Why Should You Buy Gibraltar Industries (ROCK) Stock Now?

An image of a person going over a financial report
Credit: Shutterstock photo

Construction stocks have gained robust momentum following Donald Trump's presidential victory, revealing investors' expectations of increased infrastructure spending.

In his victory speech, Trump said, "We are going to fix our inner cities, and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We're going to rebuild our infrastructure, and we will put millions of our people to work as we rebuild it."

Among the numerous potential gainers, adding Gibraltar Industries, Inc.ROCK to your portfolio would likely be a promising move.

Over the last 30 days, the Zacks Rank #1 (Strong Buy) stock recorded an average return of 17.22% - outperforming 8.65% returns offered by the Zacks categorized Building & Construction Products - Miscellaneous industry and 2.49% returns provided by the S&P 500 index.

Notably, the attractiveness of this stock as a current investment choice is further underscored by its Growth Style Score 'A' and Momentum Style Score 'B'.

Why the Stock Is a Striking Pick

Revenue Growth: Higher U.S. commercial greenhouse market demand and steady sales for residential products would likely boost Gibraltar Industries' near-term revenues. The company intends to tap greater market share by reinforcing its product portfolio on greater innovations.

Also, the recent Nexus Corporation (Oct, 2016) buyout is expected to bolster revenues by roughly $30 million by the end of 2016.

Investors should also note that the stock has seen its total revenue grow at a compound annual growth rate (CAGR) of 7.9% in the last five years (2011-2015).

Over the last few trailing quarters, margin growth has been impressive for Gibraltar Industries. The company's gross profit margin expanded 480 basis points (bps) year over year in third-quarter 2016.

Margin Improvement:

Gibraltar Industries is making efforts in widening margin by lowering costs via greater operational efficiency.

By the end of 2016, the company estimated that its consolidated gross margin would increase by roughly 500 bps compared to the year-ago value.

Strategic Restructuring Moves: In sync with its 80/20 strategic initiatives program, Gibraltar Industries is deploying resources on the businesses and markets offering maximum returns. Under this regime, the company is consolidating some important facilities as well as existing certain loss-making businesses.

For instance, on Dec 5, 2016, Gibraltar Industries ceased operations of its small European business (offering solar raking products) and the U.S. bar grading product line. The company stated that these product lines had failed to generate profits for a long time, due to adverse market dynamics. By exiting these product lines, the company anticipates to improve operating income by $6 million (or 12 cents per share) by 2016.

Earnings per Share Growth: Gibraltar Industries posted a positive average earnings surprise of 67.30% over the last four trailing quarters, beating estimates in all the four seasons. The company is augmenting its bottom line on the back of sturdy revenue growth, lower costs and meaningful restructuring moves.

For 2016, the company raised its full-year 2016 earnings per share ('EPS') guidance range to $1.57-$1.61 per share, higher than the previously estimated range of $1.37-$1.47 per share.

Upward Estimate Revisions: Over the past 60 days, the Zacks Consensus Estimate for Gibraltar Industries moved up 9.7% to $1.58 per share for 2016 and 9.6% to $1.81 for 2017. The positive earnings estimate revisions indicate analysts' confidence and substantiate the Zacks Rank #1 for the stock.

GIBRALTAR INDUS Price and Consensus


Notably, the stock's projected EPS growth (F1/F0) is currently pegged at 44.95%.

Other Stocks to Consider

Other favorably placed stocks in the industry are Willdan Group, Inc. WLDN , MasTec, Inc. MTZ and Comfort Systems USA, Inc. FIX .

Willdan Group, Inc. has an average positive earnings surprise of 18.72% for the last four trailing quarters. It currently sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

MasTec, Inc. currently carries a Zacks Rank #2 (Buy). The company's average positive earnings surprise is 61.27% for the trailing four quarters.

Comfort Systems USA, Inc. currently has a Zacks Rank #2. The company's average positive earnings surprise is 15.83% for the trailing four quarters.

Zacks' Top Investment Ideas for Long-Term Profit

How would you like to see our best recommendations to help you find today's most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

COMFORT SYSTEMS (FIX): Free Stock Analysis Report

MASTEC INC (MTZ): Free Stock Analysis Report

WILLDAN GROUP (WLDN): Free Stock Analysis Report

GIBRALTAR INDUS (ROCK): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos


Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

Learn More