Armstrong World Industries Inc

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AWI : NYSE : Industrial Goods
$41.35 up 0.50 | 1.20%
Today's Range: 40.97 - 41.52
Avg. Daily Volume: 634,900
07/28/16 - 9:34 AM ET

Financial Analysis


ARMSTRONG WORLD INDUSTRIES's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. ARMSTRONG WORLD INDUSTRIES has weak liquidity. Currently, the Quick Ratio is 0.91 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 10.48% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)571.8551.4
EBITDA ($mil)57.555.0
EBIT ($mil)27.326.5
Net Income ($mil)-9.946.6


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)149.8132.0
Total Assets ($mil)2625.92573.8
Total Debt ($mil)978.21035.3
Equity ($mil)770.3697.2


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin28.2828.65
EBITDA Margin10.059.97
Operating Margin4.774.81
Sales Turnover0.930.96
Return on Assets1.433.63
Return on Equity4.8212.57
Debt Q1 FY16 Q1 FY15
Current Ratio2.012.14
Debt/Capital0.560.6
Interest Expense21.911.2
Interest Coverage1.252.37


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)55.4855.27
Div / share0.00.0
EPS-0.210.07
Book value / share13.8812.61
Institutional Own % n/a n/a
Avg Daily Volume626143.0721182.0

Valuation


HOLD. The current P/E ratio indicates a significant discount compared to an average of 72.33 for the Building Products industry and a significant premium compared to the S&P 500 average of 25.05. To use another comparison, its price-to-book ratio of 2.83 indicates valuation on par with the S&P 500 average of 2.81 and a significant discount versus the industry average of 34.80. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, ARMSTRONG WORLD INDUSTRIES proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AWI 59.61 Peers 72.33   AWI 12.59 Peers 16.34

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

AWI is trading at a discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

AWI is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
AWI 15.74 Peers 21.63   AWI 0.43 Peers 0.98

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

AWI is trading at a discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

AWI trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AWI 2.83 Peers 34.80   AWI -58.23 Peers 421.10

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

AWI is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, AWI is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AWI 0.89 Peers 1.78   AWI -1.47 Peers 9.34

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

AWI is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

AWI significantly trails its peers on the basis of sales growth

 

 

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