VMI · Valmont Industries
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $475.85
Note written ·
Price against the kill line
11.5% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $475.85, on record since 11 November 2026. The shares are down 16.8% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $475.85, just above the 200-day average of closes, which would show the shares leading the S&P 500. A fourth-quarter result with full-year adjusted earnings per share above the $23.75 top of guidance would also show that.
Research onlyNot in the portfolio.
Key figures from the filings · Industrials
Quarter to 26 September 2026, filed 27 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,104
- Revenue, change on a year (%)
- +5.5
- Gross margin (%)
- 30.0
- Operating margin (%)
- 15.7
- Free cash flow, four quarters ($M)
- 306
- Net cash, cash less debt ($M)
- −634
- Price to earnings (×)
- 15.6
- Enterprise value to sales (×)
- 2.0
All filed numbers
What Valmont Industries reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 1,104 | +5.5 | 30.0 | 15.7 |
| first filed | 1,119 | +6.5 | 30.5 | 14.8 |
| first filed | 1,029 | +6.2 | 30.8 | 15.1 |
| first filed | 1,038 | +0.1 | 29.8 | 11.2 |
| first filed | 1,046 | +2.5 | 30.4 | 13.5 |
| first filed | 1,051 | +1.0 | 30.6 | 2.8 |
| Pre-tax income ($M) | 163 |
| Net income ($M) four quarters: 517 | 121 |
| Diluted shares, change on a year (%) against the quarter to 27 September 2025 | −2.4 |
| Operating cash flow ($M) | 463 |
| Capital spending ($M) | 157 |
| Free cash flow ($M) | 306 |
| Cash and short-term investments ($M) | 122 |
| Debt ($M) non-current long-term debt plus current maturities | 756 |
| Net cash, cash less debt ($M) | −634 |
| Deferred revenue ($M) −19.9% on a year | 65.2 |
| Backlog, orders not yet delivered ($M) 0.0% on a year | 0.3 |
| Receivables ($M) | 652 |
| Inventory ($M) | 645 |
| Shareholders' equity ($M) | 1,760 |
| Market value ($M) | 8,056 |
| Enterprise value, market value plus net debt ($M) | 8,691 |
| Enterprise value to sales (×) | 2.0 |
| Enterprise value to operating income (×) | 14.2 |
| Price to earnings (×) | 15.6 |
| Price to book value (×) | 4.6 |
| Free-cash-flow yield (%) | 3.8 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 2.3% of shares outstanding sold short, 2.4 days of average trading to cover, +3.8% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $101K | $9.2M |
The thesis
Valmont Industries' shares are more likely to lag the S&P 500 over the next three months. Utility demand and raised 2026 earnings guidance of $22.75–$23.75 per share support the business, but the shares remain below both their 50-day and 200-day averages. The fourth-quarter report, expected around 18 February 2027, settles whether steel and zinc costs are being recovered through pricing.
The shares closed at $422.71 on 12 November 2026, up from $398.05 on 5 November 2026 and 14.5% lower than three months earlier. The 50-day average of adjusted closes was $454.86 and the 200-day average was $475.75 at that close. The move came after a quarter in which Valmont beat on profit and raised guidance (8-K, 20 October 2026), so the market is discounting something beyond the headline numbers: slower utility growth and input costs that outrun pricing. The rebound has not yet recovered either average.
Bullish and bearish views on Valmont Industries, Inc.
The bull case on Valmont Industries, Inc. (VMI), in brief: earnings guidance was raised. The bear case: sales missed the estimate.
Bull case
- Earnings guidance was raised. Valmont lifted full-year adjusted earnings per share guidance to $22.75–$23.75 from $22.25–$23.50 on 20 October 2026 (8-K). Net sales guidance of $4.30–$4.45 billion was unchanged.
- Third-quarter profit beat. Diluted earnings per share were $6.24 against $4.98 a year earlier, and operating income was $172.8 million at a 15.7% margin versus 13.5% (Valmont 8-K, 20 October 2026). Company-news coverage cited a $5.73 estimate.
- Backlog is larger. Total backlog was $2,007.8 million at 26 September 2026 against $1,653.7 million at 27 December 2025. Infrastructure backlog was $1,808.2 million (8-K, 20 October 2026).
- Utility demand is still growing. North America Utility sales rose 23.0% in the third quarter, and North America Coatings rose 13.8% (8-K, 20 October 2026).
- The dividend continues. Valmont's board declared a $0.77 quarterly dividend on 26 October 2026, payable 15 January 2027 to holders of record on 24 December 2026 (Business Wire release as reposted by OffshoreSource).
Bear case
- Sales missed the estimate. Third-quarter sales of $1.104 billion compared with a $1.117 billion estimate in company-news coverage, and total growth of 5.5% trailed the utility segment's pace.
- Utility growth is slowing. North America Utility sales rose 23.0% in the third quarter after 33.9% in the second (company releases of 20 October 2026 and 21 July 2026).
- Infrastructure margin did not expand. Infrastructure operating margin was 17.6% against 17.8% a year earlier, with Valmont citing higher steel and zinc costs and the cost of ramping utility capacity.
- Input costs are still elevated. On 24 September 2026 the chief financial officer said hot-rolled-coil steel was up about 40%, zinc about 35% and diesel about 85% year to date, with roughly a two-quarter pricing lag.
- Agriculture and telecommunications are weak. International Agriculture sales fell 25.3% in the third quarter, and North America Telecommunications volumes fell significantly (8-K, 20 October 2026).
Price setup
The shares closed at $422.71 on 12 November 2026. That is 27.8% below the 52-week intraday high of $585.71 set on 25 June 2026. The 52-week closing low is $379.21, set on 20 November 2025.
The recent range runs from a close of $398.05 on 5 November 2026 to $424.83 on 11 November 2026. The 50-day average of adjusted closes, $454.86, sits above the last close, and the 200-day average, $475.75, sits above that. Both averages are falling toward the price from above, so the shares need to clear them to show a change in direction.
The only insider filing since the report is a Form 4 for the chief accounting officer, William Eric Johnson, showing 74 shares withheld for tax at $450.68 on 20 October 2026. It is a tax withholding, not an open-market sale. Valmont filed its quarterly report on Form 10-Q on 27 October 2026.
Catalysts ahead
- 24 December 2026: Record date for Valmont's $0.77 quarterly dividend, payable on 15 January 2027. A routine payment that shows the board's confidence in cash generation; it does not settle the cost-recovery question.
- ~18 February 2027 (est.): Fourth-quarter and full-year 2026 results (date not yet confirmed by Valmont). Shows whether pricing recovered steel and zinc costs and whether the $22.75–$23.75 earnings guidance was met.
What would change the view
A daily close above $475.85, just above the 200-day average of closes, which would show the shares leading the S&P 500. A fourth-quarter result with full-year adjusted earnings per share above the $23.75 top of guidance would also show that.
What it trades with
Valmont's utility business is tied to electric-grid spending on transmission and distribution poles and structures. Its Agriculture segment depends on farmer capital spending and storm-replacement demand. Steel, zinc and diesel prices drive its costs, so industrial commodity moves affect margins with a lag of about two quarters according to the chief financial officer on 24 September 2026. Management's $6.7 billion utility project pipeline through 2029 is the company's own estimate and is not reported backlog.
The evidence, claim by claim (7)
- Third-quarter 2026 net sales were $1,103.8 million, up 5.5%; operating income was $172.8 million (15.7% margin versus 13.5%); diluted earnings per share were $6.24 versus $4.98. Valmont third-quarter 2026 results release (8-K) · as of
- Full-year adjusted diluted earnings per share guidance raised to $22.75–$23.75 from $22.25–$23.50; net sales guidance unchanged at $4.30–$4.45 billion. Valmont third-quarter 2026 results release (8-K) · as of
- Total backlog was $2,007.8 million at 26 September 2026 versus $1,653.7 million at 27 December 2025; Infrastructure backlog was $1,808.2 million. Valmont third-quarter 2026 results release (8-K) · as of
- North America Utility sales rose 23.0% in the third quarter versus 33.9% in the second; Infrastructure operating margin was 17.6% versus 17.8% a year earlier. Valmont third-quarter and second-quarter 2026 results releases · as of
- The chief financial officer said hot-rolled-coil steel was up about 40%, zinc about 35% and diesel about 85% year to date, with a roughly two-quarter pricing lag. Valmont D.A. Davidson conference transcript · as of
- Board declared a $0.77 quarterly dividend payable 15 January 2027 to holders of record on 24 December 2026. Business Wire release, reposted by OffshoreSource · as of
- Chief Accounting Officer William Eric Johnson had 74 shares withheld for tax at $450.68 on 20 October 2026. SEC Form 4 filed 22 October 2026 · as of
Sources
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