• If you are wondering whether AZZ is still reasonably priced after its run in recent years, this article will help you weigh what you are paying against what you might be getting.
• AZZ's share price closed at US$123.80, with a 0.2% slip over the last 7 days and an 11.7% decline over the last 30 days, set against a 12.8% year to date return and a 44.2% return over the past year.
• Those moves sit on top of multi year gains of 235.5% over 3 years and 148.0% over 5 years. This can change how investors think about risk and reward at today's price. This article was prompted to provide ongoing coverage, so the goal is to put recent trading in context rather than react to a single headline.
• On our valuation checks, AZZ scores 3 out of 6 for potential undervaluation, giving it a valuation score of 3. Next we will walk through how different valuation methods assess the stock, before finishing with a way to look at value that goes beyond any single model.

AZZ delivered 44.2% returns over the last year. See how this stacks up to the rest of the Building industry.

Approach 1: AZZ Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes projected future cash flows and discounts them back to today using a required return, giving an estimate of what the business might be worth right now.

For AZZ, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month free cash flow is reported at about $417.2 million. Analyst inputs and extrapolated estimates suggest free cash flow of $358.6 million in 2026, $161.6 million in 2027 and $218.9 million in 2028, with further projected values out to 2035 supplied by Simply Wall St.

When all those projected cash flows are discounted back to today, the DCF model points to an estimated intrinsic value of about $72.38 per share. Compared with the recent share price of $123.80, this implies the stock is assessed as 71.0% overvalued by this model. In other words, the DCF output indicates you may be paying significantly more than the cash flow estimate suggests the shares might be worth.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests AZZ may be overvalued by 71.0%. Discover 48 high quality undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for AZZ.

Approach 2: AZZ Price vs Earnings

For a profitable company like AZZ, the P/E ratio is a useful shorthand for what you are paying for each dollar of current earnings. Investors usually accept a higher P/E when they expect stronger growth or see lower risk, and look for a lower P/E when growth expectations are modest or risks feel higher.

AZZ is trading on a P/E of 11.5x, compared with the Building industry average of about 20.8x and a broader peer average of 37.1x. Simply Wall St also calculates a Fair Ratio for AZZ of 12.9x. This is a proprietary estimate of what AZZ’s P/E might be given its earnings profile, industry, profit margins, market cap and risk characteristics. It aims to give you a more tailored reference point than a simple comparison with peers or the overall industry, which may have very different growth and risk profiles.

Compared with that Fair Ratio of 12.9x, AZZ’s current 11.5x P/E sits below the level implied by those fundamentals, suggesting the shares screen as undervalued on this metric.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your AZZ Narrative

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St’s Community page you can use Narratives, where you and other investors link your view of AZZ’s story to a specific forecast for revenue, earnings and margins. You can then turn that into a fair value and compare it with the current price to decide whether you see AZZ as attractive or not. Because Narratives update automatically when new news, guidance or earnings arrive, you end up with a living, easy-to-use framework. One investor might build a higher fair value, closer to US$160 per share, based on confidence in AZZ’s FY27 framework and long term targets. Another might anchor closer to US$105 per share, focusing on execution risks and margin pressure. You can see both views side by side, choose the story that best fits your own expectations, and track how it changes over time.

Do you think there's more to the story for AZZ? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.