← Back

AZZ: AZZ Inc. Posts Record Sales, Driven by Metal Coatings Growth

AZZ Inc. reported record sales of $426 million in the third quarter of fiscal 2026, a 5.5% increase from the prior year period. The growth was primarily driven by the Metal Coatings segment, which saw sales rise 15.7% year-over-year, fueled by higher volumes and strong demand from infrastructure projects. Adjusted EBITDA was $91.2 million, or 21.4% of sales. The company's actual EPS came out at $1.52, beating estimates of $1.43. The company maintained its cash dividend of $0.20 per share, marking 63 consecutive quarters of consistently returning capital to shareholders.

AZZ

USD 122.18

4.39%

A-Score: 6.1/10

Publication date: January 8, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • Record Q3 Sales Growth: AZZ Inc. achieved $426M in sales, a 5.5% YoY increase, with Metal Coatings segment up 15.7% driven by infrastructure demand and 30.3% EBITDA margins.
  • Precoat Segment Recovery: Sales declined 1.8% YoY, but sequential improvement noted, with reduced prepainted metal imports down 35% in 2026 creating market opportunities.
  • Strong Cash Flow and Shareholder Returns: Generated $79.7M in operating cash flow, repurchased $20M in stock, and maintained a 63-quarter consecutive dividend of $0.20/share.
  • Narrowed Fiscal 2026 Guidance: Projects $1.625B–$1.7B sales, $360M–$380M adjusted EBITDA (21.4% margin), and $5.90–$6.20 diluted EPS.
  • M&A and Margin Strategy: CEO highlighted disciplined pricing in Metal Coatings, margin-optimized growth, and a strong M&A pipeline targeting bolt-on acquisitions.

Segment Performance

The Metal Coatings segment saw EBITDA margins at 30.3%, despite a slight decrease in gross margins due to the company chasing larger projects with marginally lower margins. According to Thomas Ferguson, CEO of AZZ Inc., the team has demonstrated discipline in pricing projects. The Precoat Metals segment saw sales decline 1.8% year-over-year, but Ferguson implied that the segment has bottomed, with a positive outlook due to reduced prepainted metal imports.

Outlook and Guidance

AZZ narrowed its forecast ranges for total sales, EBITDA, and adjusted EPS, anticipating sales of $1.625 billion to $1.7 billion, adjusted EBITDA of $360 million to $380 million, and adjusted diluted earnings per share of $5.90 to $6.20. Analysts estimate next year's revenue growth at 5.5%. The company will release fiscal 2027 guidance in the next few weeks.

Valuation and Return Metrics

The company's current P/E Ratio is 10.91, and EV/EBITDA is 6.45, indicating a relatively reasonable valuation. The company's ROE is 26.34%, and ROIC is 9.45%, suggesting efficient use of capital. The dividend yield is 0.63%, and the free cash flow yield is 12.18%, indicating a decent return for shareholders.

Strategic Focus

Ferguson expressed enthusiasm about the company's position and leadership team's focus, citing a strong M&A pipeline with a preference for bolt-on acquisitions. The company has been actively reducing debt and repurchasing shares, with plans to review its dividend policy annually.

AZZ's A-Score