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Relative valuation derived from Industrials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
25.4%
Sector: 8.9%
Dividend Analysis audit
No Dividend
This company does not currently pay a dividend.
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, AZZ INC (AZZ) receives a "Hold" rating with a composite score of 49.8/100, ranked #1281 out of 4446 stocks. Key factor scores: Quality 50/100, Value 46/100, Momentum 63/100. This is quantitative analysis only — not investment advice.
AZZ INC (AZZ) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does AZZ INC Do?
AZZ Inc. offers galvanizing and metal coating solutions, welding solutions, specialty electrical equipment, and engineered services to the power generation, transmission, distribution, refining, and industrial markets in the United States and internationally. The company operates through two segments, Infrastructure Solutions and Metal Coatings. The Metal Coatings segment offers metal finishing solutions for corrosion protection, including hot-dip galvanizing, spin galvanizing, powder coating, anodizing, and plating to the steel fabrication and other industries. It serves fabricators or manufacturers that provide services to the electrical and telecommunications, bridge and highway, petrochemical, and general industrial markets, as well as original equipment manufacturers. The Infrastructure Solutions segment provides products and services to support industrial and electrical applications. It offers custom switchgear, electrical enclosures, medium and high voltage bus ducts, explosion proof and hazardous duty lighting, and tubular products, as well as solutions and engineering resources to multi-national companies. This segment sells its products through internal sales force, manufacturers' representatives, distributors, and agents. The company was incorporated in 1956 and is headquartered in Fort Worth, Texas. AZZ INC (AZZ) is classified as a mid-cap stock in the Industrials sector, specifically within the Fabricated Products industry. The company is led by CEO Thomas E. Ferguson and employs approximately 3,880 people, headquartered in FORT WORTH, Texas. With a market capitalization of $3.8B, AZZ is one of the notable companies in the Industrials sector.
AZZ INC (AZZ) Stock Rating — Hold (April 2026)
As of April 2026, AZZ INC receives a Hold rating with a composite score of 49.8/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.AZZ ranks #1,281 out of 4,446 stocks in our coverage universe. Within the Industrials sector, AZZ INC ranks #203 of 752 stocks, placing it in the upper half of its Industrials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
AZZ Stock Price and 52-Week Range
AZZ INC (AZZ) currently trades at $137.19. The stock gained $1.20 (0.9%) in the most recent trading session. The 52-week high for AZZ is $141.18, which means the stock is currently trading -2.8% from its annual peak. The 52-week low is $70.90, putting the stock 93.5% above its annual trough. Recent trading volume was 155K shares, suggesting relatively thin trading activity.
Is AZZ Overvalued or Undervalued? — Valuation Analysis
AZZ INC (AZZ) carries a value factor score of 46/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 11.52x, compared to the Industrials sector average of 28.33x — a discount of 59%. The price-to-book ratio stands at 2.92x, versus the sector average of 2.23x. The price-to-sales ratio is 2.31x, compared to 0.50x for the average Industrials stock. On an enterprise value basis, AZZ trades at 14.50x EV/EBITDA, versus 5.70x for the sector.
Overall, AZZ's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
AZZ INC Profitability — ROE, Margins, and Quality Score
AZZ INC (AZZ) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 25.4%, compared to the Industrials sector average of 8.9%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 15.0% versus the sector average of 3.3%.
On a margin basis, AZZ INC reports gross margins of 24.3%, compared to 35.8% for the sector. The operating margin is 15.9% (sector: 6.2%). Net profit margin stands at 20.0%, versus 3.9% for the average Industrials stock. Revenue growth is running at 4.1% on a trailing basis, compared to 6.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
AZZ Debt, Balance Sheet, and Financial Health
AZZ INC has a debt-to-equity ratio of 69.0%, compared to the Industrials sector average of 70.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 1.66x, suggesting adequate working capital coverage. Total debt on the balance sheet is $535M. Cash and equivalents stand at $623,000.
AZZ has a beta of 1.13, meaning it is roughly in line with the broader market in terms of price volatility. The stability factor score for AZZ INC is 72/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
AZZ INC Revenue and Earnings History — Quarterly Trend
In TTM 2026, AZZ INC reported revenue of $1.67B and earnings per share (EPS) of $1.37. Net income for the quarter was $335M. Gross margin was 24.3%. Operating income came in at $266M.
In Q3 2026, AZZ INC reported revenue of $426M and earnings per share (EPS) of $1.37. Net income for the quarter was $41M. Gross margin was 23.9%. Revenue grew 5.5% year-over-year compared to Q3 2025. Operating income came in at $69M.
In Q2 2026, AZZ INC reported revenue of $417M and earnings per share (EPS) of $2.97. Net income for the quarter was $89M. Gross margin was 24.3%. Revenue grew 2.0% year-over-year compared to Q2 2025. Operating income came in at $68M.
In Q1 2026, AZZ INC reported revenue of $422M and earnings per share (EPS) of $5.71. Net income for the quarter was $171M. Gross margin was 24.7%. Revenue grew 2.1% year-over-year compared to Q1 2025. Operating income came in at $70M.
Over the past 8 quarters, AZZ INC has demonstrated a growth trajectory, with revenue expanding from $413M to $1.67B. Investors analyzing AZZ stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
AZZ Dividend Yield and Income Analysis
AZZ INC (AZZ) does not currently pay a dividend. This is common among smaller companies in the Fabricated Products industry that prefer to reinvest cash flows into business expansion rather than returning capital to shareholders. Income-focused investors looking for Industrials dividend stocks may want to explore other Industrials stocks or use the stock screener to filter by dividend yield.
AZZ Momentum and Technical Analysis Profile
AZZ INC (AZZ) has a momentum factor score of 63/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 32/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 18/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
AZZ vs Competitors — Industrials Sector Ranking and Peer Comparison
Comparing AZZ against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full AZZ vs S&P 500 (SPY) comparison to assess how AZZ INC stacks up against the broader market across all factor dimensions.
AZZ Next Earnings Date
No upcoming earnings date has been announced for AZZ INC (AZZ) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy AZZ? — Investment Thesis Summary
AZZ INC presents a balanced picture with arguments on both sides. Price momentum is positive at 63/100, suggesting the trend favors buyers. Low volatility (stability score 72/100) reduces downside risk.
In summary, AZZ INC (AZZ) earns a Hold rating with a composite score of 49.8/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on AZZ stock.
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Institutional Research Dossier
AZZ INC (AZZ) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain our Hold rating on AZZ Inc. (AZZ). While the company demonstrates strong profitability metrics compared to its sector, particularly in operating and net margins, its high valuation multiples, especially its P/E ratio, raise concerns. The company's growth prospects, while positive, do not appear to fully justify the premium valuation, leading us to believe that the stock is fairly priced at current levels.
AZZ's strategic focus on providing specialized solutions in metal coatings and infrastructure, coupled with its strong return on equity, positions it well within its industry. However, the high debt levels and relatively low revenue growth compared to the sector average temper our enthusiasm. We believe investors should remain on the sidelines until a more attractive entry point presents itself or the company demonstrates a more compelling growth trajectory.
Business Strategy & Overview
AZZ Inc. operates through two primary segments: Metal Coatings and Infrastructure Solutions. The Metal Coatings segment provides corrosion protection services, including hot-dip galvanizing, powder coating, and other metal finishing solutions. This segment caters to industries such as electrical, telecommunications, bridge and highway, petrochemical, and general industrial markets. The Infrastructure Solutions segment offers products and services supporting industrial and electrical applications, including custom switchgear, electrical enclosures, and hazardous duty lighting. This segment targets multi-national companies, selling its products through a mix of internal sales, manufacturers' representatives, distributors, and agents.
The company's strategy revolves around providing specialized, high-value solutions within its chosen markets. In the Metal Coatings segment, AZZ focuses on offering a comprehensive suite of services to meet diverse customer needs, emphasizing quality and reliability. In the Infrastructure Solutions segment, the company aims to deliver customized products and engineering resources, leveraging its technical expertise to address complex customer requirements. This dual approach allows AZZ to capture opportunities across different sectors and customer segments.
AZZ's strategic positioning is further enhanced by its focus on serving critical infrastructure markets. The demand for corrosion protection and reliable electrical solutions is relatively stable, driven by the need to maintain and upgrade existing infrastructure, as well as build new facilities. This provides a degree of resilience to AZZ's business, even during economic downturns. Furthermore, the company's geographic diversification, with operations in the United States and internationally, helps to mitigate regional risks and capitalize on growth opportunities in different markets.
Looking ahead, AZZ's growth strategy likely involves expanding its service offerings, penetrating new markets, and pursuing strategic acquisitions. The company may seek to enhance its capabilities in areas such as advanced coatings, digital solutions, and renewable energy infrastructure. By investing in these areas, AZZ can position itself to capitalize on emerging trends and maintain its competitive edge. However, successful execution of this strategy will depend on the company's ability to manage integration risks, maintain quality standards, and adapt to changing customer needs.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
4.1%
Sector: 6.4%
-36% VS SCTR
Economic Moat Analysis
AZZ's economic moat appears to be narrow, primarily derived from a combination of switching costs and specialized expertise within its niche markets. In the Metal Coatings segment, customers may face moderate switching costs due to the need for specific certifications, quality standards, and established relationships with suppliers. Changing providers could involve re-qualifying processes and potential disruptions to supply chains. This creates a degree of stickiness for AZZ's services, particularly for customers with stringent requirements.
The Infrastructure Solutions segment benefits from the company's specialized engineering capabilities and custom product offerings. Providing tailored solutions for complex electrical and industrial applications requires technical expertise and experience, which can be difficult for competitors to replicate. This creates a barrier to entry and allows AZZ to command premium pricing for its products and services. However, the moat is not particularly wide, as other players with similar expertise and capabilities exist in the market.
While AZZ possesses some intangible assets in the form of brand reputation and technical know-how, these are not strong enough to create a wide moat. The company's brand is not widely recognized outside of its specific customer base, and its technical expertise is not necessarily proprietary or unique. Furthermore, the metal coatings and infrastructure solutions industries are relatively fragmented, with numerous competitors offering similar products and services.
AZZ does not appear to benefit significantly from cost advantages or efficient scale. The company's gross margins are lower than the sector average, suggesting that it does not have a significant cost advantage over its competitors. While AZZ has a decent market share in certain niches, it does not dominate the overall market to the extent that it can achieve significant economies of scale. Therefore, we believe that AZZ's economic moat is narrow, providing some competitive protection but not guaranteeing long-term outperformance.
Financial Health & Profitability
AZZ's financial health presents a mixed picture. The company's revenue growth of 4.1% is below the sector average of 6.6%, indicating a potential challenge in expanding its market share. However, its profitability metrics are notably strong. The company boasts an operating margin of 15.9% and a net margin of 20.0%, significantly exceeding the sector averages of 6.2% and 3.7%, respectively. This suggests that AZZ is highly efficient in converting revenue into profit, likely due to its focus on specialized, high-value solutions.
The company's return on equity (ROE) of 25.4% is also significantly higher than the sector average of 9.2%, indicating strong profitability relative to shareholder equity. This suggests that AZZ is effectively utilizing its capital to generate returns for its investors. However, it's important to note that this high ROE could be influenced by the company's leverage.
Speaking of leverage, AZZ's debt-to-equity ratio of 69.00 is comparable to the sector average of 70.00, suggesting a moderate level of financial leverage. While the company's debt is manageable, it does represent a potential risk, particularly if interest rates rise or if the company experiences a decline in profitability. The current ratio of 1.66 indicates that AZZ has sufficient liquid assets to cover its short-term liabilities.
Analyzing the quarterly financial history reveals some fluctuations in revenue and net income. While revenue has remained relatively stable, net income has varied significantly, particularly in Q1 FY2026, which saw a substantial increase. This volatility could be due to various factors, such as project timing, input costs, or one-time gains or losses. The gross margin has remained relatively consistent around 24%, while the operating margin has also shown stability, indicating a consistent level of operational efficiency.
The company's free cash flow generation is strong, with a TTM FCF of $62.10 million. This provides AZZ with the financial flexibility to invest in growth initiatives, make acquisitions, or return capital to shareholders. However, the absence of FCF data in the quarterly history makes it difficult to assess the consistency of cash flow generation over time.
Valuation Assessment
AZZ's valuation appears stretched based on several key metrics. The company's P/E ratio of 86.9x is significantly higher than the sector average of 27.7x, suggesting that investors are paying a substantial premium for its earnings. Similarly, its EV/EBITDA ratio of 12.8x is also higher than the sector average of 5.7x, indicating that the company is relatively expensive compared to its peers.
While AZZ's strong profitability metrics, such as its high operating and net margins, may justify a premium valuation to some extent, the magnitude of the premium raises concerns. The company's revenue growth of 4.1% is below the sector average, which suggests that its growth prospects may not fully support the current valuation. Investors may be overly optimistic about the company's future growth potential or overlooking potential risks.
A discounted cash flow (DCF) analysis would be necessary to determine a more precise intrinsic value for AZZ. However, based on the available data, it appears that the stock is fairly valued to slightly overvalued at current levels. The high valuation multiples suggest that much of the company's future growth is already priced into the stock.
Given the relatively high valuation, investors should exercise caution and carefully consider the potential risks and uncertainties facing the company. Any negative surprises, such as a slowdown in revenue growth or a decline in profitability, could lead to a significant correction in the stock price. A more attractive entry point may present itself if the company's valuation becomes more aligned with its growth prospects and risk profile.
Risk & Uncertainty
AZZ faces several specific risks that could impact its business and financial performance. One key risk is the cyclicality of its end markets. The demand for metal coatings and infrastructure solutions is often tied to economic conditions and capital spending cycles. A slowdown in economic growth or a decline in investment could lead to reduced demand for AZZ's products and services, impacting its revenue and profitability.
Another risk is competition. The metal coatings and infrastructure solutions industries are relatively fragmented, with numerous competitors offering similar products and services. Increased competition could lead to pricing pressure and reduced margins for AZZ. The company must continuously innovate and differentiate its offerings to maintain its competitive edge.
AZZ also faces risks related to raw material costs. The prices of steel, zinc, and other materials used in its products and services can fluctuate significantly. Increases in raw material costs could negatively impact the company's profitability if it is unable to pass these costs on to its customers. The company may use hedging strategies to mitigate this risk, but these strategies may not be fully effective.
The company's debt levels also represent a potential risk. While the debt-to-equity ratio is comparable to the sector average, a significant portion of AZZ's capital structure is financed by debt. This increases the company's financial leverage and makes it more vulnerable to economic downturns or unexpected expenses. The company must carefully manage its debt levels and maintain sufficient liquidity to meet its obligations.
Finally, AZZ faces risks related to regulatory compliance. The company's operations are subject to various environmental, health, and safety regulations. Changes in these regulations could increase the company's compliance costs or restrict its ability to operate in certain areas. The company must invest in compliance programs and maintain strong relationships with regulatory agencies to mitigate this risk.
Bulls Say / Bears Say
The Bull Case
BULL VIEWAZZ's strong profitability, particularly its high operating and net margins, demonstrates its efficiency and ability to generate superior returns compared to its peers.
BULL VIEWThe company's focus on specialized, high-value solutions in critical infrastructure markets provides a degree of resilience and growth potential, even during economic downturns.
The Bear Case
BEAR VIEWAZZ's high valuation multiples, especially its P/E ratio, suggest that the stock is overvalued and vulnerable to a correction if growth expectations are not met.
BEAR VIEWThe company's revenue growth is below the sector average, indicating a potential challenge in expanding its market share and justifying its premium valuation.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score AZZ and 4,400+ other equities.
AZZ INC exhibits a 122% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
15.0%
Sector: 3.3%
Gross Margin
Pricing power and cost efficiency
24.3%
Sector: 35.8%
Operating Margin
Core business profitability
15.9%
Sector: 6.2%
Net Margin
Bottom-line profitability
20.0%
Sector: 3.9%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
