CX

We rate CEMEX SAB DE CV (CX) as a Buy with a composite score of 74.2/100 at a current price of $12.64. The stock scores above average across the majority of our six quantitative factors and ranks #19 out of 7,333 stocks in our universe, reflecting a favorable risk-reward profile.

The rating is primarily driven by strength in momentum (87th percentile) and value (87th percentile), which together account for the majority of the composite score. All factors score above the 40th percentile, indicating no material weakness in the quantitative profile. We assign a Narrow Moat rating (52/100), Medium uncertainty, and Standard capital allocation.

Key items to watch: whether strong momentum is fundamentally supported by revenue trends. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

CEMEX SAB DE CV holds a top-quartile position (#2 of 50) within the Construction sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 74.2/100 places it at rank #19 in our full 7,333-stock universe. With a $32.6B market capitalization, CEMEX SAB DE CV operates at meaningful scale within the Construction sector, providing competitive advantages in distribution, procurement, and customer reach.

Despite positive momentum (87th percentile), revenue contraction of -2% creates a divergence between price action and fundamental trajectory. This divergence suggests either that the market is looking through near-term weakness or that technical factors are temporarily inflating the stock. Investors should assess whether the revenue decline reflects cyclical weakness or structural challenges.

The margin cascade tells an important story: gross margins of 34% (+9.9pp vs sector) narrow to operating margins of 11% (+3.9pp vs sector) and net margins of 5.9%, yielding a gross-to-net conversion rate of 18%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $12.64, CEMEX SAB DE CV appears undervalued relative to its fundamentals. Our value factor score of 87/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 568.7x (a 2875% premium to the sector median of 19.1x), EV/EBITDA of 2.0x (discounted to peers), P/B of 1.5x, P/S of 0.3x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a Medium uncertainty rating to CEMEX SAB DE CV. The stock presents a balanced risk profile: elevated valuation multiple (P/E 568.7x) that leaves limited margin for error. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: elevated valuation multiple (P/E 568.7x) that leaves limited margin for error. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 77th percentile and quality factor at the 81th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: above-average stability (77th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate CEMEX SAB DE CV's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 31.5%, and the balance sheet is managed within acceptable parameters (D/E: 60%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; CEMEX SAB DE CV falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 1.10% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, CEMEX SAB DE CV receives a Buy rating with a composite score of 74.2/100 (rank #19 of 7,333). Our quantitative framework assigns a Narrow Moat (52/100, trend: stable), Medium uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 80/100.

Our analysis supports a constructive view on CEMEX SAB DE CV. The combination of identifiable competitive advantages, medium uncertainty, and standard capital allocation creates a risk-reward profile that favors accumulation at current levels. We recommend investors consider adding this name to portfolios aligned with the stock's risk profile.