Owens Corning (OC) Bundle
Understanding Owens Corning (OC) Revenue Streams
Revenue Analysis
The company reported total revenue of $8.8 billion for the fiscal year 2023, with a detailed breakdown across key business segments.
| Business Segment | Revenue | Percentage of Total Revenue |
|---|---|---|
| Roofing Solutions | $4.2 billion | 47.7% |
| Insulation | $2.9 billion | 33% |
| Composites | $1.7 billion | 19.3% |
Revenue growth trends for the past three years:
- 2021: $7.1 billion
- 2022: $8.3 billion (16.9% year-over-year increase)
- 2023: $8.8 billion (6.0% year-over-year increase)
Geographic revenue distribution:
| Region | Revenue Contribution |
|---|---|
| North America | $6.4 billion (72.7%) |
| Europe | $1.5 billion (17.0%) |
| Other International Markets | $0.9 billion (10.3%) |
Key revenue drivers include residential construction, renovation markets, and industrial applications across multiple segments.
A Deep Dive into Owens Corning (OC) Profitability
Profitability Metrics Analysis
As of fiscal year 2023, the company demonstrated robust financial performance across key profitability metrics.
| Profitability Metric | 2023 Value | 2022 Value |
|---|---|---|
| Gross Profit Margin | 40.2% | 38.7% |
| Operating Profit Margin | 14.6% | 12.9% |
| Net Profit Margin | 10.3% | 9.5% |
Key profitability insights include:
- Net income for 2023: $695 million
- Operating income: $987 million
- Revenue: $6.75 billion
| Efficiency Metric | 2023 Performance |
|---|---|
| Return on Equity (ROE) | 37.5% |
| Return on Assets (ROA) | 15.2% |
Comparative industry profitability ratios reveal the company's strong positioning with margins consistently above sector median.
Debt vs. Equity: How Owens Corning (OC) Finances Its Growth
Debt vs. Equity Structure Analysis
As of Q4 2023, the company's financial structure reveals critical insights into its capital management strategy.
| Debt Metric | Amount ($) |
|---|---|
| Total Long-Term Debt | $1.84 billion |
| Short-Term Debt | $312 million |
| Total Debt | $2.152 billion |
| Shareholders' Equity | $3.67 billion |
| Debt-to-Equity Ratio | 0.59 |
Key debt characteristics include:
- Credit Rating: BBB (Standard & Poor's)
- Average Interest Rate on Debt: 4.75%
- Debt Maturity Profile: Predominantly long-term instruments
Recent financial reporting indicates a strategic approach to capital structure:
- Debt Refinancing in 2023: $500 million at lower interest rates
- Equity Issuance: $250 million through stock offering
- Cash and Liquid Investments: $612 million
| Financing Source | Percentage |
|---|---|
| Debt Financing | 37% |
| Equity Financing | 63% |
Assessing Owens Corning (OC) Liquidity
Liquidity and Solvency Analysis
The company's liquidity metrics reveal critical financial insights for potential investors.
Current and Quick Ratios
| Liquidity Metric | 2023 Value | 2022 Value |
|---|---|---|
| Current Ratio | 1.62 | 1.45 |
| Quick Ratio | 1.18 | 1.03 |
Working Capital Trends
Working capital analysis demonstrates financial flexibility:
- Total Working Capital: $752 million
- Year-over-Year Working Capital Growth: 8.3%
- Net Working Capital Turnover: 3.6x
Cash Flow Statement Overview
| Cash Flow Category | 2023 Amount |
|---|---|
| Operating Cash Flow | $1.24 billion |
| Investing Cash Flow | -$456 million |
| Financing Cash Flow | -$312 million |
Liquidity Strengths
- Cash and Cash Equivalents: $623 million
- Available Credit Lines: $850 million
- Debt-to-Equity Ratio: 0.78
Is Owens Corning (OC) Overvalued or Undervalued?
Valuation Analysis: Is the Stock Overvalued or Undervalued?
The valuation analysis reveals critical insights into the company's current market positioning and investment potential.
| Valuation Metric | Current Value | Industry Benchmark |
|---|---|---|
| Price-to-Earnings (P/E) Ratio | 12.3x | 14.5x |
| Price-to-Book (P/B) Ratio | 2.7x | 3.1x |
| Enterprise Value/EBITDA | 8.6x | 9.2x |
Key valuation metrics indicate potential undervaluation compared to industry benchmarks.
Stock Price Performance
- 52-week stock price range: $74.35 - $106.42
- Current stock price: $89.67
- 12-month price change: +15.3%
Dividend Analysis
| Dividend Metric | Current Value |
|---|---|
| Annual Dividend Yield | 2.4% |
| Dividend Payout Ratio | 32% |
Analyst Recommendations
- Buy recommendations: 58%
- Hold recommendations: 35%
- Sell recommendations: 7%
- Average target price: $98.50
Key Risks Facing Owens Corning (OC)
Risk Factors
The company faces multiple critical risk dimensions across operational, financial, and market domains.
Market and Competitive Risks
| Risk Category | Potential Impact | Probability |
|---|---|---|
| Construction Market Volatility | Revenue Fluctuation | High |
| Raw Material Price Volatility | Margin Compression | Medium |
| Supply Chain Disruptions | Production Delays | Medium-High |
Financial Risk Indicators
- Debt-to-Equity Ratio: 1.42
- Interest Coverage Ratio: 3.75
- Current Liquidity Ratio: 1.63
Operational Risk Assessment
Key operational risks include:
- Manufacturing Equipment Obsolescence
- Regulatory Compliance Challenges
- Technological Disruption Potential
- Workforce Skill Gap
Regulatory Compliance Risks
Environmental regulations pose significant potential financial and operational challenges, with potential annual compliance costs estimated at $12.5 million.
Geopolitical and Economic Risks
| Risk Factor | Estimated Financial Impact |
|---|---|
| Trade Tariff Fluctuations | $8.3 million potential revenue impact |
| International Market Volatility | $5.6 million potential earnings variance |
Future Growth Prospects for Owens Corning (OC)
Growth Opportunities
The company demonstrates robust growth potential through strategic market positioning and targeted expansion initiatives.
Revenue Growth Projections
| Fiscal Year | Projected Revenue | Growth Rate |
|---|---|---|
| 2024 | $8.3 billion | 4.7% |
| 2025 | $8.7 billion | 5.2% |
| 2026 | $9.1 billion | 5.5% |
Key Growth Drivers
- Roofing segment expansion with 15% market share growth potential
- Insulation technology innovations targeting energy-efficient construction
- Strategic international market penetration in Asia-Pacific region
Strategic Initiatives
| Initiative | Investment | Expected Impact |
|---|---|---|
| R&D Technology Investment | $127 million | Enhanced product performance |
| Manufacturing Capacity Expansion | $215 million | 12% production increase |
Competitive Advantages
- Proprietary material technology with 3 pending patents
- Established distribution network covering 48 states
- Sustainable product line representing 22% of total revenue
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