The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Sherwin-Williams (NYSE: SHW) and the rest of the building materials stocks fared in Q1.

Traditionally, building materials companies have built competitive advantages with economies of scale, brand recognition, and strong relationships with builders and contractors. More recently, advances to address labor availability and job site productivity have spurred innovation. Additionally, companies in the space that can produce more energy-efficient materials have opportunities to take share. However, these companies are at the whim of construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of building materials companies.

The 9 building materials stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was in line.

Thankfully, share prices of the companies have been resilient as they are up 9.3% on average since the latest earnings results.

Sherwin-Williams (NYSE: SHW)

Widely known for its success in the paint industry, Sherwin-Williams (NYSE: SHW) is a manufacturer of paints, coatings, and related products.

Sherwin-Williams reported revenues of $5.31 billion, down 1.1% year on year. This print fell short of analysts’ expectations by 1.6%. Overall, it was a mixed quarter for the company with a solid beat of analysts’ adjusted operating income estimates but a miss of analysts’ organic revenue estimates.

"In a demand environment that remained choppy as we anticipated, Sherwin-Williams continued to execute our strategy and delivered solid first quarter results driven by gross margin expansion and good cost control," said Chair, President and Chief Executive Officer, Heidi G. Petz.

The stock is up 6.7% since reporting and currently trades at $354.

Read our full report on Sherwin-Williams here, it’s free.

Best Q1: Tecnoglass (NYSE: TGLS)

The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE: TGLS) is a manufacturer of architectural glass, windows, and aluminum products.

Tecnoglass reported revenues of $222.3 million, up 15.4% year on year, outperforming analysts’ expectations by 3.3%. The business had an exceptional quarter with an impressive beat of analysts’ adjusted operating income estimates.

The market seems happy with the results as the stock is up 22.2% since reporting. It currently trades at $86.44.

Is now the time to buy Tecnoglass? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: UFP Industries (NASDAQ: UFPI)

Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ: UFPI) is a holding company making building materials for the construction, retail, and industrial sectors.

UFP Industries reported revenues of $1.60 billion, down 2.7% year on year, falling short of analysts’ expectations by 1.9%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.

UFP Industries delivered the slowest revenue growth in the group. As expected, the stock is down 8.4% since the results and currently trades at $97.53.

Read our full analysis of UFP Industries’s results here.

AZEK (NYSE: AZEK)

With a significant portion of its products made from recycled materials, AZEK (NYSE: AZEK) designs and manufactures goods for outdoor living spaces.

AZEK reported revenues of $452.2 million, up 8.1% year on year. This result surpassed analysts’ expectations by 1.9%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ organic revenue and EBITDA estimates.

AZEK had the weakest full-year guidance update among its peers. The stock is down 3.3% since reporting and currently trades at $48.

Read our full, actionable report on AZEK here, it’s free.

Armstrong World (NYSE: AWI)

Started as a two-man shop dating back to the 1860s, Armstrong (NYSE: AWI) provides ceiling and wall products to commercial and residential spaces.

Armstrong World reported revenues of $382.7 million, up 17.3% year on year. This number beat analysts’ expectations by 3.4%. It was a strong quarter as it also recorded a solid beat of analysts’ adjusted operating income estimates.

Armstrong World pulled off the biggest analyst estimates beat among its peers. The stock is up 12.2% since reporting and currently trades at $155.49.

Read our full, actionable report on Armstrong World here, it’s free.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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