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AZEK Seen Reporting Strong Fiscal Q2 Adjusted EBITDA Amid Rising Exterior Demand, Wedbush Says

05/11/2021 10:19

02:14 PM EDT, 05/11/2021 (MT Newswires) -- AZEK (AZEK) is expected to more than double adjusted EBITDA in fiscal Q2 compared with a year ago amid "rising" demand for exterior products, a research note from Wedbush said Tuesday.

Wedbush analysts expect fiscal Q2 adjusted EBITDA to surge by 156% to $67.8 million on the back of year-over-year improvements in GAAP gross margins and overhead leverage. Sales are forecast to jump by 14% to $280 million, just shy of the consensus estimate of analysts polled by Capital IQ indicating a $280.8 million print.

"Demand for exterior products including composite decking, the bulk of Azek's sales, has not slowed since the COVID rebound began last summer," Analyst Jay McCanless said while reiterating an outperform rating on the stock with a $52 price target.

The analyst anticipates the earnings call to focus on the demand outlook and, with higher petrochemical prices, details on how Azek plans to offset the cost inflation will also be in focus. Based on recent commentary from Azek's competitors, the analyst said "big box retail demand remains very strong for all of Azek's residential products."

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