MLM

Martin Marietta is a high-quality, hard-to-replicate aggregates franchise, and the operating data shows it: FY2025 revenue grew 8.6% to $6.15B, gross profit rose 15.5% to $1.89B (margin 30.7%), and operating cash flow jumped 22.3% to $1.78B — comfortably funding $807M capex, $450M of buybacks and $197M of dividends. The balance sheet is a genuine strength: $10.0B equity against $8.68B liabilities (0.86x), long-term debt steady at $5.29B with only $30M current, and current assets of $3.19B covering $895M of current liabilities by 3.6x. This is a durable, cash-generative business that compounds through pricing on a non-discretionary, freight-protected product.

The problem is the headline earnings collapse and what it does to valuation. Net income fell 43% to $1.14B and diluted EPS dropped 42.1% to $18.77, even as gross profit rose — meaning the decline sits below the gross line (the 42% drop in operating income points to the absence of prior-year gains/divestiture items rather than a core-margin break, since gross margin actually expanded). The history confirms the lumpiness: net income ran $703M→$867M→$1.17B→$2.00B→$1.14B, so FY2024's $2.0B was the outlier, not FY2025's $1.14B. Against today's $581.23 price, P/E is 31.0 and ROE has compressed to 11.3% — a premium multiple resting on a trough-ish earnings base with no discount for the cyclicality.