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1. Company Snapshot

1.a. Company Description

Quanex Building Products Corporation, together with its subsidiaries, provides components for the fenestration industry in the United States, Europe, Canada, Asia, and internationally.The company operates through three segments: North American Fenestration, European Fenestration, and North American Cabinet Components.It offers flexible insulating glass spacers, extruded vinyl profiles, window and door screens, and precision-formed metal and wood products, as well as cabinet doors and other components for original equipment manufacturers (OEMs) in the kitchen and bathroom cabinet industry.


The company also provides various non-fenestration components and products, including solar panel sealants, trim moldings, vinyl decking, fencing, water retention barriers, and conservatory roof components.It sells its products to OEMs in the building products industry through sales representatives, direct sales force, distributors, and independent sales agents.The company was founded in 1927 and is based in Houston, Texas.

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1.b. Last Insights on NX

Quanex Building Products Corporation's recent performance was negatively driven by lower volumes, which weighed on its performance. The company's muted start to fiscal 2025 was attributed to decreased demand, as evident from its Q1 2025 earnings release. Additionally, the realization of cost synergies from the Tyman acquisition, while progressing well, may not be enough to offset the impact of lower volumes. Furthermore, the company's focus on margin expansion and debt repayment may not be sufficient to drive growth in the near term.

1.c. Company Highlights

2. Resilience in the Face of Macroeconomic Challenges

The company's financial performance in 2025 demonstrated resilience despite a challenging macroeconomic environment. Net sales reached $1.84 billion, representing a 43.8% increase compared to $1.28 billion in 2024. Adjusted net income was $106.4 million or $2.30 per diluted share, compared to $97.5 million or $2.66 per diluted share in fiscal 2024. In Q4 2025, the company reported EPS of $0.83, beating estimates of $0.5. Adjusted EBITDA was impacted by lower volumes in the Extruded Solutions segment and costs associated with addressing operational issues at a facility in Monterrey, Mexico.

Publication Date: Dec -20

📋 Highlights
  • Sales Growth:: Net sales surged 43.8% to $1.84 billion in 2025, driven by strategic resegmentation and volume growth in Hardware Solutions.
  • Adjusted EBITDA Impact:: Pressured by Extruded Solutions volume declines and Mexico operational costs, yet progress toward normalizing operations by 2026.
  • Debt Reduction & Buybacks:: Generated consistent free cash flow to reduce debt and repurchase $3 million in shares during Q4 2025.
  • 2026 Guidance:: Anticipates flat revenue and EBITDA for 2026, with Q1 revenue declining 16-18% and EBITDA margins down 800-825 bps due to higher SG&A costs.
  • Synergy Realization:: Achieved over $30 million in synergies, with $5-10 million additional expected in 2026, offsetting inflationary and SG&A pressures.

Segment Performance

Volumes in the Hardware Solutions segment were up approximately 1%, while volumes in the Custom Solutions segment were essentially flat. However, volumes were pressured in the Extruded Solutions segment, mainly driven by weaker demand across European and international markets. The company is taking steps to address these challenges and is seeing operational improvements from the resegmentation, particularly in the Extruded Solutions Group.

Balance Sheet and Cash Flow

The company's balance sheet and cash flows have shown significant progress. The company is generating consistent free cash flow, which has enabled it to reduce debt and repurchase shares in the open market. Debt paydown was a focus in the second half of 2025, driven by investor focus on net leverage. The company paid down debt aggressively in the fiscal year and repurchased $3 million of stock in the fourth quarter.

Outlook and Valuation

The company's current view for fiscal 2026 is that revenue and adjusted EBITDA could be flat compared to fiscal 2025. The first half of 2026 is expected to be more challenged than the first half of 2025, with revenue expected to be down 16% to 18% in the first quarter. Analysts estimate revenue growth of 1.2% next year. The stock trades at a P/E Ratio of -3.19, P/B Ratio of 0.97, and EV/EBITDA of -13.48, indicating that the market is pricing in significant challenges. The company's focus on debt repayment, operational improvements, and strategic capital allocation may help drive future growth.

Operational Challenges and Opportunities

The company faced operational challenges, including issues at a facility in Monterrey, Mexico, which have been addressed. The company is also navigating inflationary cost pressures, housing inventory shortages, and a wait-and-see approach ahead of anticipated Federal Reserve rate cuts. However, the company is seeing mid- and longer-term opportunities for growth and innovation, particularly in the Extruded Solutions Group. As George Wilson stated, "We're starting to see mid- and longer-term opportunities for growth and innovation."

3. NewsRoom

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Quanex Building Products (NYSE:NX) Reaches New 12-Month High – Here’s What Happened

Feb -22

Source: defenseworld.net

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Quanex Building Products Announces First Quarter 2026 Earnings Release and Conference Call Schedule

Feb -19

Source: globenewswire.com

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66,230 Shares in Quanex Building Products Corporation $NX Acquired by SG Americas Securities LLC

Jan -20

Source: defenseworld.net

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Reviewing Quanex Building Products (NYSE:NX) & Latham Group (NASDAQ:SWIM)

Dec -31

Source: defenseworld.net

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Teleios Capital Partners Gmbh Sells 80,515 Shares of Quanex Building Products (NYSE:NX) Stock

Dec -20

Source: defenseworld.net

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Teleios Capital Partners Gmbh Sells 119,485 Shares of Quanex Building Products (NYSE:NX) Stock

Dec -20

Source: defenseworld.net

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Quanex Building Products (NYSE:NX) Shares Down 6.2% Following Analyst Downgrade

Dec -16

Source: defenseworld.net

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Quanex Building Products' Surge Is Deeply Justified

Dec -12

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.09%)

6. Segments

North American Fenestration

Expected Growth: 1.2%

The 1.2% growth in North American Fenestration from Quanex Building Products Corporation is driven by increasing demand for energy-efficient windows, rising residential construction, and remodeling activities. Additionally, growing adoption of smart windows and doors, and favorable government policies supporting green building initiatives also contribute to the segment's growth.

European Fenestration

Expected Growth: 0.8%

The 0.8 growth of European Fenestration from Quanex Building Products Corporation is driven by increasing demand for energy-efficient windows, government incentives for green buildings, and a rebound in European construction activity. Additionally, Quanex's strategic acquisitions and product innovations have expanded its market share, contributing to the segment's growth.

North American Cabinet Components

Expected Growth: 1.1%

Quanex Building Products Corporation's North American Cabinet Components segment growth of 1.1% is driven by increasing demand for new housing and remodeling projects, fueled by low interest rates and rising consumer confidence. Additionally, the company's focus on operational efficiency and cost savings initiatives has contributed to the segment's growth.

Unallocated Corporate & Other

Expected Growth: 0.5%

Quanex Building Products Corporation's Unallocated Corporate & Other segment growth of 0.5% is driven by modest increases in corporate expenses, partially offset by reductions in other miscellaneous items. This growth is also influenced by the company's efforts to optimize its cost structure and improve operational efficiency.

7. Detailed Products

Windows

Quanex Building Products Corporation offers a wide range of window products, including vinyl windows, aluminum windows, and wood windows, designed for new construction, replacement, and remodeling projects.

Doors

Quanex provides a variety of door products, including entry doors, patio doors, and interior doors, made from materials like steel, fiberglass, and wood.

Kitchen and Bath Cabinets

Quanex offers a range of kitchen and bath cabinets, including stock, semi-custom, and custom cabinets, designed for functionality, style, and durability.

Roofing Components

Quanex provides roofing components, including roofing membranes, roofing underlayments, and roofing accessories, designed for residential and commercial applications.

Insulation and Composites

Quanex offers insulation and composite products, including fiberglass insulation, foam insulation, and composite materials, designed for energy efficiency and durability.

Molded Products

Quanex provides molded products, including vinyl profiles, vinyl extrusions, and PVC profiles, designed for various building applications.

8. Quanex Building Products Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Quanex Building Products Corporation is moderate due to the availability of alternative materials and products in the building industry.

Bargaining Power Of Customers

The bargaining power of customers for Quanex Building Products Corporation is low due to the company's strong brand reputation and diversified customer base.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Quanex Building Products Corporation is moderate due to the presence of multiple suppliers in the market, but the company's large scale of operations gives it some negotiating power.

Threat Of New Entrants

The threat of new entrants for Quanex Building Products Corporation is low due to the high barriers to entry in the building industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Quanex Building Products Corporation is high due to the presence of several established competitors in the building industry, leading to intense competition 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 17.58%
Debt Cost 8.22%
Equity Weight 82.42%
Equity Cost 10.84%
WACC 10.38%
Leverage 21.33%

11. Quality Control: Quanex Building Products Corporation passed 9 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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Perma-Pipe International Holdings

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Value: 5.0

Growth: 6.8

Quality: 6.2

Yield: 0.0

Momentum: 9.5

Volatility: 1.7

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Apogee Enterprises

A-Score: 4.7/10

Value: 6.2

Growth: 6.0

Quality: 4.6

Yield: 5.0

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Volatility: 6.0

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Latham

A-Score: 3.8/10

Value: 5.8

Growth: 4.7

Quality: 4.8

Yield: 0.0

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Volatility: 2.3

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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

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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 ->

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BlueLinx

A-Score: 3.2/10

Value: 5.3

Growth: 5.8

Quality: 3.2

Yield: 0.0

Momentum: 1.0

Volatility: 4.0

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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

22.25$

Current Price

22.25$

Potential

-0.00%

Expected Cash-Flows