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Owens Corning (OC): Buy, Sell, or Hold Post Q2 Earnings?

By: StockStory

October 08, 2025 at 00:03 AM EDT

OC Cover Image

While the S&P 500 is up 34.7% since April 2025, Owens Corning (currently trading at $133.41 per share) has lagged behind, posting a return of 5.6%. This may have investors wondering how to approach the situation.

Is now the time to buy Owens Corning, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it’s free for active Edge members.

Why Is Owens Corning Not Exciting?

We don't have much confidence in Owens Corning. Here are three reasons why OC doesn't excite us and a stock we'd rather own.

1. Core Business Falling Behind as Demand Declines

We can better understand Home Construction Materials companies by analyzing their organic revenue. This metric gives visibility into Owens Corning’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.

Over the last two years, Owens Corning’s organic revenue averaged 4.1% year-on-year declines. This performance was underwhelming and implies it may need to improve its products, pricing, or go-to-market strategy. It also suggests Owens Corning might have to lean into acquisitions to grow, which isn’t ideal because M&A can be expensive and risky (integrations often disrupt focus). Owens Corning Organic Revenue Growth

2. Free Cash Flow Margin Dropping

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

As you can see below, Owens Corning’s margin dropped by 7.6 percentage points over the last five years. If its declines continue, it could signal increasing investment needs and capital intensity. Owens Corning’s free cash flow margin for the trailing 12 months was 8.2%.

Owens Corning Trailing 12-Month Free Cash Flow Margin

3. New Investments Fail to Bear Fruit as ROIC Declines

ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, Owens Corning’s ROIC has unfortunately decreased. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities.

Owens Corning Trailing 12-Month Return On Invested Capital

Final Judgment

Owens Corning isn’t a terrible business, but it doesn’t pass our bar. With its shares trailing the market in recent months, the stock trades at 9.9× forward P/E (or $133.41 per share). While this valuation is optically cheap, the potential downside is big given its shaky fundamentals. We're fairly confident there are better investments elsewhere. We’d recommend looking at a fast-growing restaurant franchise with an A+ ranch dressing sauce.

Stocks We Would Buy Instead of Owens Corning

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

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