Apogee Enterprises, Inc. (APOG) | Investment Case

1. Company Snapshot

1.a. Company Description

Apogee Enterprises, Inc.designs and develops glass and metal products and services in the United States, Canada, and Brazil.The company operates in four segments: Architectural Framing Systems, Architectural Glass, Architectural Services, and Large-Scale Optical Technologies (LSO).

The Architectural Framing Systems segment designs, engineers, fabricates, and finishes the aluminum frames used in customized aluminum and glass window; curtain wall; storefront; and entrance systems, such as the outside skin and entrances of commercial, institutional, and multi-family residential buildings.The Architectural Glass segment fabricates coated and high-performance glass used in customized window and wall systems, including the outside skin of commercial, institutional, and multi-family residential buildings.The Architectural Services segment offers full-service installation of the walls of glass, windows, and other curtain wall products making up the outside skin of commercial and institutional buildings.

The LSO segment manufactures value-added glass and acrylic products for framing and display applications.The company's products and services are primarily used in commercial buildings, such as office buildings, hotels, and retail centers; and institutional buildings comprising education facilities, health care facilities, and government buildings, as well as multi-family residential buildings.It markets its architectural products and services through direct sales force, independent sales representatives, and distributors to glazing subcontractors and general contractors; and value-added glass and acrylics through retail chains, picture-framing shops, and independent distributors to museums, galleries, and other customers.

The company was incorporated in 1949 and is based in Minneapolis, Minnesota.

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1.b. Last Insights on APOG

Apogee Enterprises' recent performance was negatively impacted by high costs and supply challenges. Despite solid segment gains and pricing actions, the company's Q2 earnings revealed margin pressure, prompting a downward revision of its FY26 outlook. The upcoming CEO transition, with Donald A. Nolan succeeding Ty R. Silberhorn, may add to near-term uncertainty. Additionally, revenue growth driven by acquisitions was offset by weakening organic sales and profitability due to higher costs and tariffs. Adjusted net profits are forecasted to decline.

1.c. Company Highlights

Last Price	39.75
Change Percentage	-3.19%
Open	41.13
Previous Close	41.06
Market Cap ( Millions)	855
Volume	33480.65
Year High	49.99
Year Low	30.75
M A 50	38.55
M A 200	39.91

FCF Yield	7.89%
Dividend Yield	2.64%
ROE	8.07%
Debt / Equity	60.80%
Net Debt / EBIDTA	175.33%
Price To Book	1.66
Price Earnings Ratio	21.22
Price To FCF	12.68
Price To sales	0.61
EV / EBITDA	7.3

2. Apogee Enterprises' Mixed Q3 Earnings: Revenue Growth, Margin Pressures

Apogee Enterprises reported net sales of $348.6 million for its third quarter, a 2.1% year-over-year increase driven by the acquisition of UW Solutions and a favorable product mix. However, adjusted EBITDA margin decreased slightly to 13.2% due to lower volume, price, and higher aluminum and health insurance costs. The company's EPS came in at $0.767, missing estimates of $1.03. The adjusted diluted EPS is expected to be in the range of $3.40 to $3.50 for fiscal 2026, with an estimated EPS impact from tariffs of approximately $0.30.

Publication Date: Jan -08

                                    📋 Highlights
                                    Q3 Net Sales Growth:
                                                Increased to $348.6M (+2.1% YoY), driven by UW Solutions acquisition and favorable product mix.
Segment Performance:
                                                Services segment grew for 7th consecutive quarter (9.7% EBITDA margin); Metals improved margin to 13.5% via cost savings.
2026 Outlook:
                                                $1.39B net sales target and $3.40–$3.50 adjusted diluted EPS, with $0.30 EPS impact from tariffs.
Project Fortify Expansion:
                                                $28–29M pretax charges anticipated, offset by $25–26M annual cost savings post-implementation.
High-Margin Growth:
                                                UWS Solutions acquisition boosted Performance Surfaces sales and unlocked high-margin warehouse/manufacturing markets.

                                

Segment Performance

The company's segments performed variably: Metals net sales declined due to lower volume, but adjusted EBITDA margin improved to 13.5% through cost savings and productivity gains. The Services segment delivered its seventh consecutive quarter of year-over-year net sales growth, driven by increased volume, with an adjusted EBITDA margin of 9.7%. Glass net sales increased slightly, while adjusted EBITDA margin moderated due to lower price and higher material costs. Performance surfaces net sales grew due to the UW Solutions acquisition, but adjusted EBITDA margin decreased.

Outlook and Strategy

Apogee Enterprises updated its outlook for fiscal 2026, expecting net sales of approximately $1.39 billion. The company is focused on becoming the economic leader in target markets, managing its portfolio, and pursuing accretive M&A opportunities. Don Nolan emphasized that there is no change in strategy, with a focus on operational excellence, cost savings, and driving profitable growth. As Don Nolan noted, the company has worked hard to maximize EBITDA dollar contribution while protecting premium margins, putting it in a stronger position than during the last downturn.

Valuation and Growth Prospects

With a P/E Ratio of 17.14 and EV/EBITDA of 6.69, the market appears to be pricing in moderate growth expectations. Analysts estimate next year's revenue growth at 0.9%. The company's robust pipeline for accretive M&A and its focus on moving faster with discipline could potentially drive growth. The addition of UWS Solutions has opened up new markets and products, enabling faster growth. The company's current compensation structure is expected to normalize in the future, potentially positively impacting future earnings.

Financial Health

The company's financial health appears stable, with a Net Debt / EBITDA ratio of 1.88 and a ROIC of 5.03%. The Dividend Yield is 3.24%, indicating a relatively attractive return for income investors. The company's focus on operational excellence and cost savings is expected to drive profitable growth, with Project Fortify expansion and other "quicker turn wins" being key priorities in the near term.

3. NewsRoom

Apogee Enterprises, Inc. (NASDAQ:APOG) Sees Significant Increase in Short Interest

Feb -16

Source: defenseworld.net

1 Stock to Watch & 1 to Avoid in a Challenging Glass Products Industry

Feb -13

Source: zacks.com

INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Apogee Enterprises, Inc. - APOG

Feb -12

Source: prnewswire.com

INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Apogee Enterprises, Inc. - APOG

Feb -03

Source: globenewswire.com

INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Apogee Enterprises, Inc. - APOG

Jan -29

Source: prnewswire.com

INVESTOR ALERT: Pomerantz Law Firm Investigates Claims on Behalf of Investors of Apogee Enterprises, Inc. - APOG

Jan -27

Source: globenewswire.com

INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Apogee Enterprises, Inc. - APOG

Jan -22

Source: prnewswire.com

Apogee Enterprises Names Mark Augdahl Chief Financial Officer

Jan -21

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.02%)

6. Segments

Architectural Framing Systems

Expected Growth: 4.83%

Apogee Enterprises' Architectural Framing Systems segment growth of 4.83% is driven by increasing demand for energy-efficient and sustainable building solutions, rising construction activities in the commercial and residential sectors, and strategic acquisitions expanding product offerings and geographic presence.

Architectural Glass

Expected Growth: 4.65%

Apogee Enterprises' Architectural Glass segment growth of 4.65% is driven by increasing demand for energy-efficient buildings, government incentives for green infrastructure, and rising construction spending in the commercial and residential sectors. Additionally, the company's focus on innovative products and strategic acquisitions have contributed to its growth momentum.

Architectural Services

Expected Growth: 4.83%

Apogee Enterprises, Inc.'s Architectural Services segment growth of 4.83% is driven by increasing demand for energy-efficient and sustainable building solutions, government incentives for green infrastructure, and a strong backlog of projects in the education and healthcare sectors.

Large-Scale Optical

Expected Growth: 8.33%

Apogee Enterprises' Large-Scale Optical segment growth of 8.33% is driven by increasing demand for energy-efficient architectural glass, rising adoption of smart glass technologies, and growing investments in renewable energy projects. Additionally, the segment benefits from Apogee's strong relationships with top architectural firms and its ability to provide customized solutions.

Intersegment Elimination

Expected Growth: 4.83%

Apogee Enterprises, Inc.'s 4.83% intersegment elimination growth is driven by increasing architectural glass sales, robust project backlog, and strategic acquisitions. Additionally, cost savings initiatives and operational efficiencies have contributed to the growth. The company's focus on innovation, sustainability, and customer relationships has also enhanced its competitive position, leading to improved financial performance.

7. Detailed Products

Architectural Glass

Apogee Enterprises, Inc. provides architectural glass products, including coated, tinted, and low-e glass for commercial and residential buildings.

Architectural Framing Systems

The company offers architectural framing systems, including aluminum frames, entrance systems, and curtain wall systems.

Window Systems

Apogee Enterprises, Inc. provides window systems, including vinyl, aluminum, and wood windows for new construction and replacement markets.

Installation Services

The company offers installation services for its products, including glazing, window installation, and curtain wall installation.

Glass and Metal Solutions

Apogee Enterprises, Inc. provides glass and metal solutions, including glass fabrication, metal fabrication, and glass lamination.

8. Apogee Enterprises, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Apogee Enterprises, Inc. operates in a niche market with limited substitutes, but there are some alternatives available, making the threat of substitutes medium.

Bargaining Power Of Customers

Apogee Enterprises, Inc. has a diverse customer base, which reduces the bargaining power of individual customers, making the bargaining power of customers low.

Bargaining Power Of Suppliers

Apogee Enterprises, Inc. relies on a few key suppliers, which gives them some bargaining power, making the bargaining power of suppliers medium.

Threat Of New Entrants

Apogee Enterprises, Inc. operates in a capital-intensive industry with high barriers to entry, making it difficult for new entrants to join the market, making the threat of new entrants low.

Intensity Of Rivalry

Apogee Enterprises, Inc. operates in a highly competitive industry with many established players, making the intensity of rivalry high.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	13.62%
Debt Cost	8.15%
Equity Weight	86.38%
Equity Cost	9.26%
WACC	9.11%
Leverage	15.77%

11. Quality Control: Apogee Enterprises, Inc. passed 8 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Ennis

A-Score: 6.4/10

Value: 7.1

Growth: 3.9

Quality: 7.2

Yield: 9.0

Momentum: 2.0

Volatility: 9.0

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A-Score: 4.8/10

Value: 5.0

Growth: 6.8

Quality: 6.2

Yield: 0.0

Momentum: 9.5

Volatility: 1.7

1-Year Total Return ->

Apogee Enterprises

A-Score: 4.7/10

Value: 6.2

Growth: 6.0

Quality: 4.6

Yield: 5.0

Momentum: 0.5

Volatility: 6.0

1-Year Total Return ->

Gibraltar Industries

A-Score: 3.8/10

Value: 4.9

Growth: 6.7

Quality: 5.0

Yield: 0.0

Momentum: 1.5

Volatility: 5.0

1-Year Total Return ->

Quanex Building Products

A-Score: 3.4/10

Value: 8.2

Growth: 3.2

Quality: 2.6

Yield: 3.0

Momentum: 0.0

Volatility: 3.7

1-Year Total Return ->

BlueLinx

A-Score: 3.2/10

Value: 5.3

Growth: 5.8

Quality: 3.2

Yield: 0.0

Momentum: 1.0

Volatility: 4.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-0.06%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.11%

Apogee Enterprises, Inc. - US0375981091

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on APOG

1.c. Company Highlights

Higher Growth

Strong Momentum

Better Quality

Earnings Beats

Revenues Beats

Average Yield

Stable Momentum

Fairly Valued

Average Growth

Weak Momentum

Earnings Miss

Higher Yield

Revenues Miss

Average Quality

2. Apogee Enterprises' Mixed Q3 Earnings: Revenue Growth, Margin Pressures

Segment Performance

Outlook and Strategy

Valuation and Growth Prospects

Financial Health

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.02%)

6. Segments

Architectural Framing Systems

Expected Growth: 4.83%

Architectural Glass

Expected Growth: 4.65%

Architectural Services

Expected Growth: 4.83%

Large-Scale Optical

Expected Growth: 8.33%

Intersegment Elimination

Expected Growth: 4.83%

7. Detailed Products

Architectural Glass

Architectural Framing Systems

Window Systems

Installation Services

Glass and Metal Solutions

8. Apogee Enterprises, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Apogee Enterprises, Inc. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

39.73$

Current Price

39.73$

Potential

12.e Scoring ^Insights

12.f DCF ^BETA