Janus (JBI)

Self-storage and building solutions company Janus (NYSE:JBI) fell short of the markets revenue expectations in Q3 CY2025, with sales falling 4.7% year on year to $219.3 million. The company’s full-year revenue guidance of $875 million at the midpoint came in 1% below analysts’ estimates. Its non-GAAP profit of $0.16 per share was 22% below analysts’ consensus estimates.

Company Overview

Standing out with its digital keyless entry into self-storage room technology, Janus (NYSE:JBI) is a provider of easily accessible self-storage solutions.

Commercial building products companies, which often serve more complicated projects, can supplement their core business with higher-margin installation and consulting services revenues. More recently, advances to address labor availability and job site productivity have spurred innovation. Additionally, companies in the space that can produce more energy-efficient materials have opportunities to take share. However, these companies are at the whim of commercial 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 commercial building products companies.

Other companies operating in the self-storage and commercial industrial door industries include Public Storage (NYSE:PSA) and privately held companies Overhead Door and Steel Storage.

A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Janus grew its sales at a solid 10.4% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Janus’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 9.4% over the last two years.

This quarter, Janus missed Wall Street’s estimates and reported a rather uninspiring 4.7% year-on-year revenue decline, generating $219.3 million of revenue.

Looking ahead, sell-side analysts expect revenue to grow 1.9% over the next 12 months. While this projection implies its newer products and services will catalyze better top-line performance, it is still below the sector average.

Cost of sales for an industrials business is usually comprised of the direct labor, raw materials, and supplies needed to offer a product or service. These costs can be impacted by inflation and supply chain dynamics.

Janus’s unit economics are great compared to the broader industrials sector and signal that it enjoys product differentiation through quality or brand. As you can see below, it averaged an excellent 38.7% gross margin over the last five years. That means Janus only paid its suppliers $61.30 for every $100 in revenue.

In Q3, Janus produced a 39.1% gross profit margin, in line with the same quarter last year. Zooming out, Janus’s full-year margin has been trending down over the past 12 months, decreasing by 3.5 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 a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Janus has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 17%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Looking at the trend in its profitability, Janus’s operating margin decreased by 1.2 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Janus generated an operating margin profit margin of 13.4%, up 1.8 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Revenue trends explain a company’s historical growth, but the 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.

Sadly for Janus, its EPS declined by more than its revenue over the last two years, dropping 26.6%. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand.

We can take a deeper look into Janus’s earnings to better understand the drivers of its performance. While we mentioned earlier that Janus’s operating margin expanded this quarter, a two-year view shows its margin has declined. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q3, Janus reported adjusted EPS of $0.16, up from $0.11 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates. Over the next 12 months, Wall Street expects Janus’s full-year EPS of $0.50 to grow 58.2%.

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

Janus has shown robust cash profitability, enabling it to comfortably ride out cyclical downturns while investing in plenty of new offerings and returning capital to investors. The company’s free cash flow margin averaged 12.8% over the last five years, quite impressive for an industrials business.

Taking a step back, we can see that Janus’s margin expanded by 5.8 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 while its operating profitability fell.

Janus’s free cash flow clocked in at $8.3 million in Q3, equivalent to a 3.8% margin. The company’s cash profitability regressed as it was 13.3 percentage points lower than in the same quarter last year, prompting us to pay closer attention. Short-term fluctuations typically aren’t a big deal because investment needs can be seasonal, but we’ll be watching to see if the trend extrapolates into future quarters.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Although Janus hasn’t been the highest-quality company lately because of its poor bottom-line (EPS) performance, it historically found a few growth initiatives that worked. Its five-year average ROIC was 13.4%, 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, Janus’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.

Janus reported $178.9 million of cash and $549 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $165.6 million of EBITDA over the last 12 months, we view Janus’s 2.2× net-debt-to-EBITDA ratio as safe. We also see its $38.7 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

We struggled to find many positives in these results. Its full-year EBITDA guidance missed and its revenue fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 3.2% to $9 immediately following the results.

Updated: December 4, 2025 at 10:11 PM EST

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

Janus isn’t a terrible business, but it doesn’t pass our bar. Although its revenue growth was solid over the last five years, it’s expected to deteriorate over the next 12 months and its declining EPS over the last three years makes it a less attractive asset to the public markets. And while the company’s rising cash profitability gives it more optionality, the downside is its organic revenue declined.

Janus’s P/E ratio based on the next 12 months is 10.2x. This valuation multiple is fair, but we don’t have much faith in the company. We're fairly confident there are better investments elsewhere.

Wall Street analysts have a consensus one-year price target of $9.30 on the company (compared to the current share price of $6.29).

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.