EXP

Eagle Materials is a high-return, low-cost producer of cement, aggregates and gypsum wallboard serving US construction. The business throws off excellent returns — 28.7% ROE, 31.1% operating margin and 18.4% net margin — on a regional, hard-to-replicate asset base. Revenue grew 2.1% to $2.31B in FY2026, extending a steady climb from $1.86B in FY2022, and operating cash flow rose 12.0% to $614M. At 17.1x EPS of $13.16, the valuation is reasonable for a franchise of this quality.

FY2026 was a modest digestion year. Net income dipped 8.5% to $424M and EPS slipped 4.4% to $13.16 (cushioned by buybacks), as gross profit fell 3.1% on cost/volume pressure. More notably, the company invested heavily: capex more than doubled (+113.4% to $417M) and long-term debt rose 42.7% to $1.75B, lifting liabilities/equity to 1.61x while cash jumped to $298M. This points to a step-up in growth investment or acquisition, pressuring near-term returns but expanding the asset base — total assets grew 17.7% to $3.84B.