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what it is
Ferguson is the giant middleman that gets plumbing, HVAC, appliances, and infrastructure parts to contractors across North America.
how it gets paid
Last year Ferguson Ent made $12.8B in revenue.
why growth slowed
Revenue fell 58.3% last year. Housing-related categories remained under pressure, with plumbing revenues down 4% and hvac down 7%, reflecting weaker new-home construction.
what just happened
Ferguson posted a clean quarter with $2.90 EPS, well above the $2.25 consensus number.
At a glance
A balance sheet — strong enough to weather a downturn
27.6x trailing p/e — priced about right
1.4% dividend yield — cash in your pocket every quarter
21.0% return on capital — every dollar works hard here
xvary composite: 61/100 — average
What they do
Ferguson is the giant middleman that gets plumbing, HVAC, appliances, and infrastructure parts to contractors across North America.
This business wins on scale. Ferguson works with more than 36,000 suppliers and sells more than 1 million SKUs, so your contractor gets the part fast instead of losing a day on the job. Return on capital was 21.0% in the base data, which means capital efficiency → cash earned on every dollar invested → this distribution machine is better than it looks.
How they make money
$12.8B
annual revenue · revenue declined -58.3% last year
total revenue
$12.8B
58.3%
The products that matter
core job-site distribution
Plumbing & HVAC Supplies
~$30.8B snapshot revenue base
This is the center of gravity. Ferguson moves essential products to professionals who need them now, and that urgency helps support a 31.0% gross margin in a business many investors assume should be pure commodity distribution.
speed matters
infrastructure and maintenance exposure
Waterworks & MRO
$340B market backdrop
This is the infrastructure and maintenance angle. The page gives you the $340B addressable market, not revenue or profit by line. So you can see the opportunity is big, but you cannot underwrite which piece is doing the heavy lifting from this snapshot alone.
big market, thin detail
secondary geography
Canada
$1.5B · about 5% of shown revenue
Canada matters operationally, not narratively. At roughly 5% of the revenue mix shown here, it adds some breadth without changing the fact that Ferguson is still overwhelmingly a U.S. business.
small mix
Key numbers
21.0%
return on capital
Return on capital → profit earned on money invested → Ferguson turns a boring distribution model into a high-quality compounder.
27.6x
trailing p/e
P/E → price versus past earnings → you are paying up for stability in a business tied to construction demand.
30.7%
gross margin
Gross margin → profit left after product cost → Ferguson has enough pricing power and scale to defend earnings in a mixed market.
95%
u.s. exposure
Geography mix → where sales come from → this is basically a U.S. construction and repair story with a small Canada tail.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 3 — safer than 50% of stocks
- price stability 50 / 100
- long-term debt $4.0B (7% of capital)
- net profit margin 6.1% — keeps 6 cents of every dollar in revenue
- return on equity 34% — $0.34 profit for every $1 investors have put in
A — among the top-rated companies for balance sheet quality.
Total return vs. market
You invested $10,000 in FERG 3 years ago → it's now worth $18,740.
The index would have given you $14,540.
source: institutional data · total return
What just happened
beat estimates
Ferguson posted a clean quarter with $2.90 EPS, well above the $2.25 consensus number.
Revenue reached $8.2B, up 5.1% vs. prior year, while EPS rose 24%. Gross margin held at 30.7%, up 60 basis points, which is boring in the way you want.
$8.2B
revenue
$2.90
eps
30.7%
gross margin
the number that mattered
The important number was 30.7% gross margin because margin stability is what keeps a distributor from turning a soft market into an earnings problem.
-
ferguson enterprises posted solid calendar fourth-quarter 2025 results.note that the company is switching from a fiscal year to a calendar year, and as such, we have footnoted the stub period. net revenue reached $7.5 billion, driven by organic volume and contributions from bolt-on acquisitions.
-
housing-related categories remained under pressure, with plumbing revenues down 4% and hvac down 7%, reflecting weaker new-home construction.
-
gross margins expanded, aided by better procurement and economies of scale.overall, profit per share reached $2.10 in the december quarter. The near-term environment remains mixed. the housing-related businesses are likely to remain soft in calendar 2026, while nonresidential demand should partially offset this weakness. additionally, we expect growth to come from its commercial/mechanical segment, which should help build out data centers and advanced manufacturing facilities, while its waterworks activity should benefit from increased municipal infrastructure modernization projects. on the cost side, the company should improve the supply chain through automation and analytics-driven pricing tools. we estimate per-share income will reach $9.60 in 2026. Over the long haul, we think that the outlook is more mixed. more than 4,000 large capital projects have been planned through 2031, which should allow for roughly $90 billion in potential participation across ferguson's segments. these include further buildouts of data centers, semiconductor fabs, and life-science facilities, capturing market share. water infrastructure also presents a durable opportunity, as aging distribution networks require sustained public and private investment.
-
a higher top line should allow for margin expansion.overall, we project earnings per share will expand to $10.30 in 2027 and $13.25 by 2029-2031. These shares carry an average (3) outlook rank. the stock is trading near the midpoint of our 3 to 5-year target price range, suggesting limited appreciation potential.
-
the dividend yield is also subpar, though the payout has consistently increased.
source: company earnings report, 2026
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What could go wrong
The key risk is not that Ferguson is a weak business. It is that you are paying a premium price for a cyclical distributor whose economics still depend on U.S. job-site activity and holding the margin line.
med
Premium valuation on a cyclical business
FERG trades at 27.6x trailing earnings. Its 5-year average is 19.3x. You are paying a quality multiple for a distributor tied to construction and repair demand.
If growth cools or gross margin slips, the multiple can compress even if the company stays profitable.
med
U.S. concentration
About 95% of the revenue shown on this page comes from U.S. operations: $29.3B in the U.S. versus $1.5B in Canada.
That means one geography can hit most of the income statement at once. You do not have much regional diversification here.
med
Thin end-margin economics
Net profit margin is 5.5%. That is healthy for distribution, but it still leaves less room for error than higher-margin business models investors might compare it to.
Small changes in pricing, freight, labor, or product mix can move EPS more than you expect from the top line alone.
med
Limited segment profit detail
You get revenue mix, gross margin, and balance sheet data here, but not profit by business line for Waterworks, MRO, or the rest of the portfolio.
When detail is thinner, you have to trust the consolidated margin line more than you might like. That raises the importance of each earnings print.
Roughly $30.8B of revenue here is tied to construction, repair, and maintenance demand, and about 95% of the mix shown is in the U.S. The business is sturdy. The setup is less forgiving.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
gross margin first
31.0% is the line to watch. If revenue keeps growing but gross margin starts slipping, the premium multiple gets harder to defend.
calendar
next earnings report
The next report is expected in May 2026. You want to see whether sales can stay above the recent +5.0% pace without margin giving ground.
risk
u.s. demand rollover
Because about 95% of the revenue mix shown here is U.S.-based, a slowdown in residential, non-residential, or repair activity will show up fast.
trend
institutional buying streak
Institutions have been net buyers for three straight quarters. If that trend reverses while valuation stays elevated, sentiment stops helping you.
Analyst rankings
short-term outlook
average
Momentum score 3 means the stock is not flashing a strong short-term edge. In human-speak, analysts are not calling for a breakout right now.
risk profile
average
Stability score 3 means typical market risk. You are not buying a utility, but you are not buying a drama machine either.
chart momentum
top 20%
Technical score 2 signals above-average relative price strength. The chart looks better than the valuation case does.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 319 buyers vs. 296 sellers in 4q2025. total institutional holdings: 0.2B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$200
$401
$257
current price
$301
target midpoint · +17% from current · 3-5yr high: $320 (+25% · 7% ann'l return)
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The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
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