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1. Company Snapshot

1.a. Company Description

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, Inc.was founded in 1874 and is headquartered in St. Louis, Missouri.

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1.b. Last Insights on CNM

Core & Main's recent performance faces pressure due to collapsing residential demand, rising costs, and execution missteps. The company's 2Q25 results showed weak organic growth, deteriorating profitability, and a sharp downgrade in residential lot development outlook. Management's cost-control efforts will take time, leaving margins pressured. JPMorgan raised its price target to $64 but noted muted volume expectations for the back half of 2025. A sell rating was issued due to these challenges. (Source: Core & Main: The Growth Narrative Is Under Huge Pressure (Rating Downgrade))

1.c. Company Highlights

2. Core & Main: 16th Year of Growth, Margins Expand

Core & Main delivered a 16th consecutive year of revenue growth, reporting net sales of $7.65 billion—a 3 % increase year‑over‑year—while adjusted EBITDA climbed to $931 million, yielding a 26.9 % gross margin that up‑drifted 30 bps from fiscal 2024. Adjusted diluted EPS rose to $2.97, outperforming consensus estimates of $2.93, as noted by CEO Mark Witkowski (Q4 earnings call). The company’s valuation sits at a P/E of 22.17 and an EV/EBITDA of 13.03, reflecting modest upside potential in a stable municipal‑driven market.

Publication Date: Apr -09

📋 Highlights
  • 16-Year Sales Growth Streak: Achieved $7.65B net sales and $931M adjusted EBITDA in fiscal 2025, marking 16 consecutive years of sales growth.
  • Organic Market Share Gains: Delivered 3% organic growth in market share despite flat end markets, driven by double-digit growth in fusible HDPE, treatment plant solutions, and geosynthetics.
  • Acquisition-Driven Expansion: 2% growth from acquisitions in 2025, with 6 greenfield openings and a pipeline of 50+ annual M&A targets supporting 2-4% annual sales growth.
  • Gross Margin Expansion: 30 bps margin improvement to 26.9% via private label penetration (5% of sales in 2025, target 10%+), disciplined pricing, and centralized sourcing.
  • Strong Free Cash Flow Yield: Generated $650M operating cash flow, 70% EBITDA conversion, and a 5.8% free cash flow yield—3x higher than peers—with $600M remaining for buybacks.

Organic Growth & Portfolio Expansion

Core & Main’s double‑digit average daily sales growth in fusible HDPE, treatment plant solutions, and geosynthetics underscored the success of its product‑portfolio expansion. The company’s strategy of broadening solution depth has translated into a 3‑point organic market‑share gain, with private‑label sales representing 5 % of total revenue and projected to reach 10 % as the network matures.

Geographic and M&A Levers

Six greenfield locations opened in fiscal 2025, with a pipeline of 50 potential acquisitions evaluated annually. The firm’s M&A activity contributed 2 % to sales growth, while the planned 7–10 new branches next year should further accelerate volume gains, especially in the non‑residential segment that remains muted but poised for rebound.

Margin Discipline & Cost Management

Private‑label penetration and disciplined sourcing drove a 30‑basis‑point gross‑margin expansion, while operating cash‑flow conversion improved to 70 % of adjusted EBITDA. The company’s net‑debt leverage of 2.1x is comfortably within its target range, supporting continued free‑cash‑flow generation and a 5.8 % free‑cash‑flow yield.

Forward Outlook & Capital Allocation

For fiscal 2026, Core & Main targets net sales of $7.8–$7.9 billion and adjusted EBITDA of $950–$980 million, with a 60–70 % EBITDA conversion. The firm remains committed to share repurchases, having executed $155 million in buybacks last year and holding $600 million of authorized capital, positioning it to return value amid steady municipal demand.

Market Dynamics & Risk Factors

While residential demand may lag in the first half of the year, the company expects a rebound as pent‑up activity resurfaces. PVC price headwinds are offset by stronger pricing in other categories, and the firm’s inventory‑management strategy mitigates cost volatility. Overall, Core & Main’s resilient operating model and disciplined pricing policy underpin its outlook.

3. NewsRoom

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Assenagon Asset Management S.A. Increases Holdings in Core & Main, Inc. $CNM

Mar -31

Source: defenseworld.net

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Core & Main Announces Changes to Board of Directors and Executive Chair

Mar -27

Source: businesswire.com

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Core & Main Analysts Slash Their Forecasts After Q4 Results

Mar -25

Source: benzinga.com

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Core & Main's Bright Outlook Doesn't Justify Any Additional Optimism

Mar -24

Source: seekingalpha.com

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Core & Main, Inc. (CNM) Q4 2026 Earnings Call Transcript

Mar -24

Source: seekingalpha.com

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Core & Main Reports Mixed Q4 Results, Offers Cautious FY27 Outlook

Mar -24

Source: gurufocus.com

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Dow Falls Over 350 Points; Core & Main Posts Mixed Q4 Results

Mar -24

Source: benzinga.com

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Core & Main (CNM) Q4 Earnings Top Estimates

Mar -24

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.52%)

6. Segments

Pipes, Valves and Fittings

Expected Growth: 5.5%

Core & Main's 5.5% growth in Pipes, Valves, and Fittings is driven by increasing infrastructure spending, replacement of aging water and gas systems, and rising demand for water conservation and efficiency solutions. Additionally, the company's strong distribution network and strategic acquisitions contribute to its growth momentum.

Storm Drainage

Expected Growth: 5.8%

Storm Drainage from Core & Main, Inc. growth of 5.8% driven by increasing infrastructure spending, urbanization, and climate change mitigation efforts. Rising demand for efficient water management systems, government initiatives for flood control, and growing adoption of sustainable drainage solutions also contribute to this growth.

Fire Protection

Expected Growth: 5.2%

Core & Main's Fire Protection segment growth of 5.2% is driven by increasing demand for fire safety systems in commercial and residential buildings, stringent government regulations, and rising adoption of advanced fire suppression technologies. Additionally, the company's strategic acquisitions and expansion into new markets have contributed to its growth momentum.

Meter

Expected Growth: 5.6%

Meter from Core & Main, Inc. growth of 5.6% driven by increasing demand for water infrastructure upgrades, replacement of aging infrastructure, and adoption of smart metering technologies. Additionally, government initiatives and regulations focusing on water conservation and efficiency also contribute to the growth.

7. Detailed Products

Waterworks

Core & Main, Inc. provides a wide range of waterworks products, including pipes, valves, and fittings, to support the construction and maintenance of water and wastewater infrastructure.

Hydrants

The company offers a variety of hydrants, including dry and wet barrel hydrants, for firefighting and other applications.

Valves

Core & Main, Inc. supplies a broad range of valves, including gate, globe, and check valves, for water and wastewater applications.

Fittings

The company provides a wide selection of fittings, including elbows, tees, and couplings, for piping systems.

Pumps

Core & Main, Inc. offers a variety of pumps, including centrifugal and submersible pumps, for water and wastewater applications.

Meters

The company supplies a range of meters, including water and gas meters, for measuring fluid flow and consumption.

Pipe

Core & Main, Inc. provides a variety of pipes, including PVC, ductile iron, and steel pipes, for water and wastewater applications.

Fire Protection

The company offers a range of fire protection products, including fire hydrants, valves, and fittings, for commercial and industrial applications.

8. Core & Main, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Core & Main, Inc. is medium due to the availability of alternative products and services in the water, sewer, and fire protection markets.

Bargaining Power Of Customers

The bargaining power of customers for Core & Main, Inc. is low due to the company's strong relationships with its customers and its ability to provide customized solutions.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Core & Main, Inc. is medium due to the company's dependence on a few large suppliers and the availability of alternative suppliers.

Threat Of New Entrants

The threat of new entrants for Core & Main, Inc. is low due to the high barriers to entry in the water, sewer, and fire protection markets, including regulatory hurdles and the need for significant capital investment.

Intensity Of Rivalry

The intensity of rivalry for Core & Main, Inc. is high due to the competitive nature of the water, sewer, and fire protection markets, with several large players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 57.12%
Debt Cost 3.95%
Equity Weight 42.88%
Equity Cost 9.68%
WACC 6.41%
Leverage 133.22%

11. Quality Control: Core & Main, Inc. passed 7 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

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MSC Industrial Direct Co

A-Score: 6.0/10

Value: 4.0

Growth: 3.7

Quality: 6.0

Yield: 8.0

Momentum: 6.0

Volatility: 8.3

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Applied Industrial Technologies

A-Score: 5.3/10

Value: 3.1

Growth: 7.1

Quality: 7.2

Yield: 2.0

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Volatility: 8.0

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Watsco

A-Score: 5.2/10

Value: 3.1

Growth: 6.8

Quality: 7.1

Yield: 6.0

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WESCO

A-Score: 5.0/10

Value: 4.5

Growth: 7.8

Quality: 3.9

Yield: 1.0

Momentum: 8.0

Volatility: 5.0

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Pool

A-Score: 4.7/10

Value: 3.6

Growth: 6.8

Quality: 6.1

Yield: 3.0

Momentum: 1.5

Volatility: 7.0

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Core & Main

A-Score: 4.6/10

Value: 3.6

Growth: 8.4

Quality: 5.4

Yield: 0.0

Momentum: 5.0

Volatility: 5.0

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

54.36$

Current Price

54.37$

Potential

-0.00%

Expected Cash-Flows