Summit Materials, Inc. (SUM) Stock Valuation — PE Analysis
Construction Materials · NYSE
Current Price
$52.49
PE Ratio (TTM)
21.9x
Intrinsic Value
$97.28
+46.0% margin of safety
COMPETITIVE MOAT
↑Geographic Concentration
Summit Materials operates in specific, often less competitive, geographic regions. This allows them to establish strong local market positions and pricing power.
↑Integrated Supply Chain
Owning quarries and production facilities provides control over raw material sourcing and production costs. This integration offers a cost advantage over competitors reliant on external suppliers.
↑Long-Term Customer Relationships
The company builds enduring relationships with contractors and developers through reliable supply and service. This fosters repeat business and a stable demand base.
INVESTMENT RISKS
↓Cyclical Industry Demand
Construction activity is highly sensitive to economic cycles and interest rates. Downturns can significantly reduce demand for Summit's products.
↓Regulatory and Environmental Hurdles
Operating quarries and production facilities involves stringent environmental regulations and permitting processes. Changes in these can impact operations and costs.
↓Commodity Price Volatility
Fluctuations in the cost of key inputs like fuel and asphalt binder can directly affect profitability. The recent royalty acquisition suggests a move to diversify revenue streams, but core operations remain exposed.
Base case
SUM base case PE valuation
A base case PE valuation for SUM estimates a fair value of about $97.28 per share, against a current price of $52.49. The model assumes 20.0% annual earnings growth, a 22x target PE multiple, and a 10% discount rate.
Intrinsic Value
$97.28
Margin of safety
+46.0%
Expected annual return
+13.1%
Base case assumptions: 20.0% annual earnings growth, 22x 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.
Customize the SUM PE valuation
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 SUMCompany Overview
Summit 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.
Financial Metrics — SUM PE Stock Valuation Data
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
Frequently Asked Questions
What is the PE ratio of SUM?
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.
Is SUM overvalued based on PE ratio?
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.
How do I value SUM stock using PE ratio?
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.
What is the PEG ratio of SUM?
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.
Should I use PE ratio or DCF for SUM stock valuation?
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.
Learn More
- See SUM DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Basic Materials valuationsP/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.