Construction Materials · NYSE
Current Price
$52.49
PE Ratio (TTM)
21.9x
Intrinsic Value
$55.49
+5.4% margin of safety
COMPETITIVE MOAT
↑Geographic Density & Scale
Summit Materials benefits from strategically located, dense networks of quarries and production facilities. This local presence minimizes transportation costs, a significant factor in construction materials.
↑Customer Relationships & Reputation
Long-standing relationships with contractors and developers, built on reliability and quality, create sticky demand. A strong reputation for consistent product delivery is crucial in this industry.
↑Capital Intensity & Barriers to Entry
Establishing new, large-scale aggregate quarries and asphalt plants requires substantial capital investment and lengthy permitting processes. This deters new entrants and protects existing players.
INVESTMENT RISKS
↓Economic Sensitivity & Construction Cycles
Demand for construction materials is highly cyclical and tied to broader economic conditions and infrastructure spending. Downturns can lead to reduced volumes and pricing pressure.
↓Operational & Safety Incidents
Quarrying and production operations carry inherent risks of accidents and equipment failures. Such incidents can lead to production disruptions, increased costs, and reputational damage.
↓Competition from Larger Players
Summit Materials faces competition from larger, more diversified construction material companies with greater scale and resources. These competitors can exert significant pricing power.
Base case
At a current price of $52.49, the base case PE valuation puts SUM fair value near $55.49 per share. That figure assumes 6.5% yearly earnings growth, a target PE multiple of 21.87x, and a 10% discount rate.
Intrinsic Value
$55.49
Margin of safety
+5.4%
Expected annual return
+1.1%
Base case assumptions: 6.5% annual earnings growth, 21.87x target PE, 10% discount rate, 5 year projection. Data as of 2025-02-10.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Summit Materials, Inc. respond.
Open PE Calculator for SUMSummit Materials, Inc. is a prominent provider of essential construction materials and related downstream products, serving a diverse clientele across public infrastructure, residential development, and commercial construction sectors through its network of subsidiaries. The company organizes its business into three main operating divisions: West, East, and Cement. Its comprehensive product line includes aggregates, cement, ready-mix concrete, asphalt paving mixtures, various concrete goods, and plastic components. Beyond manufacturing, Summit Materials also delivers asphalt paving services and related support to both private and governmental infrastructure projects. The firm further diversifies its operations by managing landfills for municipal, construction, and demolition waste, as well as operating terminals for liquid asphalt. Established in 2009, the company is headquartered in Denver, Colorado, with an operational footprint spanning the United States and British Columbia, Canada.
PE Ratio (TTM)
21.9x
PEG Ratio
n/m
Earnings Yield
4.57%
ROE (TTM)
13.3%
Revenue/Share (TTM)
$22.00
Debt/Equity
1.02x
The trailing twelve-month PE ratio of SUM reflects how much investors pay per dollar of Summit Materials, Inc.'s earnings. This metric is most useful when compared to Construction Materials peers and the company's own historical range.
SUM's PE of 21.9x combined with a PEG ratio of -0.32 provides a growth-adjusted perspective. SUM has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Construction Materials, a DCF analysis may be more appropriate.
To value Summit Materials, Inc. using PE: (1) Compare the current PE (21.9x) against the Construction Materials median to assess relative pricing, (2) check the PEG ratio (-0.32) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
SUM's PEG ratio is -0.32, calculated by dividing the PE ratio (21.9x) by the expected earnings growth rate. Because SUM has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
PE ratio gives a quick relative read — how SUM is priced versus Construction Materials peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
P/E and DCF value SUM with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2025-02-10. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.