Wrapping up Q3 earnings, we look at the numbers and key takeaways for the building materials stocks, including UFP Industries (NASDAQ:UFPI) and its peers.

Traditionally, building materials companies have built competitive advantages with economies of scale, brand recognition, and strong relationships with builders and contractors. More recently, advances to address labor availability and job site productivity have spurred innovation. Additionally, companies in the space that can produce more energy-efficient materials have opportunities to take share. However, these companies are at the whim of construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of building materials companies.

The 9 building materials stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 2.8% above.

Luckily, building materials stocks have performed well with share prices up 12.1% on average since the latest earnings results.

Weakest Q3: UFP Industries (NASDAQ:UFPI)

Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ:UFPI) is a holding company making building materials for the construction, retail, and industrial sectors.

UFP Industries reported revenues of $1.65 billion, down 9.8% year on year. This print fell short of analysts’ expectations by 6.5%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ adjusted operating income estimates.

"Our third quarter results were impacted by softer demand and broad-based pricing pressure which reduced our revenue and profit margins.” said Chairman and CEO Matthew J. Missad.

UFP Industries delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 2.8% since reporting and currently trades at $135.26.

Read our full report on UFP Industries here, it’s free.

Best Q3: AZEK (NYSE:AZEK)

With a significant portion of its products made from recycled materials, AZEK (NYSE:AZEK) designs and manufactures goods for outdoor living spaces.

AZEK reported revenues of $348.2 million, down 10.4% year on year, outperforming analysts’ expectations by 2.4%. The business had a very strong quarter with an impressive beat of analysts’ adjusted operating income estimates.

AZEK scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 11.5% since reporting. It currently trades at $51.80.

Is now the time to buy AZEK? Access our full analysis of the earnings results here, it’s free.

Sherwin-Williams (NYSE:SHW)

Widely known for its success in the paint industry, Sherwin-Williams (NYSE:SHW) is a manufacturer of paints, coatings, and related products.

Sherwin-Williams reported revenues of $6.16 billion, flat year on year, falling short of analysts’ expectations by 0.6%. It was a softer quarter as it posted a significant miss of analysts’ adjusted operating income estimates.

Interestingly, the stock is up 3.2% since the results and currently trades at $393.96.

Read our full analysis of Sherwin-Williams’s results here.

Armstrong World (NYSE:AWI)

Started as a two-man shop dating back to the 1860s, Armstrong (NYSE:AWI) provides ceiling and wall products to commercial and residential spaces.

Armstrong World reported revenues of $386.6 million, up 11.3% year on year. This print was in line with analysts’ expectations. Zooming out, it was a satisfactory quarter as it also logged EPS guidance for next quarter exceeding analysts’ expectations.

Armstrong World had the weakest full-year guidance update among its peers. The stock is up 18% since reporting and currently trades at $162.

Read our full, actionable report on Armstrong World here, it’s free.

Valmont (NYSE:VMI)

Credited with an invention in the 1950s that improved crop yields, Valmont (NYSE:VMI) provides engineered products and infrastructure services for the agricultural industry.

Valmont reported revenues of $1.02 billion, down 2.9% year on year. This result met analysts’ expectations. Aside from that, it was a mixed quarter as it also recorded a decent beat of analysts’ EBITDA estimates.

The stock is up 21.2% since reporting and currently trades at $357.

Read our full, actionable report on Valmont here, it’s free.

Market Update

In response to the Fed's rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed's 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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