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What this page is: Delvantic's full research page for Ferguson Enterprises Inc (FERG) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-09-11): Designation Low · Gem Score -25 (−100…+100 Quality+Value blend) · Quality 46 · Value -73 · Sentiment 25 (timing only, not weighted) · Composite fair value $143.41 vs $244.47 at analysis
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Ferguson Enterprises Inc
FERG NYSEFerguson Enterprises Inc is a North American value-added distributor of building systems and related products serving specialized professionals in residential and non-residential construction markets. Headquartered in Newport News, Virginia, Ferguson focuses on essential water and air solutions, supplying a broad range of plumbing, pipe, valves and fittings, heating, ventilation and air conditioning, appliances, lighting, and water and wastewater products to professional contractors, builders, remodelers, utilities, facility managers, and infrastructure specialists. The company plays a central role in repair, maintenance and improvement as well as new construction projects by combining product availability with technical expertise, logistics support, and customized services such as fabrication, kitting, and project coordination. Ferguson distributes through an integrated network of branches, distribution centers, residential showrooms, counter service, sales associates, and e-commerce channels across the United States and Canada, making it a key intermediary between manufacturers and trade professionals in the construction and building services ecosystem. Founded in 1953 and headquartered in Newport News, Virginia, it operates today as one of the largest specialized distributors in its sector.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 9.32
Total Equity: $5.86B
Shares: 199,200,000
Total Debt: $4.13B
Cash: $557.00M
EBITDA: $2.98B
Total Debt: $4.13B
Cash: $557.00M
Revenue: $30.76B
Revenue: $30.76B
Revenue: $30.76B
Total Equity: $5.86B
Tax Rate: 23.4%
Equity: $5.86B
Total Debt: $4.13B
Cash: $557.00M
Current Liabilities: $5.13B
Long-Term Debt: $3.98B
Total Debt: $4.13B
Total Equity: $5.86B
Shares: 199,200,000
Shares: 199,200,000
CapEx: -$305.00M
Shares: 199,200,000
Stock Price: $244.47
Net Income: $1.86B
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 19, 2026 6:46am (74d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $28.6B | $29.7B | $29.6B | $30.8B |
| Cost of Revenue | $19.8B | $20.7B | $20.6B | $21.3B |
| Gross Profit | $8.8B | $9.0B | $9.1B | $9.4B |
| Operating Expenses | $5.9B | $6.4B | $6.4B | $6.8B |
| Operating Income | $2.8B | $2.7B | $2.7B | $2.6B |
| Net Income | $2.1B | $1.9B | $1.7B | $1.9B |
| EBITDA | $3.1B | $3.0B | $3.0B | $3.0B |
| EPS | $9.75 | $9.15 | $8.55 | $9.33 |
| EPS (Diluted) | $9.69 | $9.12 | $8.53 | $9.32 |
Balance Sheet (Annual)
Last updated: Aug 19, 2026 12:23am (74d ago)| Metric | 2022 | 2023 | 2024 | 2025 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $771.0M | $601.0M | $571.0M | $674.0M | $557.0M |
| Total Current Assets | — | $9.1B | $9.4B | $10.1B | $9.5B |
| Total Assets | — | $16.0B | $16.6B | $17.7B | $17.2B |
| Current Liabilities | — | $5.4B | $5.2B | $6.0B | $5.1B |
| Long-Term Debt | — | $3.7B | $3.8B | $3.8B | $4.0B |
| Total Liabilities | — | $11.0B | $11.0B | $11.9B | $11.3B |
| Total Equity | $4.7B | $5.0B | $5.6B | $5.8B | $5.9B |
| Retained Earnings | — | $8.6B | $9.6B | $6.8B | $7.2B |
Cash Flow (Annual)
Last updated: Aug 19, 2026 6:46am (74d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Operating Cash Flow | $1.1B | $2.7B | $1.9B | $1.9B |
| Capital Expenditure | -$290.0M | -$441.0M | -$372.0M | -$305.0M |
| Free Cash Flow | $859.0M | $2.3B | $1.5B | $1.6B |
| Acquisitions (net) | -$650.0M | -$616.0M | -$260.0M | -$301.0M |
| Net Debt Issued / (Repaid) | $1.4B | -$155.0M | $145.0M | $221.0M |
| Dividends Paid | -$538.0M | -$711.0M | -$784.0M | -$489.0M |
| Stock Buybacks | -$1.5B | -$908.0M | -$634.0M | -$948.0M |
| Net Change in Cash | — | — | — | — |
Growth Trends (YoY %)
Last updated: Aug 19, 2026 6:46am (74d ago)| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue Growth | +4.1% | -0.3% | +3.8% |
| Gross Profit Growth | +3.1% | +0.3% | +4.2% |
| Operating Income Growth | -5.7% | -0.3% | -1.7% |
| Net Income Growth | -11.0% | -8.2% | +7.0% |
| EBITDA Growth | -4.5% | +0.2% | -0.3% |
Dividend History (Last 20)
Last updated: Aug 12, 2026 10:15am (81d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-05-15 | $0.89 | — | — | — |
| 2026-03-06 | $0.89 | — | — | — |
| 2026-01-02 | $0.89 | — | — | — |
| 2025-09-26 | $0.83 | — | — | — |
| 2025-06-20 | $0.83 | — | — | — |
| 2025-03-21 | $0.83 | — | — | — |
| 2024-12-20 | $0.83 | — | — | — |
| 2024-09-27 | $0.79 | — | — | — |
| 2024-06-14 | $0.79 | — | — | — |
| 2024-03-14 | $0.79 | — | — | — |
| 2023-12-14 | $0.79 | — | — | — |
| 2023-10-05 | $0.75 | — | — | — |
| 2023-06-15 | $0.75 | — | — | — |
| 2023-03-16 | $0.75 | — | — | — |
| 2022-12-15 | $0.75 | — | — | — |
| 2022-10-27 | $1.91 | — | — | — |
| 2022-03-24 | $0.84 | — | — | — |
| 2021-10-28 | $1.67 | — | — | — |
| 2021-03-25 | $1.80 | — | — | — |
| 2020-11-12 | $2.08 | — | — | — |
Deep Analysis
Risk : Reward — upside vs downside from this company's own quarters
Computed 2026-09-06 19:10A +1σ run of quarters pays -52%; a −1σ run costs 68%. Ratio -0.8:1 (μ 3.9%, σ 3.8% floored by sector, 6 pairs).
Older method (repeat-worst-quarter): -0.6 : 1
| Case | Growth | Margin | Fair value | vs price ($244.47) |
|---|---|---|---|---|
| Bull — recovery | +5% | 10.9% | $158.38 | -35% |
| Base — stabilizes | +3% | 9.5% | $132.04 | -46% |
| Bear — keeps slipping | +2% | 8.1% | $108.08 | -56% |
| Stress — last quarter repeats | +5% | 6.6% | $98.91 | -60% |
| Upside — a +1σ run of quarters (v2) | +8% | 7.1% | $117.10 | -52% |
| Stress — a −1σ run of quarters (v2) | +0% | 5.8% | $77.43 | -68% |
Narrative Economics
market-narrative step).
Growth Outlook
Analyzed 2026-08-19 09:59The question every valuation on this page silently assumes: is this company likely to grow? Judged forward — the business, its category, the world — against what's already printed.
Claude Reading
Looking at the raw quarterly cadence first: FERG printed $8.75B / $8.36B / $8.17B / $7.77B for the four comparable fiscal-Q4-equivalent quarters, roughly 4-5% top-line growth with margin recovery from a 4% NI margin trough in Jan-2025 to 7.6% most recently. That's a cyclical bottoming, not a breakout. Annual revenue has crept from $28.57B (FY22) to $30.76B (FY25) — a 2.5% CAGR — while operating income has actually *declined* from $2.82B to $2.61B. Net income $1.86B on a $47.3B market cap = 2.5x sales / 25x earnings for a distributor whose op income is lower than it was three years ago. ROE of 31.8% and ROIC of 21.4% are genuinely impressive, but that's leveraged (D/E 0.71, equity only $5.86B) and reflects buyback-shrunken denominator as much as operating excellence. FCF of $1.60B against a $47B cap is a 3.4% yield — thin for a cyclical.
The synthesis pegs fair value at ~$174 implying ~29% downside, and the thesis engine's reverse-DCF says the market is pricing 28% FCF CAGR for five years. I broadly agree with the direction but the magnitude deserves scrutiny. The 28% implied growth number is almost certainly wrong as stated — that would require a specific set of terminal-value and discount-rate assumptions, and reverse-DCFs are notoriously sensitive. A more defensible framing: FERG on a normalized ~7% net margin against $32B run-rate revenue = ~$2.24B NI, at a defensible 18-20x mature-distributor multiple = $40-45B fair market cap, or roughly $205-230/share. So I think fair value is closer to $210 than $174 — the synthesis is too bearish, but the stock is still 10-15% rich, not 29%.
The market-forces module claims "collapsing FCF and market share loss" — I want to push back. FCF CAGR of -16% is real but is measured from a COVID-era peak when working capital unwound favorably; the $1.60B most recent print isn't "collapsing," it's normalizing. And there's no evidence in this file of actual share loss vs. WSO or POOL — that's an assertion, not a data point. Where I *do* agree with the bear synthesis: the multiple expansion from ~17x historical to 26x today is doing all the work, and it happened during a period when operating income went sideways. That's not a fundamentals story, that's a re-rating that needs justification the numbers don't provide. The insider data is useless — award grants only, no open-market buying or selling to read. A contrarian would argue: (1) FERG is the highest-quality name in a consolidating fragmented industry and deserves a scarcity premium; (2) once residential R&R inflects with rate cuts, the 8% op margin can push to 9-10% given fixed-cost leverage, driving a 20%+ EPS surprise; (3) the Nasdaq listing move and index inclusion demand provides a structural bid. These are real, but they're already in the price.
GPT Reading
Ferguson looks like an excellent business priced like a better one. The operating record is real: annual revenue has held around $29-31B for four years, gross margin has stayed remarkably steady near 30.5%-30.7%, operating income has remained above $2.6B, and free cash flow of $1.60B on $30.76B of sales is healthy for a distributor. The latest quarterly run-rate also shows the business is not broken. June 2026 revenue of $8.75B was up about 4.7% versus $8.36B a year earlier, and net income of $666M was up about 5.0%, with margin flat at 7.6%. March 2026 was stronger too, with revenue up roughly 3.6% and net income up about 20% from the comparable 2025 quarter. That is the picture of a resilient, share-taking, well-managed distributor in choppy end markets. But resilience is not the same thing as growth worthy of 26x earnings and 17.5x EBITDA.
What stands out most is the mismatch between valuation and the actual medium-term growth record. Revenue was $28.57B in 2022 and $30.76B in 2025, a cumulative gain of only 7.7% over three years. Net income went the other way, from $2.12B in 2022 to $1.86B in 2025, down about 12%. Even the recent quarterly sequence shows cyclical bounce rather than a structurally faster earnings algorithm: quarterly net margins oscillate between 4.0% and 7.6%, which is fine, but not evidence of a software-like rerating. On the balance sheet, debt of $4.13B against only $557M of cash is manageable, not alarming, yet it also means the equity story is not being driven by excess net cash optionality. Return metrics are strong — 31.8% ROE and 21.4% ROIC — but the very high 8.35x book multiple tells you the market already capitalizes that quality heavily. For a distributor with low-single-digit sales growth, an 8.5% operating margin, and 6% net margin, 1.58x sales is rich.
The easiest way to frame the stock is that the market is paying a premium for durability and hoping to forget cyclicality. I do not think that works from $244.47. If I annualize the last four reported quarters roughly, earnings power looks around $2.0B-$2.1B, so the multiple is still in the low- to mid-20s on a business whose annual revenue CAGR is under 2% and whose FCF has not compounded in the right direction. Free cash flow of $1.60B implies an FCF yield of only about 3.4% on the current market cap. That is too thin for a housing- and construction-linked distributor unless one believes a clear acceleration is coming. The raw data instead says Ferguson is very good at preserving margin through the cycle, not escaping the cycle. I can justify a premium to ordinary industrial distribution comps because the company is operationally better than average, but not this much premium. My fair value is closer to 18x-20x sustainable earnings, which points more toward $185-$210 than $245.
The best case against my view is that I may be underestimating how valuable consistency is in this category. Gross margin barely moved through multiple years of inflation and demand volatility. Operating income in 2025 at $2.61B was essentially flat with 2024 and 2023 despite uneven housing and construction conditions, and the latest quarters suggest earnings are reaccelerating off softer comparisons. If June quarter net income can grow 5% with flat margin and March quarter net income can grow 20%, a bull can argue Ferguson is emerging from a cyclical trough with share gains intact. On that reading, the stock deserves to trade less like a commodity distributor and more like a compounder with a long runway in a fragmented market. I weigh that argument less heavily because the actual multiyear evidence still shows a business that compounds quality more than it compounds dollars: excellent returns, yes; materially higher earnings base, no.
What would change my mind is straightforward. If the next 2-3 quarters show revenue sustaining at 6%-8% growth with net margins holding at 7%+ and annualized net income moving decisively above the prior peak — say toward $2.3B-$2.5B — then the current multiple would start to look less stretched because the earnings base would finally be catching up to the narrative. I would also revisit the bear case if free cash flow rose back above $2.0B without working-capital distortions, proving the current 3%-4% FCF yield is temporarily depressed rather than structurally mediocre. Absent that, this is a premium-quality distributor priced for a level of growth the reported numbers still do not show.
Grok Reading
Ferguson’s numbers describe a high-quality but slow-growth industrial distributor that the market has decided to treat like a structural compounder. Annual revenue crawled from $28.57B in 2022 to $30.76B in 2025 — a 1.7% CAGR — while net income slipped from a $2.12B peak to $1.86B, producing a negative earnings CAGR of roughly 1%. Free cash flow of $1.60B on $1.91B of operating cash is still healthy in absolute terms, but the −16% FCF CAGR is the clearest quantitative red flag: cash conversion is eroding even as the top line barely inches higher. Gross margin holds near 30.7% and operating margin near 8.5%, confirming pricing power and cost discipline, yet neither is expanding. Against that backdrop a 26.2× P/E, 17.5× EV/EBITDA and 8.35× P/B look disconnected; the reverse math implied by the current $244 price requires something like mid-to-high-20s percent annual FCF growth for years — a trajectory that has zero precedent in the last four reported years. Recent quarters show modest sequential lift (latest quarter $8.75B revenue, 7.6% net margin, +3.8% revenue and +7% earnings year-over-year), but that is cyclical bounce, not the structural re-rating the multiple already embeds.
The balance sheet and returns keep the story from being a pure short. Debt of $4.13B against $557M cash and $5.86B equity (D/E 0.71) is manageable for a distributor, ROE of 31.8% and ROIC of 21.4% are excellent, and the company still throws off more than $1.5B of free cash after modest $305M capex. Those returns justify a premium to a commodity wholesaler. They do not justify paying 50% above the historical industrial-distributor band or 40% above a DCF anchored near $174. The narrative layer — R&R resilience, fragmented-market share gains, digital scale — is doing almost all of the heavy lifting between ~$175 intrinsic and $244 market. Insider filings are pure award noise; they add nothing.
The strongest counter-case is straightforward: if residential repair-and-remodel really is counter-cyclical and Ferguson continues to take share in a $1T-plus construction TAM, then stable 30% gross margins plus even 150–200 bp of operating-margin expansion over a multi-year cycle could grow earnings at high-single to low-double digits and make 22–24× a defensible multiple rather than a bubble. A smart opponent would also note that $1.60B of FCF still covers the modest 1.4% dividend and leaves dry powder for bolt-on M&A, and that ROIC above 20% is rare in distribution. I weigh that less heavily because the multi-year track record already includes the period when those share-gain and mix theses were supposed to be working; revenue still compounded at under 2% and FCF declined. Until the income statement actually prints the acceleration the narrative assumes, the premium is hope.
What flips the view is concrete: two consecutive quarters of mid-single-digit organic revenue growth with operating margin above 9%, or a clear FCF inflection that reverses the −16% CAGR and pushes trailing FCF toward $2B+. Conversely, a housing-driven revenue decline that pushes net margin back under 5% or another year of flat-to-down FCF would confirm the multiple compression already priced into the $174 fair-value cluster.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
Ferguson runs a mature, cash-generative distribution business: revenue grew from $28.57B (2022) to $30.76B (2025), gross margin held remarkably steady in a tight 30.4-30.7% band, and FCF averaged roughly $1.6B annually with OCF/NI of 1.02x confirming that reported earnings convert to cash. Earnings-quality checks are clean across the board — Beneish M of -2.63, Altman Z of 5.7 (safe zone), and near-zero accruals — with no mechanical red flags. The classification as a mature_earner fits: this is a scale distributor executing rather than growing rapidly. Capital allocation looks shareholder-friendly. Diluted shares fell from 218.9M to 199.2M (a -3.1% CAGR), SBC is a trivial 0.1% of revenue, and buybacks run at 2181% of SBC — genuine per-share value concentration, not optical buybacks masking dilution. The soft spots are real but contained: operating margin has drifted down each year from 9.9% (2022) to 8.5% (2025), net income in 2025 ($1.86B) still trails 2022 ($2.12B) despite ~$2B more revenue, and the balance sheet carries $3.57B net debt against just $557M cash (1.2% of market cap), so liquidity is a constraint rather than a cushion. Insider tape shows only routine equity awards — no directional signal either way.
Verify before trusting this (5)
- Whether the OpM decline reflects mix shift, cost inflation, or acquisition integration — check segment detail and MD and A in the 10-K.
- Debt maturity schedule and covenant headroom given $3.57B net debt.
- Customer/end-market concentration (residential vs commercial construction exposure).
- Whether the buyback pace can be sustained alongside debt service and any M and A pipeline.
- Acquisition accounting and any goodwill/intangible balances that could mask organic trends.
The e2e composite lands at $175.68 and the signal-adjusted FV at $173.74, implying about -29% downside from the $244.47 price. The cash-flow-grounded methods are tougher still: DCF at $116.50 and EPV floor at $94.81 both say the current earnings stream, capitalized soberly, supports well under $200. The only method that justifies today's tape is anchored P/E at $374.92, which is essentially a momentum/multiple echo and I discount it heavily given operating margins have slid 140 bps over four years and 2025 net income still trails 2022. Quality is genuinely strong, which earns a premium to EPV/DCF - but not a ~40% premium on top of it.
Verify before trusting this (4)
- Organic revenue growth trajectory next 2 quarters and R&R vs new-construction mix
- Whether operating margin has actually inflected higher or continues the 140 bps slide
- Buyback pace and net debt trajectory - a levered buyback masking soft ops would be a red flag
- Management guidance on price/cost spread and private-label penetration
The dominant non-fundamental force on FERG right now is the S&P 500 inclusion event from late July/early August, which triggered mechanical index-fund buying and a visible sentiment halo (two up-moves of 6.7% and 3.5% tied directly to the inclusion). That is a real, persistent bid that typically lingers for weeks as passive rebalancing completes and active managers benchmark against the new constituent. Layered on top is a mildly risk-on tape (regime +25, VIX 15.8) that is friendly to a beta-1.12 industrial distributor without being decisive. Macro is neutral - 10y at 4.72% is not actively punishing housing-adjacent names, and there is no acute rates or credit stress hitting this cohort. The narrative is a steady-compounder story of moderate intensity and moderate durability - not a cult, not fading, just quietly working. That is the kind of backdrop that lets index-inclusion flows dominate the tape rather than get overwhelmed by macro noise. The offsets are real but smaller: the August 11 debt offering drew a 4.6% negative reaction, showing the market is sensitive to leverage narrative even after a beat-and-raise, and the bear framing (40% premium to intrinsic, cyclical distributor dressed as a compounder) is a latent headwind that would activate if housing data cracks or R&R momentum stalls. Analyst tone is not flagged as hostile. Net: a modest, near-term tailwind driven by mechanical flows and a friendly regime, with a fragile-narrative tail risk sitting underneath.
Verify before trusting this (5)
- How long index-inclusion demand persists - watch for flow exhaustion 4-8 weeks post-inclusion
- Housing starts, existing home sales, and R&R proxies - any softening activates the bear narrative
- Any follow-on debt or M&A announcements that reinforce the leverage concern from Aug 11
- Sell-side target revisions post-inclusion and post-notes offering - tone shift would flip the read
- Sector rotation into or out of housing-adjacent industrials
The world Ferguson sells into is bifurcated. Rate-sensitive residential — turnover-driven remodels, new builds — is flat to soft with the 10y near 4.7% and a neutral, non-stimulative macro backdrop; that half of the mix grows at inflation at best. The non-discretionary half is stronger: aging municipal water and wastewater infrastructure carries multi-decade replacement obligations funded by rates and federal programs, and mechanical/HVAC content per building is rising with electrification and data-center cooling density. Ferguson's product set — water and air — sits on the right side of both those secular lines, and its business is largely un-disintermediable because the value is same-day local availability, technical spec support and credit to contractors, not catalog access. AI and e-commerce erode information rents in distribution but not physical fulfillment for a plumber standing on a job site. Net: a durable, essential, low-growth franchise in a mature category that the world will keep needing, with cyclical amplitude around a low-single-digit real trend.
When we made this prediction on Aug 19, 2026, FERG was $244.45. We expect it to be $212.00 by Feb 2027, and we consider it great value under $190.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Aug 19, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.
Post-Report Due Diligence NOTES
Evidence for a closer look, not a verdict — no score or designation on this page has been changed by it. Items marked material are ones where a conclusion above moves to the other side of the price.
trailing_eps
flips down 10%
adjusted_pe
flips down 10%