Simpson Manufacturing Q4 Margin Improvement Tests Bullish Narratives On Earnings Quality

Simpson Manufacturing (SSD) just closed out FY 2025 with Q4 revenue of US$539.3 million and basic EPS of US$1.36, compared with Q4 2024 revenue of US$517.4 million and EPS of US$1.32. Trailing 12 month EPS came in at US$8.27 on revenue of about US$2.3 billion. Over the past year, earnings grew 7.1% as net profit margin moved from 14.4% to 14.8%, setting a backdrop where investors are likely to focus on how these steadier margins frame the latest results.

See our full analysis for Simpson Manufacturing.

With the headline numbers on the table, the next step is to see how this earnings profile lines up with the most widely held narratives around Simpson Manufacturing’s growth, risks, and profitability story.

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TTM EPS At US$8.27 Puts Q4 In Context

• Over the last twelve months, Simpson Manufacturing earned TTM basic EPS of US$8.27 on US$2.3b of revenue, compared with single quarter Q4 EPS of US$1.36 on US$539.3 million, so you are seeing one quarter that sits inside a much stronger full year picture.
• Analysts' consensus view links this steady TTM profile to product and geographic breadth, and the numbers partly back that up:
  • The past year’s 7.1% earnings growth on TTM net income of US$345.1 million lines up with the idea of resilient profitability across regions that the consensus highlights.
  • At the same time, revenue growth referenced at about 4.1% per year is slower than the broader US market cited in the data, which keeps the consensus view grounded rather than aggressively bullish on growth.

Curious how this TTM profile fits into the broader story on construction materials and software mix for Simpson Manufacturing? 📊 Read the full Simpson Manufacturing Consensus Narrative.

Margins At 14.8% Test The Bullish Case

• Net profit margin over the last 12 months sits at 14.8%, up from 14.4% a year earlier, with TTM net income at US$345.1 million on US$2.3b of revenue, so the business is converting a similar slice of sales into profit while it grows.
• Consensus narrative talks up margin expansion from product leadership and automation, and the margin data gives a mixed picture against that:
  • The move from 14.4% to 14.8% TTM margin fits with the idea that higher value connectors and software supported profitability, in line with comments about higher margin project work.
  • However, earnings growth of 7.1% sitting only modestly above the roughly 4.1% revenue trend leaves some room between the bullish hope for stronger margin gains and what the trailing numbers currently show.

P/E Premium And DCF Fair Value Gap

• At a share price of US$205.89, Simpson Manufacturing trades on a trailing P/E of 24.7x versus the US Building industry average of 23.8x and a DCF fair value in the dataset of US$169.23, so the stock price is above that DCF estimate while still below the peer group P/E of 44.9x.
• Investors with a more cautious, quasi bearish tilt often point to that valuation tension, and the data gives them some support alongside pushback:
  • The gap between the current price of US$205.89 and the DCF fair value of US$169.23 backs the concern that cash flow expectations may already be fully reflected or more in the valuation.
  • On the other hand, a 24.7x P/E that is only slightly higher than the 23.8x industry average, while TTM earnings grew 7.1%, means the multiple is not extreme relative to building peers, which challenges the idea that the stock is priced far out of line with its sector.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Simpson Manufacturing on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

See the numbers in a different light? Take a couple of minutes to turn that view into your own narrative and share it with the community, Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Simpson Manufacturing.

See What Else Is Out There

Simpson Manufacturing shows only modest earnings growth versus revenue and a share price that sits above the DCF fair value estimate, which may limit upside appeal.

If that valuation tension makes you cautious about paying up for growth, take a moment to scan our 52 high quality undervalued stocks that aim to pair stronger value with solid fundamentals right now.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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