Bragar Eagel & Squire, P.C. Is Investigating Trex, United Homes Group, And Nidec And Encourages Investors To Contact The Firm Regarding Ongoing Investigations

As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the home construction materials industry, including Gibraltar and its peers.

Traditionally, home construction materials companies have built economic moats with expertise in specialized areas, brand recognition, and strong relationships with contractors. More recently, advances to address labor availability and job site productivity have spurred innovation that is driving incremental demand. However, these companies are at the whim of residential 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 home construction materials companies.

The 11 home construction materials stocks we track reported a slower Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 0.6% below.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 10.1% since the latest earnings results.

Gibraltar

Gibraltar makes renewable energy, agriculture technology and infrastructure products. Its mission statement is to make everyday living more sustainable.

Gibraltar reported revenues of $310.9 million, up 12.2% year on year. This print fell short of analysts’ expectations by 2.1%. Overall, it was a softer quarter for the company with a significant miss of analysts’ revenue and EBITDA estimates.

“Our third quarter results reflect our focus on execution in a dynamic business environment, particularly in residential roofing, where our building accessories business posted 2% growth in a market that was down 5% - 10% depending on the channel. In our Agtech business, a large controlled environment agriculture (CEA) project was delayed as expected and impacted revenue in the quarter. On adjusted net sales growth of 13%, adjusted EPS came in slightly below prior year, impacted by both business and product mix. Backlog increased 50% in the quarter and operating cash flow grew 39% to $57 million,” stated Chairman and CEO Bill Bosway.

Unsurprisingly, the stock is down 27.5% since reporting and currently trades at $48.64.

Read our full report on Gibraltar here, it’s free for active Edge members.

Best Q3: Hayward

Credited with introducing the first variable-speed pool pump, Hayward makes residential and commercial pool equipment and accessories.

Hayward reported revenues of $244.3 million, up 7.4% year on year, outperforming analysts’ expectations by 5.5%. The business had a stunning quarter with an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ EBITDA estimates.

Hayward pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems content with the results as the stock is up 2% since reporting. It currently trades at $15.66.

Is now the time to buy Hayward? Access our full analysis of the earnings results here, it’s free for active Edge members.

Slowest Q3: American Woodmark

Starting as a small millwork shop, American Woodmark is a cabinet manufacturing company that helps customers from inspiration to installation.

American Woodmark reported revenues of $394.6 million, down 12.8% year on year, falling short of analysts’ expectations by 2.4%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue estimates and a significant miss of analysts’ adjusted operating income estimates.

Interestingly, the stock is up 4.3% since the results and currently trades at $54.10.

Read our full analysis of American Woodmark’s results here.

Simpson

Aiming to build safer and stronger buildings, Simpson designs and manufactures structural connectors, anchors, and other construction products.

Simpson reported revenues of $623.5 million, up 6.2% year on year. This print surpassed analysts’ expectations by 3.1%. More broadly, it was a slower quarter as it recorded a significant miss of analysts’ EPS estimates and a miss of analysts’ EBITDA estimates.

The stock is down 6.3% since reporting and currently trades at $164.71.

Read our full, actionable report on Simpson here, it’s free for active Edge members.

Trex

Addressing the demand for aesthetically-pleasing and unique outdoor living spaces, Trex Company makes wood-alternative decking, railing, and patio furniture.

Trex reported revenues of $285.3 million, up 22.1% year on year. This result missed analysts’ expectations by 5.3%. Overall, it was a softer quarter as it also recorded full-year revenue guidance missing analysts’ expectations significantly and revenue guidance for next quarter missing analysts’ expectations significantly.

Trex achieved the fastest revenue growth but had the weakest performance against analyst estimates among its peers. The stock is down 26.4% since reporting and currently trades at $34.10.

Read our full, actionable report on Trex here, it’s free for active Edge members.

What Happened?

Shares of composite decking and railing products manufacturer Trex Company jumped 2.9% in the morning session after a board member acquired company stock, signaling insider confidence. According to a regulatory filing, Andrew Rose, a member of the company's board, purchased 1,578 shares for a total value of $55,024. This transaction followed his recent appointment to the Board of Directors. Investors often see insider buying as a positive signal, as it suggests that those with deep knowledge of the company believe its shares are set to perform well in the future.

After the initial pop the shares cooled down to $35.44, up 3.5% from previous close.

Is now the time to buy Trex? Access our full analysis report here.

What Is The Market Telling Us

Trex’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 15 days ago when the stock dropped 2.7% on the news that markets faded the Nvidia rally in the morning session, as investors remained uncertain about future rate cuts. 

While the trading day began with significant enthusiasm, pushing the Dow Jones Industrial Average up more than 700 points and the Nasdaq Composite up 2.6%, momentum quickly evaporated as the session wore on. The primary catalyst for this sharp reversal was a stronger-than-expected jobs report, which reduced the implied odds of a December interest rate cut to less than 40%.This macroeconomic anxiety overshadowed stellar corporate performance. Nvidia initially surged 5% on blockbuster earnings and CEO Jensen Huang's bullish outlook on "off the charts" demand for Blackwell chips. However, the stock eventually turned negative, acting as a heavy weight that dragged the broader indices into the red. The sell-off partly reflects a deepening caution regarding high-flying tech valuations in a "higher-for-longer" rate environment. 

Consequently, investors appeared to rotate capital away from volatile growth sectors and toward defensive staples, evidenced by Walmart's 6% gain following its own earnings beat. Ultimately, the market could not sustain the morning's euphoria, as traders prioritized rate realities over AI potential.

Trex is down 48.1% since the beginning of the year, and at $35.44 per share, it is trading 55.6% below its 52-week high of $79.88 from December 2024. Investors who bought $1,000 worth of Trex’s shares 5 years ago would now be looking at an investment worth $468.65.

What Happened?

A number of stocks fell in the afternoon session after markets faded the Nvidia rally in the morning session, as investors remained uncertain about future rate cuts. 

While the trading day began with significant enthusiasm, pushing the Dow Jones Industrial Average up more than 700 points and the Nasdaq Composite up 2.6%, momentum quickly evaporated as the session wore on. The primary catalyst for this sharp reversal was a stronger-than-expected jobs report, which reduced the implied odds of a December interest rate cut to less than 40%.This macroeconomic anxiety overshadowed stellar corporate performance. Nvidia initially surged 5% on blockbuster earnings and CEO Jensen Huang's bullish outlook on "off the charts" demand for Blackwell chips. However, the stock eventually turned negative, acting as a heavy weight that dragged the broader indices into the red. The sell-off partly reflects a deepening caution regarding high-flying tech valuations in a "higher-for-longer" rate environment. 

Consequently, investors appeared to rotate capital away from volatile growth sectors and toward defensive staples, evidenced by Walmart's 6% gain following its own earnings beat. Ultimately, the market could not sustain the morning's euphoria, as traders prioritized rate realities over AI potential.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Automobile Manufacturing company Ford fell 2.8%. Is now the time to buy Ford? Access our full analysis report here, it’s free for active Edge members.
• Water Infrastructure company Energy Recovery fell 4%. Is now the time to buy Energy Recovery? Access our full analysis report here, it’s free for active Edge members.
• Electrical Systems company Kimball Electronics fell 3.8%. Is now the time to buy Kimball Electronics? Access our full analysis report here, it’s free for active Edge members.
• Home Construction Materials company Trex fell 2.7%. Is now the time to buy Trex? Access our full analysis report here, it’s free for active Edge members.
• Building Materials company Valmont fell 2.8%. Is now the time to buy Valmont? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Energy Recovery (ERII)

Energy Recovery’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 14 days ago when the stock dropped 11.6% on the news that the company reported underwhelming earnings. The company posted revenue of $32 million, which was ahead of the consensus estimate of $29.94 million but still represented a 17.1% decline from the prior year. Similarly, its adjusted earnings per share (EPS) of $0.12 topped the forecast of $0.10. However, the positive top and bottom-line results were overshadowed by weaker underlying metrics. Adjusted EBITDA of $6.8 million missed analyst estimates, and the company's operating margin contracted significantly to 11.4% from 18.3% in the same quarter last year. The sharp year-over-year sales decline and shrinking profitability likely concerned investors, leading to the negative stock reaction despite the headline beats.

Energy Recovery is down 10.7% since the beginning of the year, and at $13.30 per share, it is trading 26.6% below its 52-week high of $18.11 from October 2025. Investors who bought $1,000 worth of Energy Recovery’s shares 5 years ago would now be looking at an investment worth $1,248.