Why James Hardie Stock Popped Today

Home construction materials-maker James Hardie (NYSE: JHX) stock -- of "Hardie Plank" siding fame -- soared more than 11% in early trading Tuesday despite reporting rather weak financial results last night.

Analysts forecast Hardie to report a $0.25 per share fiscal Q2 2026 profit on sales of $1.28 billion. Hardie eked out a sales beat with $1.29 billion in revenue, but reported $0.10 per share in losses.

The stock is still up 7% as of 10:55 a.m. ET.

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James Hardie Q2 earnings

CEO Aaron Erter called Q2 2026 "challenging," noting organic sales declined 1% year over year. However, the company's acquisition of decking- and trim-maker AZEK in July is paying off, resulting in a 34% net gain in sales with the new revenue stream factored in.

Indeed, Erter said AZEK is already "surpassing our expectations" and the company is making "solid progress bringing the two companies together." Still, the costs of integration are apparent in Hardie's steep decline in operating profit margin, from 15.9% to 1.9%.

On the bottom line, Hardie reported $0.26 adjusted profit (which may mean the company "beat" earnings if analyst forecast non-GAAP earnings). However, the company reported a $0.10 per share net loss as earnings are calculated according to generally accepted accounting principles (GAAP).

Is James Hardie stock a buy?

Investors today seem of the opinion that Hardie did in fact beat earnings. They're also probably encouraged by management's guidance for the year, which is ahead of Wall Street forecasts, with raised sales expectations and $200 million in positive free cash flow.

Personally, I'd be more cautious. $200 million FCF on a stock costing nearly $9.7 billion works out to a price-to-free cash flow ratio of more than 47.

Quite expensive even for the maker of Hardie Plank.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.