Gibraltar (ROCK)

Renewable energy and infrastructure solutions provider Gibraltar Industries (NASDAQ:ROCK) reported Q4 CY2025 results topping the market’s revenue expectations, but sales fell by 11% year on year to $268.7 million. The company’s full-year revenue guidance of $1.80 billion at the midpoint came in 50.8% above analysts’ estimates. Its non-GAAP profit of $0.76 per share was 2.2% above analysts’ consensus estimates.

Company Overview

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

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.

Other companies operating in the renewable energy, AgTech, and infrastructure markets include Valmont (NYSE:VMI), Lindsay (NYSE:LNN), and SolarEdge (NASDAQ:SEDG).

A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, Gibraltar’s 1.9% annualized revenue growth over the last five years was sluggish. This was below our standards and is a rough starting point for our analysis.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Gibraltar’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 9.2% annually.

This quarter, Gibraltar’s revenue fell by 11% year on year to $268.7 million but beat Wall Street’s estimates by 1.3%.

Looking ahead, sell-side analysts expect revenue to grow 4.4% over the next 12 months. While this projection implies its newer products and services will spur better top-line performance, it is still below the sector average.

All else equal, we prefer higher gross margins because they usually indicate that a company sells more differentiated products and commands stronger pricing power.

Gibraltar has bad unit economics for an industrials company, giving it less room to reinvest and develop new offerings. As you can see below, it averaged a 25.5% gross margin over the last five years. That means Gibraltar paid its suppliers a lot of money ($74.48 for every $100 in revenue) to run its business.

This quarter, Gibraltar’s gross profit margin was 24.1%, down 1.8 percentage points year on year. Gibraltar’s full-year margin has also been trending down over the past 12 months, decreasing by 1.8 percentage points. If this move continues, it could suggest a more competitive environment with some pressure to lower prices and higher input costs (such as raw materials and manufacturing expenses).

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Gibraltar has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 11.1%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.

Looking at the trend in its profitability, Gibraltar’s operating margin rose by 3.1 percentage points over the last five years, as its sales growth gave it operating leverage.

In Q4, Gibraltar generated an operating margin profit margin of 5.5%, down 5.6 percentage points year on year. Since Gibraltar’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Gibraltar’s EPS grew at an unimpressive 6.1% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 1.9% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Gibraltar’s earnings to better understand the drivers of its performance. As we mentioned earlier, Gibraltar’s operating margin declined this quarter but expanded by 3.1 percentage points over the last five years. Its share count also shrank by 9.6%, and these factors together are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Gibraltar, its two-year annual EPS declines of 1.6% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q4, Gibraltar reported adjusted EPS of $0.76, down from $1.01 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 2.2%. Over the next 12 months, Wall Street expects Gibraltar’s full-year EPS of $3.98 to grow 9%.

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

Gibraltar has shown impressive cash profitability, enabling it to ride out cyclical downturns more easily while maintaining its investments in new and existing offerings. The company’s free cash flow margin averaged 8.9% over the last five years, better than the broader industrials sector.

Taking a step back, we can see that Gibraltar’s margin expanded by 9.9 percentage points during that time. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability.

Gibraltar’s free cash flow clocked in at $22.77 million in Q4, equivalent to a 8.5% margin. This result was good as its margin was 3.7 percentage points higher than in the same quarter last year, building on its favorable historical trend.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

Although Gibraltar hasn’t been the highest-quality company lately because of its poor top-line performance, it historically found a few growth initiatives that worked. Its five-year average ROIC was 12.5%, higher than most industrials businesses.

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. Uneventfully, Gibraltar’s ROIC has stayed the same over the last few years. Given the company’s underwhelming financial performance in other areas, we’d like to see its returns improve before recommending the stock.

One of the best ways to mitigate bankruptcy risk is to hold more cash than debt.

Gibraltar is a profitable, well-capitalized company with $115.7 million of cash and $46.2 million of debt on its balance sheet. This $69.53 million net cash position is 4.8% of its market cap and gives it the freedom to borrow money, return capital to shareholders, or invest in growth initiatives. Leverage is not an issue here.

We were impressed by Gibraltar’s optimistic full-year revenue guidance, which blew past analysts’ expectations. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance missed. Overall, this print had some key positives. The stock remained flat at $49.21 immediately following the results.

Updated: February 26, 2026 at 7:59 AM EST

We think that the latest earnings result is only one piece of the bigger puzzle. If you’re deciding whether to own Gibraltar, you should also grasp the company’s longer-term business quality and valuation.

We see the value of companies helping their customers, but in the case of Gibraltar, we’re out. To kick things off, its revenue growth was weak over the last five years. While its rising cash profitability gives it more optionality, the downside is its gross margins are lower than its industrials peers. On top of that, its unimpressive EPS growth over the last five years shows it’s failed to produce meaningful profits for shareholders.

Gibraltar’s P/E ratio based on the next 12 months is 11.3x. This valuation is reasonable, but the company’s shaky fundamentals present too much downside risk. There are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $73 on the company (compared to the current share price of $49.21).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.