Janus (JBI)

Self-storage and building solutions company Janus (NYSE:JBI) beat Wall Street’s revenue expectations in Q1 CY2025, but sales fell by 17.3% year on year to $210.5 million. The company expects the full year’s revenue to be around $875 million, close to analysts’ estimates. Its non-GAAP profit of $0.13 per share was 79.3% above 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 performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Thankfully, Janus’s 13% annualized revenue growth over the last four years was excellent. 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 stretched 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 four-year trend as its revenue has shown annualized declines of 6% over the last two years.

This quarter, Janus’s revenue fell by 17.3% year on year to $210.5 million but beat Wall Street’s estimates by 2%.

Looking ahead, sell-side analysts expect revenue to decline by 4.7% over the next 12 months, similar to its two-year rate. Although this projection is better than its two-year trend, it's hard to get excited about a company that is struggling with demand.

For industrials businesses, cost of sales 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 in the short term and a company’s purchasing power and scale over the long term.

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 38.5% gross margin over the last five years. Said differently, roughly $38.48 was left to spend on selling, marketing, R&D, and general administrative overhead for every $100 in revenue.

Janus produced a 38.9% gross profit margin in Q1, down 4.5 percentage points year on year. Janus’s full-year margin has also been trending down over the past 12 months, decreasing by 2.9 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).

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 17.4%. 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 4.8 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 profit margin of 12%, down 9.8 percentage points year on year. Since Janus’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.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for Janus, its EPS declined by 15.2% annually over the last four years while its revenue grew by 13%. This tells us the company became less profitable on a per-share basis as it expanded.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Janus, its two-year annual EPS declines of 20.3% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q1, Janus reported EPS at $0.13, down from $0.21 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.

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.

Janus has shown terrific cash profitability, putting it in an advantageous position to invest in new products, return capital to investors, and consolidate the market during industry downturns. The company’s free cash flow margin was among the best in the industrials sector, averaging 16.8% over the last five years.

Taking a step back, we can see that Janus’s margin dropped by 1.1 percentage points during that time. Continued declines could signal it is in the middle of an investment cycle.

Janus’s free cash flow clocked in at $41.9 million in Q1, equivalent to a 19.9% margin. The company’s cash profitability regressed as it was 49.1 percentage points lower than in the same quarter last year, but it’s still above its five-year average. We wouldn’t read too much into this quarter’s decline because investment needs can be seasonal, causing short-term swings. Long-term trends trump temporary fluctuations.

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 14%, 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. Fortunately, Janus’s ROIC averaged 1.8 percentage point increases over the last few years. This is a good sign, and we hope the company can keep improving.

Janus reported $140.8 million of cash and $552 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 $180.6 million of EBITDA over the last 12 months, we view Janus’s 2.3× net-debt-to-EBITDA ratio as safe. We also see its $25.1 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 were impressed by how significantly Janus blew past analysts’ revenue, EPS, and EBITDA expectations this quarter. We were also glad its full-year EBITDA guidance topped Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 12% to $8.01 immediately following the results.

Updated: May 22, 2025 at 10:09 PM EDT

Are you wondering whether to buy Janus or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.

We cheer for all companies making their customers lives easier, but in the case of Janus, we’ll be cheering from the sidelines. Although its revenue growth was impressive over the last four 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 impressive operating margins show it has a highly efficient business model, the downside is its declining operating margin shows the business has become less efficient.

Janus’s EV-to-EBITDA ratio based on the next 12 months is 6.1x. While this valuation is reasonable, we don’t see a big opportunity at the moment. There are more exciting stocks to buy at the moment.

Wall Street analysts have a consensus one-year price target of $9.70 on the company (compared to the current share price of $8.23).

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.

Want to invest in a High Quality big tech company? We’d point you in the direction of Microsoft and Google, which have durable competitive moats and strong fundamentals, factors that are large determinants of long-term market outperformance.

To get the best start with StockStory, check out our most recent stock picks, and then sign up for our earnings alerts by adding companies to your watchlist. We typically have quarterly earnings results analyzed within seconds of the data being released, giving investors the chance to react before the market has fully absorbed the information. This is especially true for companies reporting pre-market.