📊 AZZ Key Takeaways
Is Azz Inc. (AZZ) a Good Investment?
AZZ demonstrates exceptional operational efficiency with 19.2% net margins and outstanding free cash flow generation ($444.7M, 26.9% FCF margin), backed by a fortress balance sheet (0.36x debt/equity, 1.70x current ratio) and strong returns (23.7% ROE). However, modest revenue growth (+4.6% YoY) paired with flat net income growth signals margin pressure or cost headwinds that warrant monitoring.
AZZ shows solid underlying fundamentals with healthy operating margins, strong free cash flow generation, and manageable leverage. However, growth quality is mixed because revenue growth is modest while net income appears disproportionately elevated, suggesting possible non-operating or one-time benefits rather than broad-based earnings expansion. The business looks financially sound, but the durability of current earnings strength needs confirmation.
Azz Inc. Key Strengths (AZZ)
- Exceptional profitability and margins - 19.2% net margin and 16.0% operating margin demonstrate strong pricing power and operational excellence
- Outstanding cash flow generation - $444.7M free cash flow with 26.9% FCF margin shows superior working capital management and cash conversion
- Conservative balance sheet and strong returns - 0.36x debt/equity, 4.8x interest coverage, 23.7% ROE, and 14.3% ROA indicate disciplined capital allocation
- Efficient capital deployment - 486.6% EPS growth on flat net income reflects aggressive share buyback program reducing share count
- Strong cash generation with $394.15M in free cash flow and a 31.2% FCF margin
- Healthy profitability profile with 24.3% gross margin, 16.4% operating margin, and 22.8% ROE
- Balance sheet remains manageable with 1.66x current ratio and 0.41x debt-to-equity
AZZ Stock Risks: Azz Inc. Investment Risks
- Organic growth stalling - only 4.6% revenue growth with 0% net income growth suggests margin compression or rising input costs despite scale
- Cyclical industry exposure - coating and engraving services are sensitive to industrial production cycles and economic downturns
- Margin sustainability questions - unusual net margin of 19.2% for industrial services sector raises questions about one-time items or unsustainable pricing
- Revenue growth of only 2.6% suggests limited top-line momentum
- Net income growth far outpaces revenue growth, raising concern about earnings quality and sustainability
- Very low cash balance and only moderate 4.7x interest coverage reduce financial flexibility
Key Metrics to Watch
- Organic revenue growth acceleration - critical to verify if 4.6% growth represents a trough or structural slowdown
- Gross and operating margin trends - monitor if margins stabilize or continue compressing
- Free cash flow sustainability - ensure $444.7M FCF is not artificially inflated and remains maintainable
- Organic revenue growth and segment-level margin trends
- Conversion of net income into operating cash flow and free cash flow over future periods
Azz Inc. (AZZ) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 26.9% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments.
AZZ Profit Margin, ROE & Profitability Analysis
AZZ vs Services Sector: How Azz Inc. Compares
How Azz Inc. compares to Services sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Azz Inc. Stock Overvalued? AZZ Valuation Analysis 2026
Based on fundamental analysis, Azz Inc. appears fundamentally strong relative to the Services 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.
Azz Inc. Balance Sheet: AZZ Debt, Cash & Liquidity
AZZ Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Azz Inc.'s revenue has grown significantly by 55% over the 5-year period, indicating strong business expansion. The most recent EPS of $3.46 reflects profitable operations.
AZZ Revenue Growth, EPS Growth & YoY Performance
AZZ Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $403.7M | $33.6M | $1.11 |
| Q2 2026 | $409.0M | $35.4M | $-0.05 |
| Q1 2026 | $413.2M | $39.6M | $-1.38 |
| Q3 2025 | $381.6M | $26.9M | $0.92 |
| Q2 2025 | $398.5M | $28.3M | $-0.05 |
| Q1 2025 | $390.9M | $28.5M | $0.98 |
| Q3 2024 | $373.3M | -$20.5M | $0.92 |
| Q2 2024 | $398.5M | $28.3M | $0.97 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Azz Inc. Dividends, Buybacks & Capital Allocation
AZZ SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Azz Inc. (CIK: 0000008947)
📋 Recent SEC Filings
❓ Frequently Asked Questions about AZZ
What is the AI rating for AZZ?
Azz Inc. (AZZ) has a Combined AI Grade of A from Claude (A) and ChatGPT (B) with 78% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are AZZ's key strengths?
Claude: Exceptional profitability and margins - 19.2% net margin and 16.0% operating margin demonstrate strong pricing power and operational excellence. Outstanding cash flow generation - $444.7M free cash flow with 26.9% FCF margin shows superior working capital management and cash conversion. ChatGPT: Strong cash generation with $394.15M in free cash flow and a 31.2% FCF margin. Healthy profitability profile with 24.3% gross margin, 16.4% operating margin, and 22.8% ROE.
What are the risks of investing in AZZ?
Claude: Organic growth stalling - only 4.6% revenue growth with 0% net income growth suggests margin compression or rising input costs despite scale. Cyclical industry exposure - coating and engraving services are sensitive to industrial production cycles and economic downturns. ChatGPT: Revenue growth of only 2.6% suggests limited top-line momentum. Net income growth far outpaces revenue growth, raising concern about earnings quality and sustainability.
What is AZZ's revenue and growth?
Azz Inc. reported revenue of $1.7B.
Does AZZ pay dividends?
Azz Inc. pays dividends, with $23.1M distributed to shareholders in the trailing twelve months.
Where can I find AZZ SEC filings?
Official SEC filings for Azz Inc. (CIK: 0000008947) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is AZZ's EPS?
Azz Inc. has a diluted EPS of $10.50.
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 AZZ's fundamental grade?
Based on our AI fundamental analysis in June 2026, Azz Inc. has a A grade with 78% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is AZZ stock overvalued or undervalued?
Valuation metrics for AZZ: ROE of 23.7% (sector avg: 16%), net margin of 19.2% (sector avg: 10%). Higher ROE suggests strong returns relative to peers.
What is AZZ's AI grade for 2026?
Our dual AI analysis gives Azz Inc. a combined A grade for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is AZZ's free cash flow?
Azz Inc.'s operating cash flow is $525.4M, with capital expenditures of $80.8M. FCF margin is 26.9%.
How does AZZ compare to other Services stocks?
Vs Services sector averages: Net margin 19.2% (avg: 10%), ROE 23.7% (avg: 16%), current ratio 1.70 (avg: 1.5).