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1. Company Snapshot

1.a. Company Description

Armstrong World Industries, Inc., together with its subsidiaries, designs, manufactures, and sells ceiling systems primarily for use in the construction and renovation of residential and commercial buildings in the United States, Canada, and Latin America.The company operates through Mineral Fiber and Architectural Specialties segments.The company produces suspended mineral fiber, soft fiber, fiberglass wool, and metal ceiling systems, as well as wood, wood fiber, glass-reinforced-gypsum, and felt ceiling and wall systems; ceiling component products, such as ceiling perimeters and trims, as well as grid products that support drywall ceiling systems; ceilings and walls for use in commercial settings; and acoustical controls, facades, and partitions.


It sells its commercial ceiling and architectural specialties products to resale distributors and ceiling system contractors; and residential ceiling products to wholesalers and retailers, such as large home centers.The company was incorporated in 1891 and is headquartered in Lancaster, Pennsylvania.

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1.b. Last Insights on AWI

Armstrong World Industries' recent performance was driven by strong Q2 earnings, with revenue jumping 16% and EPS beating estimates at $2.09 per share. The company's robust pricing power, margin expansion, and innovation have driven a durable competitive moat in both core segments. Architectural Specialties delivered standout growth and margin gains, positioning it as a future earnings driver and supporting business diversification. Digital tools like ProjectWorks and sustainable products like TEMPLOK have enhanced AWI's market position and support higher-margin product mix.

1.c. Company Highlights

2. Armstrong World Industries' Q3 2025 Earnings: A Record-Breaking Performance

Armstrong World Industries delivered a record-setting performance in Q3 2025, with net sales growing 10% year-over-year, driven by strong Mineral Fiber average unit value (AUV) and volume growth. The company's adjusted EBITDA margin expanded, and earnings per share (EPS) came in at $2.05, beating estimates of $1.99. The Mineral Fiber segment reported a 6% net sales increase, while the Architectural Specialties segment saw an 18% rise, driven by benefits from acquisitions and solid organic growth. The company's digital initiatives, including Project Works and Canopy, continued to drive volume, AUV, and margin expansion.

Publication Date: Nov -09

📋 Highlights
  • ...<b> ...</li> with the figure included in the description. </think> <li><b>Record Net Sales and Earnings Growth: Achieved 10% year-over-year top-line growth, with net sales and earnings hitting record levels.
  • Mineral Fiber Segment Performance: Delivered 6% net sales growth and a 6% increase in adjusted EBITDA, reaching a third-quarter record with a 44% EBITDA margin.
  • Architectural Specialties Expansion: Net sales rose 18% (organic growth + acquisitions), with adjusted EBITDA up 10% and a 19% margin, nearing its 20% long-term target.
  • Free Cash Flow Surge: Adjusted free cash flow increased by 22%, driven by higher cash earnings and lower tax payments.
  • Full-Year Guidance Raised: Expects double-digit growth in net sales, adjusted EBITDA, and adjusted free cash flow for 2025, despite macroeconomic uncertainties.

Segment Performance

The Mineral Fiber segment delivered a 44% EBITDA margin in the quarter, despite unusual expenses, driven by good price realization, a richer mix of products, and productivity gains in the plants. The Architectural Specialties segment reported an adjusted EBITDA margin of approximately 19%, with an organic growth rate in the high single digits. The company's acquisition of Geometrik, a Canadian wood sealing manufacturer, is expected to bring competitive advantages to the Wood platform in the Architectural Specialty business.

Guidance and Outlook

Armstrong updated its full-year 2025 guidance, raising its expectations across all key metrics, including double-digit growth in net sales, adjusted EBITDA, and adjusted diluted net earnings per share. The company expects 2025 to be another record year, with double-digit top and bottom-line growth, outperforming the market. For 2026, the company is expecting to continue growing due to a strong backlog and order commentary, particularly on larger projects, driven by penetration and taking market share.

Valuation

With a P/E Ratio of 26.69 and an EV/EBITDA of 14.99, Armstrong's valuation multiples suggest that the market is pricing in a certain level of growth. The company's ROE (%) of 37.27 and ROIC (%) of 15.83 indicate a strong ability to generate returns on equity and invested capital. Analysts estimate next year's revenue growth at 6.9%, which may be a reasonable expectation given the company's track record and guidance.

Market Trends and Inflation

The company is seeing stabilization in the Education and Healthcare segments, while the Data Center opportunity remains robust. The Office vertical has shown signs of recovery, with a decline in U.S. office vacancy rates and a need for renovating Class B office space. Armstrong is expecting low single-digit inflation in the Mineral Fiber segment, with raw materials and energy being the main drivers. The company is moderating its expectations for inflation in the back half of the year, with a slight uptick in energy and raw materials costs.

3. NewsRoom

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Bare Financial Services Inc Increases Stock Position in Armstrong World Industries, Inc. $AWI

Dec -01

Source: defenseworld.net

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Advantage Alpha Capital Partners LP Reduces Stock Position in Armstrong World Industries, Inc. $AWI

Nov -28

Source: defenseworld.net

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Touchstone Small Cap Fund Q3 2025 Contributors And Detractors

Nov -26

Source: seekingalpha.com

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AXQ Capital LP Acquires Shares of 1,616 Armstrong World Industries, Inc. $AWI

Nov -25

Source: defenseworld.net

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Touchstone Mid Cap Fund Q3 2025 Portfolio Review

Nov -24

Source: seekingalpha.com

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Creative Planning Buys 349 Shares of Armstrong World Industries, Inc. $AWI

Nov -24

Source: defenseworld.net

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After Plunging 10.6% in 4 Weeks, Here's Why the Trend Might Reverse for Armstrong World Industries (AWI)

Nov -18

Source: zacks.com

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Alberta Investment Management Corp Sells 12,761 Shares of Armstrong World Industries, Inc. $AWI

Nov -17

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.78%)

6. Segments

Mineral Fiber

Expected Growth: 6.5%

Armstrong World Industries' Mineral Fiber segment growth of 6.5% is driven by increasing demand for sustainable and energy-efficient building materials, government incentives for green buildings, and rising construction activities in the commercial and residential sectors, particularly in Asia and the Americas.

Architectural Specialties

Expected Growth: 7.5%

Armstrong World Industries' Architectural Specialties segment growth of 7.5% is driven by increasing demand for sustainable and acoustically-advanced building solutions, expansion in emerging markets, and strategic investments in product innovation and digitalization, enabling the company to capitalize on the growing trend of smart buildings and urbanization.

7. Detailed Products

Mineral Fiber Ceilings

Armstrong World Industries offers a wide range of mineral fiber ceiling tiles and panels for various applications, including commercial, educational, and healthcare facilities.

Suspension Systems

Armstrong's suspension systems provide a versatile and adaptable solution for installing ceiling grids, lighting, and other fixtures.

Metal Ceilings

Armstrong's metal ceiling systems offer a durable, low-maintenance, and design-flexible solution for various applications.

Wood Ceilings

Armstrong's wood ceiling systems provide a natural, warm, and inviting aesthetic for various applications.

Acoustic Solutions

Armstrong's acoustic solutions, including sound-absorbing panels and acoustic ceiling tiles, help reduce noise levels and improve sound quality.

DC FlexGrid

Armstrong's DC FlexGrid is a flexible and adaptable ceiling grid system for use with various ceiling tile types.

8. Armstrong World Industries, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Armstrong World Industries, Inc. is medium due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the presence of large and established customers who can negotiate prices and terms.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the company's large scale of operations and ability to negotiate better prices.

Threat Of New Entrants

The threat of new entrants is medium due to the moderate barriers to entry and the presence of established players in the market.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the market, leading to intense competition.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 50.20%
Debt Cost 9.53%
Equity Weight 49.80%
Equity Cost 9.53%
WACC 9.53%
Leverage 100.81%

11. Quality Control: Armstrong World Industries, Inc. passed 5 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

Stock-Card
Armstrong World Industries

A-Score: 5.9/10

Value: 2.2

Growth: 5.9

Quality: 8.0

Yield: 2.0

Momentum: 8.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Beacon Roofing Supply

A-Score: 5.0/10

Value: 5.6

Growth: 7.3

Quality: 3.3

Yield: 0.0

Momentum: 8.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Simpson Manufacturing Co

A-Score: 4.9/10

Value: 3.1

Growth: 7.9

Quality: 7.5

Yield: 1.0

Momentum: 3.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Installed Building Products

A-Score: 4.8/10

Value: 2.9

Growth: 9.0

Quality: 5.6

Yield: 2.0

Momentum: 5.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Lennox International

A-Score: 4.7/10

Value: 2.5

Growth: 7.7

Quality: 6.7

Yield: 2.0

Momentum: 3.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Builders FirstSource

A-Score: 4.4/10

Value: 5.7

Growth: 8.4

Quality: 6.2

Yield: 0.0

Momentum: 1.5

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

183.87$

Current Price

183.87$

Potential

-0.00%

Expected Cash-Flows