The AZEK Company: Initiation of Coverage – Is The Robust Demand in Residential Markets Likely To Last?

AZEK Company’s fiscal third quarter of 2024 earnings results demonstrated robust performance, propelled by strategic growth initiatives and market-focused optimization. A 12% net sales increase year-over-year was reported, with the residential segment, excluding the divested Vycom business, seeing an 18% growth. This segment benefited significantly from strong demand across Deck, Rail, and Accessories. Key financial indicators such as adjusted EBITDA saw substantial growth, with a margin expansion of 260 basis points, achieving a record 27.5%. This improvement underscores the effectiveness of AZEK Company’s strategy centered on productivity, advantageous price-cost dynamics, and enhanced use of recycled materials.