What Happened?
Shares of metal coating and infrastructure solutions provider AZZ (NYSE: AZZ) fell 3.5% in the morning session after the company reported third-quarter financial results that fell short of analyst expectations.
The company posted adjusted earnings of $1.55 per share, missing the consensus estimate of $1.57. Revenue for the quarter came in at $417.3 million, representing 2% year-over-year growth but falling short of the anticipated $426.2 million. Additionally, adjusted EBITDA of $88.73 million was 6.6% below Wall Street's forecast. While AZZ did reaffirm its full-year guidance, with both its revenue and EBITDA forecasts coming in slightly above analyst expectations, investors appeared to focus on the current quarter's shortfalls.
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 AZZ? Access our full analysis report here.
What Is The Market Telling Us
AZZ’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 21 days ago when the stock gained 3.9% on the news that investors scooped up equities, shaking off the initial concerns inferred from the Fed's dot plot, with tech stocks leading the charge.
As a reminder, the Federal Reserve cut its benchmark interest rate by 25 basis points the previous day and signaled that more reductions could come before year-end and beyond. Initially when the cut was announced and Fed Chair Powell held his press conference, there was a pullback in the market as the Fed's "dot plot" revealed that only one cut was likely for 2026. This was below the three cuts that had been priced into the markets. This was the first interest rate cut of 2025, a move investors had widely anticipated. In response to the decision, stocks rose significantly, positioning major indexes like the S&P 500 and Nasdaq to open at record levels.
The Fed's decision was influenced by signs of a weakening labor market. Lower interest rates are generally seen as positive for stocks because they reduce borrowing costs for businesses and make fixed-income investments like bonds less attractive by comparison, driving capital into the equity market. While Fed Chair Powell noted the path forward has risks, the prospect of looser monetary policy has fueled optimism on Wall Street.
AZZ is up 25.5% since the beginning of the year, but at $104.04 per share, it is still trading 13% below its 52-week high of $119.54 from September 2025. Investors who bought $1,000 worth of AZZ’s shares 5 years ago would now be looking at an investment worth $2,847.
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