Core Insights - Ferguson Enterprises Inc. (FERG) has experienced a 42.6% increase in stock price over the past six months, outperforming the industry and S&P 500 growth rates of 19.4% and 27.5% respectively [1][8] - The company's U.S. revenues grew by 3.8% in fiscal 2025, driven by strong demand in non-residential markets, particularly in waterworks and commercial infrastructure [8][9] - Despite strong performance, concerns exist regarding high input costs, significant debt levels, and elevated valuation metrics [13][14][15] Financial Performance - FERG's stock closed at $234.83, below its 52-week high of $243.40 but above its low of $146.00, indicating solid upward momentum [4] - The company reported a 3.8% year-over-year revenue increase in fiscal 2025, with non-residential markets contributing significantly [9][10] - Revenues from commercial and civil infrastructure markets surged by 7% and 9% respectively, aiding overall growth [10] Strategic Initiatives - Ferguson has been expanding through strategic acquisitions, completing four in the fourth quarter of fiscal 2025, which contributed approximately 1% and 4.9% to U.S. and Canada sales respectively [12] - The company is witnessing healthy demand in Canada, with revenues increasing by 3.7% year over year [11] Cost and Debt Concerns - The cost of goods sold rose by 3.6% year over year to $21.3 billion, maintaining a flat percentage of net sales at 69.3% [13] - Long-term debt stood at $3.75 billion, with interest expenses increasing by 6.1% to $190 million, raising concerns about financial leverage [14] Valuation Metrics - FERG is trading at a forward P/E ratio of 21.79X, higher than the industry average of 20.81X, which may pose risks if market sentiment declines [15] - Earnings estimates for fiscal 2026 are projected at $10.59 per share, reflecting a 0.4% increase, while fiscal 2027 estimates show a slight decline of 0.5% [17]