PGT Report

NASDAQ: PGTI

Current Price: $11

Recommendation

Intrinsic Value: $16

Target Price: $18

November 5, 2015

Company Overview

Industry: Building and Construction

PGT is the nation’s leading manufacturer and supplier of impact-resistant windows and doors. PGT makes windows and doors to provide protection from hurricaneforce winds, wind-borne debris, and meet regional building code standards. It also provides architectural system products, non-impact-resistant aluminum & vinyl frame windows and doors, non-glass sliding panels for porch enclosures, and commercial storefront window system and entry doors. PGT distributes these windows and doors throughout the Southeastern United States, the Gulf Coast, Coastal mid-Atlantic, the Caribbean, Central America, and Canada.

Market Cap: $587.38 M

Price Performance

BUY Key Statistics Sector: Industrials

52 Week High: $16.28 52 Week Low: $8.28 Trailing P/E: 31.65 Forward P/E: 15.22

P/S: 1.64 EV/EBITDA: 13.06 Beta: 1.49 ROE: 23.25% ROA: 11.75%

Investment Thesis

Risks

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Pricing power as an industry leader in a niche market

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Unfavorable economic conditions

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Continual vertical integration of the supply chain

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Heavy concentration of sales in Florida

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Increasing manufacturing capacity to capture sales in the growing market

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Volatile prices of raw materials

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Possibility of a dilution of brands due to the acquisition of CGI Windows and Doors, Inc.

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Slowdown or decline in remodeling and new construction markets

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Building codes and regulations for impact-resistant windows are becoming more stringent in Florida

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Hedge against raw material prices with futures contracts

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A societal need for impact-resistant windows and doors in hurricane-prone areas of the U.S.

Analysts: Zoe Knapke, Austin Boyle, Brandon Reagan, Beto Ramos, Dylan Kesterson

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