Market Top 25% (US)||4.7%|
|Industry Average (Building)||1.8%|
|Analyst forecast in 3 Years (Masonite International)||n/a|
Notable Dividend: Unable to evaluate DOOR's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate DOOR'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 DOOR's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if DOOR'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 DOOR has not reported any payouts.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Howard Heckes (57 yo)
Mr. Howard Carl Heckes serves as Independent Director at The AZEK Company Inc. since November 18, 2020. Mr. Heckes has been President and Chief Executive Officer of Masonite International Corporation since...
CEO Compensation Analysis
|Howard Heckes's Compensation vs Masonite International Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Jul 03 2022||n/a||n/a|
|Apr 03 2022||n/a||n/a|
|Jan 02 2022||US$5m||US$890k|
|Oct 03 2021||n/a||n/a|
|Jul 04 2021||n/a||n/a|
|Apr 04 2021||n/a||n/a|
|Jan 03 2021||US$6m||US$869k|
|Sep 27 2020||n/a||n/a|
|Jun 28 2020||n/a||n/a|
|Mar 29 2020||n/a||n/a|
|Dec 29 2019||US$3m||US$474k|
Compensation vs Market: Howard's total compensation ($USD4.89M) is about average for companies of similar size in the US market ($USD5.59M).
Compensation vs Earnings: Howard's compensation has been consistent with company performance over the past year.
Experienced Management: DOOR's management team is considered experienced (3.3 years average tenure).
Experienced Board: DOOR's board of directors are considered experienced (6.6 years average tenure).
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
|24 Feb 22||BuyUS$85,800||Jay Steinfeld||Individual||1,000||US$85.80|
|03 Jan 22||SellUS$14,413,324||Praesidium Investment Management Company, LLC||Company||125,227||US$118.97|
|12 Nov 21||SellUS$999,234||Robert Lewis||Individual||8,600||US$116.19|
|10 Nov 21||BuyUS$216,800||Praesidium Investment Management Company, LLC||Company||1,826||US$118.73|
|Owner Type||Number of Shares||Ownership Percentage|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Masonite International Corporation's employee growth, exchange listings and data sources
- Name: Masonite International Corporation
- Ticker: DOOR
- Exchange: NYSE
- Founded: 1925
- Industry: Building Products
- Sector: Capital Goods
- Implied Market Cap: US$1.587b
- Shares outstanding: 22.26m
- Website: https://www.masonite.com
Number of Employees
- Masonite International Corporation
- 1242 East 5th Avenue
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|DOOR||NYSE (New York Stock Exchange)||Yes||Common Shares||US||USD||Jun 2009|
|MII||DB (Deutsche Boerse AG)||Yes||Common Shares||DE||EUR||Jun 2009|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/30 00:00|
|End of Day Share Price||2022/09/30 00:00|
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.