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AZEK, The Azek Company Inc.

Containers & Packaging consumer brand

A consumer-brand business, where the durable asset is the brand and the pricing power it commands.

Latest annual: FY2024 10-K

AZEK · The Azek Company Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2024

$1.4B

+5.2% YoY · 13% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $1.5B 5-yr avg $1.2B

Gross margin 37% 5-yr avg 33%

Operating margin 15.4% 5-yr avg 8.3%

ROIC 10% 5-yr avg 5%

Owner-earnings margin 14% 5-yr avg 8%

Free cash flow margin 14% 5-yr avg 6%

The business in brief

What this business is and what moves its needle, from its own SEC filings.

What moves the needle: Gross margin has run about 32% and operating margin about 8.7% through the cycle, a solid spread between what it charges and what the product costs to make. The operating margin has swung widely — from −2.4% to 15% — on a steadier 32% gross margin, so what moves it sits below the gross line, in operating spend and one-off charges more than in the cost of the product itself. Inventory runs near 15% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median 5%, above 15% in 0 of 5 years). By owner earnings: roughly 4% of revenue reaches owners as cash, consistently. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2018–2024

realized figures from each filing · older years to the left

2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	TTMTTMMar 2025
								Income statement
$682M	$794M	$899M	$1.2B	$1.4B	$1.4B	$1.4B	$1.5B	RevenueRevenue
30%	32%	33%	33%	29%	31%	38%	37%	Gross marginGross mgn
21%	23%	34%	21%	21%	22%	23%	22%	SG&A / revenueSG&A/rev
1%	1%	1%	1%	1%	1%	1%	1%	R&D / revenueR&D/rev
$52M	$59M	($22M)	$136M	$118M	$124M	$212M	$234M	Operating incomeOp. inc.
7.7%	7.4%	−2.4%	11.6%	8.7%	9.0%	14.7%	15.4%	Operating marginOp. mgn
$7M	($20M)	($122M)	$89M	$67M	$62M	$153M	$151M	Net incomeNet inc.
—	—	—	24%	28%	26%	27%	22%	Effective tax rateTax rate
								Cash flow & returns
$67M	$95M	$98M	$207M	$106M	$363M	$224M	$316M	Operating cash flowOp. cash
$78M	$94M	$100M	$102M	$119M	$133M	$129M	$131M	DepreciationDeprec.
($17M)	$21M	$121M	$17M	($80M)	$168M	($58M)	$34M	Working capital & otherWC & other
$43M	$63M	$96M	$175M	$171M	$89M	$77M	$108M	CapexCapex
6.3%	7.9%	10.6%	14.8%	12.6%	6.5%	5.4%	7.1%	Capex / revenueCapex/rev
$25M	$32M	$3M	$106M	($13M)	$274M	$147M	$208M	Owner earningsOwner earn.
3.6%	4.0%	0.3%	9.0%	−0.9%	20.0%	10.2%	13.7%	Owner earnings marginOE mgn
$25M	$32M	$3M	$33M	($65M)	$274M	$147M	$208M	Free cash flowFCF
3.6%	4.0%	0.3%	2.8%	−4.8%	20.0%	10.2%	13.7%	Free cash flow marginFCF mgn
$293M	—	$18M	—	$108M	$161K	$6M	$24M	AcquisitionsAcquis.
—	—	—	—	$81M	$115M	$243M	—	BuybacksBuybacks
—	—	-1%	6%	4%	5%	10%	10%	ROICROIC
1%	-4%	-9%	6%	5%	4%	11%	10%	Return on equityROE
1%	−4%	−9%	6%	5%	4%	11%	10%	Retained to equityRetained/eq
								Balance sheet
$82M	$106M	$215M	$66M	$26M	$278M	$164M	$147M	Cash & investmentsCash+inv
—	$53M	$71M	$63M	$172M	$58M	$50M	$137M	ReceivablesReceiv.
—	$115M	$130M	$278M	$281M	$196M	$224M	$224M	InventoryInvent.
—	$47M	$42M	$64M	$76M	$56M	$58M	$61M	Accounts payablePayables
—	$121M	$159M	$276M	$376M	$197M	$216M	$300M	Operating working capitalOper. WC
—	$291M	$425M	$427M	$506M	$561M	$471M	$561M	Current assetsCur. assets
—	$140M	$124M	$164M	$175M	$190M	$217M	$228M	Current liabilitiesCur. liab.
—	2.1×	3.4×	2.6×	2.9×	3.0×	2.2×	2.5×	Current ratioCurr. ratio
$944M	$944M	$951M	$951M	$994M	$994M	$968M	$974M	GoodwillGoodwill
$1.8B	$1.8B	$1.9B	$2.2B	$2.4B	$2.3B	$2.2B	$2.3B	Total assetsAssets
—	$1.1B	$463M	$465M	$510M	$586M	$433M	$432M	Total debtDebt
—	$1.0B	$248M	$399M	$484M	$308M	$269M	$286M	Net debt / (cash)Net debt
0.8×	0.7×	-0.3×	6.7×	4.7×	2.8×	3.8×	4.3×	Interest coverageInt. cov.
$506M	$490M	$1.3B	$1.4B	$1.4B	$1.4B	$1.4B	$1.5B	Shareholders’ equityEquity
								Per share
108M	108M	121M	157M	155M	151M	147M	145M	Shares out (diluted)Shares
$6.30	$7.34	$7.45	$7.53	$8.77	$9.08	$9.77	$10.45	Revenue / shareRev/sh
$0.06	$-0.19	$-1.01	$0.57	$0.43	$0.41	$1.04	$1.04	EPS (diluted)EPS
$0.23	$0.29	$0.02	$0.68	$-0.08	$1.82	$1.00	$1.43	Owner earnings / shareOE/sh
$0.23	$0.29	$0.02	$0.21	$-0.42	$1.82	$1.00	$1.43	Free cash flow / shareFCF/sh
$0.40	$0.58	$0.79	$1.12	$1.11	$0.59	$0.52	$0.74	Cap. spending / shareCapex/sh
$4.67	$4.53	$10.78	$9.07	$9.26	$9.35	$9.20	$9.99	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	6-yr	5-yr
Revenue / share	+7.6%/yr	+5.9%/yr
Owner earnings / share	+28.0%/yr	+27.7%/yr
EPS	+59.8%/yr	—
Capital spending / share	+4.8%/yr	−2.1%/yr
Book value / share	+11.9%/yr	+15.2%/yr

The record, charted

FY2018–2024

Each measure over its full record; the current point and the worst year marked.

Share count

147Mpeak FY2021

ROIC

10%low FY2020

Gross margin

38%low FY2022

Net debt ÷ owner earnings

1.8×peak FY2020

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$147Mowner earningsvs.$153Mnet incomelow FY2022

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2018FY2024

Owner-earnings bridge

FY2020–FY2024cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2024 the business reported $153M of profit but $147M of owner earnings: $6M less than the profit line, taken out by capital spending and the timing of cash.

Reported net income$153M

Owner earnings$147M · 10% of revenue

	FY2024	FY2023	FY2022	FY2021	FY2020
Reported net income	$153M	$62M	$67M	$89M	($122M)
Depreciation & amortizationnon-cash charge added back	+$129M	+$133M	+$119M	+$102M	+$100M
Working capital & othertiming of cash in and out, other non-cash items	−$58M	+$168M	−$80M	+$17M	+$121M
Cash from operations	$224M	$363M	$106M	$207M	$98M
Maintenance capital expenditurethe spending needed just to hold position and volume	−$77M	−$89M	−$119M	−$102M	−$96M
Owner earnings	$147M	$274M	($13M)	$106M	$3M
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	—	—	−$52M	−$73M	—
Free cash flow	$147M	$274M	($65M)	$33M	$3M
Owner-earnings marginowner earnings ÷ revenue	10%	20%	-1%	9%	0%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2024 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 3.8×

Adequate

Operating income $212M ÷ interest expense $57M

What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
How heavy is the debt, net of cash? $269M · 1.3× operating profit

Modest net debt

Cash $164M − debt $433M

What this means
Netting $164M of cash and short-term investments against $433M of debt leaves $269M owed, about 1.3× a year's operating profit (2.0× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 80d

Long (60+ days)

DSO 13 + DIO 91 − DPO 23 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 5%

Below average through the cycle

5-yr median, range -1%–10%; 10% latest = NOPAT $155M ÷ invested capital $1.6B

Industry peers: median 16%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 5 years (it ran 10% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 4%

Thin through the cycle

7-yr median margin, range -1%–20%; latest $147M = operating cash $224M − maintenance capex $77M

Industry peers: median 8%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 10% of revenue this year, a 4% median across 7 years.
Are earnings backed by cash? 1.46×

Cash-backed

Cash from ops $224M ÷ net income $153M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 165%

Returned more than it generated

Dividends + buybacks $243M ÷ Owner Earnings $147M

What this means
The company returned more than it generated: against $147M of Owner Earnings, $243M (165%) went back to shareholders, $0 dividends, $243M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 0.60×

Harvesting

Capex $77M ÷ depreciation $129M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 1 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Near

Revenue ≥ $2B · $1.4B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 2.17×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $433M vs $254M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (7-yr record) · 2 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth —

Earnings +33% over the record · —

What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.66/share (latest year $1.07), the averaged base the calculator's gate runs on, and book value is $9.45/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2018–2024

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 5 of 7

What this means
Lost money in 2 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 6 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 4% → 11% (3-yr avg ends)

What this means
Through the cycle the operating margin widened — about 4% early to 11% lately, median 9% — pricing power intact or improving.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth +40%/yr

What this means
Owner earnings grew about 40% a year over the record.
Worst year 2020 · −2.4% op. margin

What this means
Operations went underwater in 2020, understand why before trusting the good years.
Share count +5.3%/yr

What this means
The share count is rising, dilution works against you on a per-share basis.

Does AI threaten the moat?

Moderate contestability

AI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.

The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2025

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$561M

Cash & short-term investments$147M
Receivables$137M
Inventory$224M
Other current assets$53M

Current liabilities$228M

Debt due within a year$4M
Accounts payable$61M
Other current liabilities$163M

Current ratio2.45×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.47×stricter: inventory excluded

Cash ratio0.64×strictest: cash alone against what's due

Working capital$332Mthe cushion left after near-term bills

Debt due this year vs. cash$4M due · $147M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2025 balance sheet

Revenue, latest quarter vs. a year ago+8.1%the freshest read on whether the business is still growing

Current ratio, recent quarters3.3× → 2.5×

Deeper floors

Tangible book value$342Mequity stripped of goodwill & intangibles

Net current asset value($285M)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$474M$41M of it operating leases

Deferred revenue$5Mcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2018–2024

Over the record, the business generated $1.2B of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.

Reinvested$713M · 61%
Buybacks$439M · 38%
Retained (debt / cash)$8M · 1%

Returned to owners$439M
77% of the owner earnings the business produced over the span, $0 as dividends and $439M as buybacks.
Average price paid for buybacks—
Buybacks ran $439M over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count34.5%
The diluted count rose from 108M to 145M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 7-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$1.1B52% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity71%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$426Mover 7 years buying other businesses, against $713M of capital spent building

None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 7-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Mr. Singh	$5.5M	$9.1M	$106M
2022	Mr. Singh	$4.4M	$534k	($13M)
2023	Mr. Singh	$5.3M	$9.0M	$274M
2024	Mr. Singh	$6.3M	$13.4M	$147M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Inverting the record

Invert: instead of why The Azek Company Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2018–2024.

1 of the 4 tests turned up something to look into; the other 3 came back clean.

Look hereDid the share count rise anyway?34.5%
Diluted shares grew 34.5% over 2018–2024, even as the company spent $439M on buybacks. The repurchases were outrun by issuance — to staff, in a raise, or in a deal — and the filing says which; owners' slice still shrank. Read the buyback line beside this one, not on its own.

And these came back clean

Is it less profitable than it was?
Did reported profit become cash?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Containers & Packaging

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
ATRAptarGroup Inc.	$3.8B	—	12.3%	10%	8%
ENTGEntegris Inc.	$3.2B	45%	15.8%	11%	14%
WMSAdvanced Drainage Systems	$3.1B	24%	16.1%	16%	13%
AWIArmstrong World Industries Inc	$1.6B	37%	25.7%	23%	11%
AZEKThe Azek Company Inc.	$1.4B	32%	8.7%	5%	4%
MYEMyers Industries Inc.	$826M	32%	6.9%	16%	7%
SWIMLatham Group Inc.	$546M	31%	4.3%	4%	8%
KRTKarat Packaging Inc.	$468M	34%	8.9%	24%	7%
Group median	—	32%	10.6%	14%	8%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what The Azek Company Inc. has delivered.

The Azek Company Inc.’s latest year runs above its own through-cycle margin — the reported figure may flatter a peak. So the tool opens on the through-cycle base, Graham’s averaging cutting both ways; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, The Azek Company Inc. earns about $58M on its 4.0% median owner-earnings margin. This year’s 10.2% margin runs above that; the reported figure may flatter a peak you'd be paying on. Normalize, below, values the price on that through-cycle figure rather than the latest year. It comes pre-checked here for that reason, the same rule that already normalizes a trough; clear it to price the year as filed.

Base Normalize · through-cycle ($58M) Net of stock comp Steady-state · maintenance capex ($239M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’20→’24+40%/yr

Owner-earnings growth · ’18→’24+40%/yr

Owner-earnings yield—

P/E (3-yr earnings ’22–’24)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $208M on 144M shares outstanding (a weighted basic average, the only count this filer tags); net debt $286M. The base opens on the through-cycle figure (the latest year sits above the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. Capex ($108M) runs well above depreciation ($131M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $239M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh AZEK against another business →

Cite: Owner Scorecard, "The Azek Company Inc. (AZEK), the owner's record," https://ownerscorecard.com/c/AZEK, data as of 2026-07-09.

Manual order: ← AYI its page in the Manual AZO →

Industry order: ← AWI the Containers & Packaging chapter BALL →