VMC
VMCVulcan Materials Company is a leading producer of construction aggregates, primarily crushed stone, sand, and gravel, operating in the mining and quarrying industry.
As the nation's largest supplier of these essential materials, its performance is fundamentally tied to infrastructure spending and non-residential construction activity.
Updated: January 14, 2026, 16:00 EST
Investment Opinion: Should I buy VMC Today?
Of course. Here is a consolidated analysis of Vulcan Materials Company (VMC) based on your provided data.
Overall Analysis
Vulcan Materials (VMC) presents a compelling but premium-priced investment case. The company is fundamentally strong, demonstrating solid revenue growth, impressive profitability margins, and stable financial health. Its business is well-run. However, this quality comes at a steep price. The stock is technically overbought near its 52-week high, and its valuation multiples (P/E, P/S) are significantly elevated, indicating much of its future growth is already priced in. While its beta suggests volatility in line with the market, the primary risk is a valuation correction if growth fails to meet high expectations.
Buy Recommendation
VMC is a high-quality company in an essential industry, making it a worthy candidate for a long-term portfolio. However, its current valuation is demanding. A buy recommendation is contingent on an investor's conviction in the company's ability to sustainably exceed growth expectations and a tolerance for potential near-term price volatility. Investors might consider waiting for a more attractive entry point during a broader market pullback to build a position at a better risk-reward balance.
VMC 12-Month Price Forecast
RockFlow Model Forecast: Three Scenarios for 2026
Of course. Here is a 12-month strategic outlook for Vulcan Materials (VMC).
12-Month Outlook for VMC:
The outlook for VMC over the next 12 months remains fundamentally positive, driven by secular tailwinds from federal infrastructure spending. Key catalysts include consistent execution on margin expansion and strong pricing power for its essential construction aggregates. However, the primary risk is significant valuation compression; with the stock trading near all-time highs and at premium multiples, it is highly vulnerable to any macroeconomic slowdown or disappointment in quarterly earnings. Given the current elevated price, the near-term upside appears limited, and a more prudent 12-month target would be in the range of $330-$360, contingent on flawless execution and stable interest rates.
Wall Street Consensus
Most Wall Street analysts are optimistic about VMC's 12-month outlook, with consensus target around $298.48, indicating expected upside potential.
Bulls vs Bears: VMC Investment Factors
Overall, VMC has investment potential but also faces challenges. Here are key factors to weigh before investing.
Bullish
- Strong Infrastructure Demand: Benefiting from government infrastructure spending driving aggregates shipments growth
- Price Target Increases: Citigroup raised price target to $345 with maintained Buy rating
- Impressive Q3 Performance: 12% jump in aggregates shipments and 31% operating cash flow growth
- Institutional Investor Interest: Narwhal Capital Management increased position by 8.6% in Q3
- Strategic Market Position: Leading US aggregate supplier with valuable quarry locations
Bearish
- Valuation Concerns: Shares considered overvalued at current levels despite strong fundamentals
- Competitive Pressure: Multiple companies competing for infrastructure dollars in crowded market
- Lobbying Expenses: $40,000 lobbying disclosure indicates regulatory cost pressures
- Market Consolidation: Stock performance has flattened after early-year gains
- Economic Sensitivity: Construction materials sector vulnerable to economic slowdowns
VMC Technical Analysis
VMC has demonstrated robust price appreciation over the past year, approaching its 52-week high with solid recent momentum despite slightly underperforming the broader market on a relative basis over the last three months.
The stock shows strong short-term performance with a 3.93% gain over one month, though its three-month gain of 2.69% lags the market by 0.68%, reflecting modest relative underperformance despite positive absolute returns.
Currently trading at $311.04, VMC is near the peak of its 52-week range ($215.08 - $313.37), indicating the stock is technically overbought and may face significant resistance just above its current price level. Given its beta above 1, this positioning suggests elevated near-term volatility risk.
| Period | VMC Return | S&P 500 |
|---|---|---|
| 1m | +0.9% | +1.3% |
| 3m | -1.0% | +5.7% |
| 6m | +10.6% | +10.6% |
| 1y | +11.3% | +16.5% |
| ytd | +2.0% | +1.1% |
VMC Fundamental Analysis
Of course. Here is a professional financial analysis of VMC's fundamentals based on the provided data.
1. Revenue & Profitability
VMC demonstrates solid revenue growth and strong profitability. Quarterly revenue increased from $2.10 billion in Q2 to $2.28 billion in Q3, while net income rose significantly from $321 million to $379 million. The company maintains healthy margins, with a gross profit margin of 30.2% and a robust net profit margin of 16.6% in Q3, indicating effective cost control and pricing power. The diluted EPS also improved from $2.41 to $2.83 quarter-over-quarter, reflecting strong bottom-line performance.
2. Financial Health
The company's financial health appears stable, supported by a strong current ratio of 2.23, which indicates good short-term liquidity. However, the debt position is notable, with a debt-to-equity ratio of 56.4% and an interest coverage ratio of 1.85, which, while acceptable, suggests a significant portion of operating income is used for interest expenses. The cash flow to debt ratio of 0.14 indicates it would take several years to pay off debt using current operating cash flow, highlighting a reliance on refinancing or longer-term debt management.
3. Operational Efficiency
Operational efficiency is mixed, showing strengths in asset utilization but weaknesses in returns. The asset turnover ratio of 0.13 suggests the company is not generating a high level of sales relative to its asset base, which is common for capital-intensive industries. However, the return on equity (ROE) of 4.34% is relatively low, indicating that the company is not generating substantial returns for shareholders from its equity. The 46.7 days of sales outstanding points to a reasonable accounts receivable collection period, contributing to a manageable cash conversion cycle of 61.6 days.
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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1. Valuation Level
VMC's valuation appears elevated based on a TTM PE of 36.74 and a forward PE of 26.81, which suggests high earnings-based expectations despite a slight moderation ahead. The stock is also pricey on asset and sales bases, with a PB of 4.69 and a PS of 5.21, while a PEG ratio of 1.52 indicates the high PE isn't fully justified by its earnings growth rate. Furthermore, an extremely high EV/EBITDA of 66.77 signals significant overvaluation relative to its core operating profitability.
2. Peer Comparison
Without specific industry average data, a precise comparison is unavailable; however, VMC's valuation multiples are likely above typical industrial/material sector norms given its high PE and PS ratios. The elevated PEG ratio further suggests it is valued at a premium to its growth profile compared to broader market or sector peers. Investors should seek concrete industry benchmarks to confirm this relative overvaluation.
Investment Risk Disclosure
Based on its Beta of 1.064, VMC exhibits volatility risk that is slightly above the broader market, indicating it is expected to be marginally more volatile. The stock's 1-year maximum drawdown of -20.41% further confirms this risk profile, illustrating a notable potential for capital depreciation during market downturns.
Other risks appear moderate. The absence of significant short interest removes the threat of a short squeeze but does not inherently mitigate broader market or sector-specific headwinds. Liquidity is typically robust for a company of this size, though general economic cycles impacting construction and materials remain a primary consideration.
FAQs
Based on the analysis provided, my opinion on Vulcan Materials (VMC) is neutral.
Core Reasons: 1. Strong Fundamentals vs. High Valuation: The company exhibits excellent operational performance with strong shipments, cash flow growth, and profitability. However, this strength appears fully priced in, with elevated valuation metrics (P/E of 36.74, PEG of 1.52) suggesting limited near-term upside. 2. Technical Resistance: The stock is trading near its 52-week high, indicating it is technically overbought and may face significant resistance, increasing the risk of a pullback. 3. Economic Sensitivity: As a construction materials company, VMC's performance is cyclical and vulnerable to potential economic slowdowns, which could pressure its high valuation.
Suitable Investor Types: This stock may be suitable for long-term, growth-oriented investors who believe infrastructure spending will remain robust for years and are willing to accept current valuation levels for a high-quality company. It is less suited for value investors or those seeking short-term gains.
Based on the provided data, VMC stock appears overvalued.
Key valuation metrics such as its TTM PE of 36.74, forward PE of 26.81, and a PEG ratio of 1.52 are elevated, indicating the stock's price is high relative to both its current earnings and its growth rate. The extremely high EV/EBITDA of 66.77 further signals overvaluation relative to its core operating cash flow. While VMC exhibits strong profitability and revenue growth, the current multiples seem to price in overly optimistic future expectations that may not be sustainable, especially when compared to typical industrial/material sector norms.
Of course. Based on a professional analysis of the provided data, here are the key risks of holding VMC stock, ordered by importance.
1. Heightened Price Volatility and Market Sentiment Risk: The stock's Beta above 1.0 and its position near the top of its 52-week trading range indicate a high susceptibility to market downturns and increased risk of a price correction due to its current technically overbought condition. 2. Economic and Industry Cyclicality Risk: As a construction materials company, VMC's performance is inherently tied to economic cycles, where a slowdown in construction and infrastructure spending would directly impair its revenue and profitability. 3. Significant Financial Leverage Risk: The company's substantial debt load, indicated by a debt-to-equity ratio of 56.4% and a low cash flow-to-debt ratio, creates vulnerability to rising interest rates and could constrain financial flexibility during an economic downturn. 4. Operational Inefficiency Risk: The low asset turnover and Return on Equity (ROE) suggest the company is not generating optimal sales or profits from its asset and equity base, which could limit growth potential and shareholder returns relative to its capital investment.
Of course. Here is my professional forecast for Vulcan Materials (VMC) stock performance through 2026.
Vulcan Materials (VMC) Stock Forecast: 2026 Outlook
Based on a fundamental analysis of its industry-leading position and the projected tailwinds from infrastructure spending, my forecast for VMC through 2026 is positive, though tempered by macroeconomic risks.
1. Target Price Range: * Base Case (2026): $400 - $450. This assumes steady execution, mid-single-digit volume growth, and continued pricing power, leading to consistent EBITDA expansion. * Bull Case (2026): $480 - $550. This scenario requires an acceleration of public infrastructure projects, significant accretive acquisitions, and a more favorable interest rate environment that boosts valuation multiples.
2. Key Growth Drivers: * Sustained Federal Infrastructure Spending: The multi-year tailwind from legislation like the Infrastructure Investment and Jobs Act provides a predictable, public-funded demand base for VMC's core products. * Pricing Power & Margin Expansion: As the largest aggregates producer, VMC has significant pricing power in its local markets, which is crucial for offsetting cost inflation and expanding profit margins. * Urbanization & Industrial Growth: Non-residential construction and public works projects are less sensitive to interest rate fluctuations than housing, providing a stable demand foundation.
3. Main Assumptions: * The U.S. avoids a deep recession, supporting construction activity. * Interest rates stabilize or gradually decline, reducing financing costs and supporting valuation multiples. * Management continues its disciplined capital allocation focused on operational efficiency and strategic mergers & acquisitions.
4. Forecast Uncertainty: This forecast is highly sensitive to the macroeconomic climate. A severe economic downturn that halts construction, a prolonged period of high interest rates, or a significant pullback in public funding would materially impact these projections.
* Disclaimer:** This forecast is for informational purposes only and does not constitute financial advice. Stock performance is subject to numerous risks and uncertainties.