MasterBrand, Inc. (MBC) | Investment Case

1. Company Snapshot

1.a. Company Description

MasterBrand, Inc.manufactures and sells residential cabinets for the kitchen, bathroom, and other parts of the home in North America.The company is based in Jasper, Indiana.

Show Full description

1.b. Last Insights on MBC

MasterBrand, Inc.'s recent performance was impacted by a persistently soft demand environment, as mentioned in its Q3 2025 earnings call. Despite disciplined execution in strategic initiatives, the company's top-line results were consistent with expectations, but not impressive. The merger with American Woodmark received shareholder approval, but may not be a short-term growth driver. Additionally, the company's CFO, Andrea Simon, is leaving to join Graco Inc.'s board of directors, potentially creating leadership uncertainty.

1.c. Company Highlights

Last Price	11.15
Change Percentage	-0.62%
Open	11.18
Previous Close	11.22
Market Cap ( Millions)	1417
Volume	1224669
Year High	18.15
Year Low	9.33
M A 50	11.97
M A 200	12.03

FCF Yield	9.44%
Dividend Yield	0.00%
ROE	6.19%
Debt / Equity	77.79%
Net Debt / EBIDTA	343.36%
Price To Book	1.02
Price Earnings Ratio	17.08
Price To FCF	10.59
Price To sales	0.51
EV / EBITDA	8.49

2. MasterBrand's Q3 2025 Earnings: A Resilient Performance Amidst Challenging Demand

MasterBrand reported a revenue decline of 2.7% to $698.9 million in Q3 2025, with adjusted EBITDA margin contracting 160 basis points to 13%. The company's EPS came in at $0.33, significantly beating analyst estimates of $0.14. The strong EPS performance was driven by cost-saving initiatives and pricing actions that partially offset the negative impact of tariffs and volume declines.

Publication Date: Nov -23

                                    📋 Highlights
                                    Net Sales Decline::
                                                Q3 net sales fell 3% to $699 million YoY, driven by mid- to high single-digit end market contraction, partially offset by pricing actions and share gains.
Adjusted EBITDA Drop::
                                                Adjusted EBITDA declined 13.3% to $91 million YoY, impacting margins by 160 bps to 13%, due to volume declines, tariffs, and leverage challenges.
Tariff Exposure::
                                                New Section 232 tariffs (25–50% in 2026) added $20–25 million Q4 unmitigated exposure, with 7–8% of 2025 sales at risk, driven by material costs (45–55% of COGS).
Merger with American Woodmark::
                                                Secured $375M delayed draw Term A facility for the pending merger, which is expected to create synergies and a stronger combined entity.
Full-Year Guidance::
                                                2025 adjusted EBITDA guidance revised to $315–335 million (11.5–12% margin), with net sales projected flat YoY despite demand headwinds.

                                

Operational Performance

The company's operational performance was marked by disciplined execution in a challenging demand environment. Net sales declined 3% year-over-year, driven by mid- to high single-digit end market contraction, partially offset by pricing actions and share gains in distributor and builder channels. The company's Canadian performance was down mid-single digits, consistent with the market and in line with expectations.

Tariff Impact and Mitigation Strategy

MasterBrand is proactively managing the impact of tariffs, with a comprehensive strategy to offset the effects through targeted price increases, supplier renegotiations, alternative sourcing, and manufacturing footprint optimization. The company estimates that unmitigated gross tariff exposure equates to 7-8% of 2025 net sales, with the degree of impact varying significantly by product category. As Dave Banyard, President and CEO, noted, "We're diligently evaluating the implications of the Section 232 lumber tariffs and executing a coordinated mitigation strategy to minimize exposure."

Outlook and Valuation

MasterBrand expects demand to remain subdued through next year, with gradual improvement anticipated in late fiscal 2026 or early fiscal '27. The company's updated full-year 2025 financial outlook includes net sales expected to be approximately flat overall, with adjusted EBITDA margin guidance revised to 11.5-12%. With a P/E Ratio of 15.55 and an EV/EBITDA multiple of 8.04, the stock appears reasonably valued. Analysts estimate next year's revenue growth at -0.1%, indicating a challenging near-term outlook. However, the company's resilience and proactive management of tariffs position it for potential long-term success.

3. NewsRoom

Is a Turnaround Ahead for MasterBrand Stock as One Investor Doubles Down on Its Big Bet?

Dec -02

Source: fool.com

Is MasterBrand Stock a Buy as One Fund Invests $52.6 Million?

Nov -29

Source: fool.com

MasterBrand, Inc. (MBC) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

MasterBrand Reports Third Quarter 2025 Financial Results

Nov -04

Source: businesswire.com

Graco Inc. Appoints Andrea (Andi) H. Simon to the Board of Directors

Oct -30

Source: businesswire.com

Merger Between MasterBrand and American Woodmark Receives Shareholder Approval

Oct -30

Source: businesswire.com

MasterBrand, Inc. Gives Back as Exclusive Cabinet Provider for Habitat for Humanity's Carter Work Project

Oct -21

Source: prnewswire.com

A New Era of Refined Style: StarMark Cabinetry Debuts Largest Collection Yet

Oct -09

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.00%)

6. Segments

Residential Cabinetry Products

Expected Growth: 4.0%

MasterBrand's residential cabinetry products growth is driven by increasing demand for home renovations, rising popularity of smart homes, and growing preference for customized cabinetry solutions. Additionally, the company's strong brand portfolio, strategic partnerships, and expanding distribution network contribute to its 4.0% growth.

7. Detailed Products

Cabinets

MasterBrand offers a wide range of cabinets for kitchens, bathrooms, and other areas of the home, providing ample storage and stylish design.

Countertops

MasterBrand provides a variety of countertop materials, including granite, quartz, and solid surface, offering durability and aesthetic appeal.

Decorative Hardware

MasterBrand's decorative hardware collection includes knobs, handles, and other accessories in various styles and finishes, enhancing the look of cabinets and furniture.

Bathroom Vanities

MasterBrand's bathroom vanities offer a range of styles, materials, and configurations to suit different tastes and bathroom layouts.

Kitchen Islands

MasterBrand's kitchen islands provide additional counter space, storage, and seating, enhancing the functionality and style of kitchens.

8. MasterBrand, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

MasterBrand, Inc. faces moderate threat from substitutes, as customers have limited alternatives for its high-end cabinetry products.

Bargaining Power Of Customers

MasterBrand, Inc. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

MasterBrand, Inc. relies on a few key suppliers for raw materials, giving them some bargaining power, but the company's large scale of operations helps mitigate this risk.

Threat Of New Entrants

The high capital requirements and complex manufacturing process for cabinetry products create barriers to entry, making it difficult for new entrants to compete with MasterBrand, Inc.

Intensity Of Rivalry

The cabinetry industry is highly competitive, with several established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	37.75%
Debt Cost	9.43%
Equity Weight	62.25%
Equity Cost	9.43%
WACC	9.43%
Leverage	60.64%

11. Quality Control: MasterBrand, Inc. passed 7 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

Flexsteel

A-Score: 5.8/10

Value: 8.4

Growth: 7.1

Quality: 6.0

Yield: 4.0

Momentum: 6.5

Volatility: 2.7

1-Year Total Return ->

Bassett Furniture

A-Score: 5.4/10

Value: 5.9

Growth: 1.3

Quality: 4.4

Yield: 9.0

Momentum: 7.0

Volatility: 5.0

1-Year Total Return ->

Hooker Furnishings

A-Score: 4.9/10

Value: 9.8

Growth: 1.0

Quality: 5.0

Yield: 9.0

Momentum: 1.5

Volatility: 3.3

1-Year Total Return ->

Virco Mfg

A-Score: 4.2/10

Value: 6.7

Growth: 8.3

Quality: 5.5

Yield: 1.0

Momentum: 0.0

Volatility: 3.7

1-Year Total Return ->

American Woodmark

A-Score: 4.0/10

Value: 7.0

Growth: 6.0

Quality: 4.9

Yield: 0.0

Momentum: 1.5

Volatility: 4.7

1-Year Total Return ->

MasterBrand

A-Score: 3.6/10

Value: 6.8

Growth: 4.7

Quality: 4.4

Yield: 0.0

Momentum: 1.5

Volatility: 4.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-1.62%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.43%

MasterBrand, Inc. - US57638P1049

1. Company Snapshot

1.a. Company Description

MasterBrand, Inc.manufactures and sells residential cabinets for the kitchen, bathroom, and other parts of the home in North America.The company is based in Jasper, Indiana.

1.b. Last Insights on MBC

1.c. Company Highlights

Strong Momentum

Average Quality

Average Yield

Earnings Beats

Stable Momentum

Revenues Miss

Fairly Valued

Medium Volatility

Earnings Miss

Revenues Beats

2. MasterBrand's Q3 2025 Earnings: A Resilient Performance Amidst Challenging Demand

Operational Performance

Tariff Impact and Mitigation Strategy

Outlook and Valuation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.00%)

6. Segments

Residential Cabinetry Products

Expected Growth: 4.0%

7. Detailed Products

Cabinets

Countertops

Decorative Hardware

Bathroom Vanities

Kitchen Islands

8. MasterBrand, 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: MasterBrand, 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

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

11.15$

Current Price

11.15$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA