What Happened?
Shares of water and fire protection solutions company Core & Main (NYSE: CNM) fell 22.9% in the morning session after the company reported second-quarter earnings that beat profit estimates but lowered its full-year financial outlook.
Although the water infrastructure distributor's second-quarter revenue grew 6.6% year-over-year to $2.09 billion and its adjusted earnings per share of $0.87 beat analyst expectations, investors focused on the reduced forecast. Core & Main lowered its full-year sales outlook to between $7.6 billion and $7.7 billion.
More significantly, its full-year adjusted EBITDA guidance of $930 million at the midpoint fell short of analyst estimates of $980 million. The negative revision to its forecast overshadowed the mixed quarterly performance, signaling investor concern about future growth and profitability.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Core & Main? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Core & Main’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. Moves this big are rare for Core & Main and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 15.4% on the news that the company reported impressive third-quarter financial results. Core & Main exceeded analysts' revenue and EBITDA expectations. In addition, full-year revenue guidance was raised, and full-year EBITDA guidance came in ahead of expectations, which is a sign of a healthy business. Overall, we think this was a strong quarter.
Core & Main is up 1.1% since the beginning of the year, but at $51.90 per share, it is still trading 22.5% below its 52-week high of $66.98 from September 2025. Investors who bought $1,000 worth of Core & Main’s shares at the IPO in July 2021 would now be looking at an investment worth $2,190.
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