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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

Why Quanex (NX) Stock Is Nosediving

NX Cover Image

What Happened?

Shares of building products company Quanex (NYSE: NX) fell 10.3% in the afternoon session after it continued a slide from the previous session as the company reported second-quarter results that included a significant miss on profit and a full-year revenue forecast that fell short of Wall Street's expectations. The drop extends a 13.4% decline from Friday, when the building products company announced its quarterly results. Although revenue surpassed expectations, its non-GAAP profit of $0.69 per share came in 18.1% below analysts' consensus estimates. 

Adding to investor concerns, Quanex's full-year revenue guidance of $1.82 billion at the midpoint was 1.6% below what analysts had anticipated. The company disclosed that operational challenges in its Hardware Solutions segment negatively impacted EBITDA by almost $5 million during the quarter. Management noted that it has already made leadership changes and is dedicating more resources to resolve these issues.

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What Is The Market Telling Us

Quanex’s shares are very volatile and have had 21 moves greater than 5% over the last year. But moves this big are rare even for Quanex and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 3 days ago when the stock dropped 13.4% on the news that the company reported second-quarter results that included a significant miss on profit and a full-year revenue forecast that fell short of Wall Street's expectations. Although the company surpassed Wall Street's revenue expectations for the second quarter, its non-GAAP profit of $0.69 per share came in 18.1% below analysts' consensus estimates. Adding to investor concerns, Quanex's full-year revenue guidance of $1.82 billion at the midpoint was 1.6% below what analysts had anticipated. The combination of a substantial earnings miss and a disappointing forward-looking forecast appears to be the primary driver behind the significant drop in the company's stock price.

Quanex is down 29.9% since the beginning of the year, and at $16.48 per share, it is trading 47.7% below its 52-week high of $31.51 from November 2024. Investors who bought $1,000 worth of Quanex’s shares 5 years ago would now be looking at an investment worth $900.55.

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