📊 AWI Key Takeaways
Is Armstrong World Industries Inc. (AWI) a Good Investment?
Armstrong displays strong profitability growth with net income expanding 16.5% YoY and healthy operating margins of 23%, supported by solid revenue growth and manageable leverage. However, free cash flow generation is severely limited at only 3.5% FCF margin, with operating cash flow of $32.1M representing just 48% of net income, suggesting working capital inefficiency or earnings quality concerns that cap investment appeal.
ARMSTRONG WORLD INDUSTRIES INC shows strong underlying fundamentals, with double-digit revenue growth, high operating and net margins, and robust free cash flow generation. The balance sheet appears healthy with moderate leverage and strong interest coverage, although flat net income against higher sales suggests earnings growth quality should be monitored for margin sustainability and cost pressures.
Armstrong World Industries Inc. Key Strengths (AWI)
- Revenue growth acceleration with net income outpacing top-line growth (16.5% vs 12.1% YoY)
- Robust operating margins (23%) and net margins (16.3%) indicating pricing power and operational control
- Strong interest coverage ratio of 12.9x and moderate leverage at 0.53x debt-to-equity with healthy liquidity
- High profitability with 40.6% gross margin, 26.6% operating margin, and 19.0% net margin
- Solid financial health with 1.46x current ratio, 0.44x debt/equity, and 13.1x interest coverage
- Strong cash generation with $355.5M operating cash flow and $246.1M free cash flow, supporting reinvestment and capital returns
AWI Stock Risks: Armstrong World Industries Inc. Investment Risks
- Critically weak free cash flow conversion at 3.5% FCF margin limits capital allocation flexibility for dividends, debt reduction, or growth
- Operating cash flow only 48% of net income signals potential working capital management issues or earnings quality deterioration
- Low return metrics (7.5% ROE, 3.4% ROA) indicate inefficient capital deployment relative to asset base
- Net income was flat despite 12.1% revenue growth, which may indicate rising costs or reduced operating leverage
- EPS growth outpaced net income growth, suggesting per-share gains may rely partly on share count reduction rather than pure earnings expansion
- Exposure to cyclical construction and renovation demand could pressure revenue and margins in a weaker economic environment
Key Metrics to Watch
- Operating cash flow as % of net income trend (cash conversion quality)
- Working capital changes and days sales outstanding (DSO) and days payable outstanding (DPO)
- Free cash flow margin trajectory and reinvestment efficiency
- Operating margin and net income conversion as revenue grows
- Free cash flow consistency relative to capital expenditure needs
Armstrong World Industries Inc. (AWI) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 3.5% FCF margin may limit capital allocation flexibility.
AWI Profit Margin, ROE & Profitability Analysis
AWI vs Materials Sector: How Armstrong World Industries Inc. Compares
How Armstrong World Industries Inc. compares to Materials sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Armstrong World Industries Inc. Stock Overvalued? AWI Valuation Analysis 2026
Based on fundamental analysis, Armstrong World Industries Inc. has mixed fundamental signals relative to the Materials sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Armstrong World Industries Inc. Balance Sheet: AWI Debt, Cash & Liquidity
AWI Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Armstrong World Industries Inc.'s revenue has grown significantly by 46% over the 5-year period, indicating strong business expansion. The most recent EPS of $4.99 reflects profitable operations.
AWI Revenue Growth, EPS Growth & YoY Performance
AWI Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $382.7M | $66.8M | $1.55 |
| Q3 2025 | $386.6M | $76.9M | $1.75 |
| Q2 2025 | $365.1M | $65.9M | $1.50 |
| Q1 2025 | $326.3M | $59.9M | $1.36 |
| Q3 2024 | $347.3M | $69.5M | $1.56 |
| Q2 2024 | $325.4M | $60.2M | $1.34 |
| Q1 2024 | $310.2M | $47.3M | $1.04 |
| Q3 2023 | $325.0M | $57.5M | $1.25 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Armstrong World Industries Inc. Dividends, Buybacks & Capital Allocation
AWI SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Armstrong World Industries Inc. (CIK: 0000007431)
📋 Recent SEC Filings
❓ Frequently Asked Questions about AWI
What is the AI rating for AWI?
Armstrong World Industries Inc. (AWI) has a Combined AI Grade of A from Claude (B) and ChatGPT (A) with 77% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are AWI's key strengths?
Claude: Revenue growth acceleration with net income outpacing top-line growth (16.5% vs 12.1% YoY). Robust operating margins (23%) and net margins (16.3%) indicating pricing power and operational control. ChatGPT: High profitability with 40.6% gross margin, 26.6% operating margin, and 19.0% net margin. Solid financial health with 1.46x current ratio, 0.44x debt/equity, and 13.1x interest coverage.
What are the risks of investing in AWI?
Claude: Critically weak free cash flow conversion at 3.5% FCF margin limits capital allocation flexibility for dividends, debt reduction, or growth. Operating cash flow only 48% of net income signals potential working capital management issues or earnings quality deterioration. ChatGPT: Net income was flat despite 12.1% revenue growth, which may indicate rising costs or reduced operating leverage. EPS growth outpaced net income growth, suggesting per-share gains may rely partly on share count reduction rather than pure earnings expansion.
What is AWI's revenue and growth?
Armstrong World Industries Inc. reported revenue of $409.9M.
Does AWI pay dividends?
Armstrong World Industries Inc. pays dividends, with $14.7M distributed to shareholders in the trailing twelve months.
Where can I find AWI SEC filings?
Official SEC filings for Armstrong World Industries Inc. (CIK: 0000007431) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is AWI's EPS?
Armstrong World Industries Inc. has a diluted EPS of $1.55.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is AWI's fundamental grade?
Based on our AI fundamental analysis in June 2026, Armstrong World Industries Inc. has a A grade with 77% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is AWI stock overvalued or undervalued?
Valuation metrics for AWI: ROE of 7.5% (sector avg: 14%), net margin of 16.3% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
What is AWI's AI grade for 2026?
Our dual AI analysis gives Armstrong World Industries Inc. a combined A grade for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is AWI's free cash flow?
Armstrong World Industries Inc.'s operating cash flow is $32.1M, with capital expenditures of $17.7M. FCF margin is 3.5%.
How does AWI compare to other Materials stocks?
Vs Materials sector averages: Net margin 16.3% (avg: 10%), ROE 7.5% (avg: 14%), current ratio 1.54 (avg: 1.6).