Here's Why Investors Should Buy Armstrong Stock Right Now

Armstrong World Industries, Inc. AWI is benefiting from strong growth across both its Mineral Fiber and Architectural Specialties segments, supported by favorable pricing, productivity gains and the successful integration of acquisitions such as 3form and Zahner. Innovation remains a key driver, with the TEMPLOK energy-saving ceiling line and digital platforms like ProjectWorks and Kanopi expanding customer reach and specification opportunities. Also, margin expansion — driven by operational leverage and manufacturing productivity — remains a key tailwind.

Shares of this global producer and designer of interior and exterior architectural applications have rallied 37.5% year to date, outperforming the Zacks Building Products - Miscellaneous industry’s 1.3% growth. Its earnings per share (EPS) topped the Zacks Consensus Estimate in all the trailing four quarters, the average being 9.9%.
 
Currently, Armstrong World has had its 2025 EPS estimate revised upward to $7.26 per share from $7.03 over the past 60 days. Although lingering inflation pressures and tariff-related risks are concerning, the company’s organic and inorganic strategies have been driving growth. 

Let’s delve into the major driving factors.

Factors Fueling Growth of AWI Stock

Acquisition: Acquisitions continue to be a fundamental driver of Armstrong's growth strategy, helping to expand organically and strengthen its product line. In 2024, the company successfully acquired two architectural solutions companies — Zahner and 3form. Both of them have exceeded expectations by contributing significantly to Architectural Specialties and speeding up market penetration. With the segment seeing double-digit growth and extending AWI's reach into specialty walls, exterior facades and rain screens, the integration of both businesses is proceeding as planned.

Looking ahead, AWI expects to continue with more bolt-on acquisitions for further expansion. It is focused on opportunities that will add to its current offerings and strengthen its position in the construction industry.
 
Digitalization & Technology Efforts: Armstrong is committed to improving technology and implementing digitalization efforts. Kanopi's cost-effective digital initiative has generated new demand for its products, resulting in its contribution to EBITDA growth for the Mineral Fiber segment business. Additionally, the company is committed to maximizing the efficiency of the project design process with its automated design service, Project Works.

Focus on Cost-Control Initiatives: In second-quarter 2025, Armstrong’s net sales rose 16% year over year, while adjusted EPS increased 29%. Adjusted EBITDA grew 23%, and the adjusted EBITDA margin expanded by 200 basis points (bps) to 36%.

Segment-wise, the Mineral Fiber segment witnessed a 350 bps year-over-year EBITDA margin expansion, marking one of the strongest quarterly margin performances since the 2016 separation from the flooring business. For the Architectural Specialties segment, the adjusted EBITDA margin of approximately 22% in the quarter was the highest quarterly margin of any quarter since the third quarter of 2020.

This significant profitability improvement highlights Armstrong’s resilient operating model, disciplined cost control and ability to drive efficiency even in uncertain market conditions.
 
Investment in New Products: Armstrong continues to strengthen its portfolio through product innovation and sustainability-driven initiatives. In the second quarter of 2025, the company expanded its industry scope with the latest innovation for energy-saving ceilings —TEMPLOK. This move improved building efficiency and supported customers’ decarbonization goals. These offerings, combined with ongoing investments in digital tools and design-focused solutions, are driving strong growth across both the Mineral Fiber and Architectural Specialties segments. Management emphasized that innovation remains a core growth driver, reinforcing Armstrong’s competitive advantage and positioning the company for sustained demand.
 
Higher ROE: Armstrong’s trailing 12-month return on equity (ROE) is indicative of its growth potential. The company’s ROE of 39.8% compares favorably with the industry’s 15.2%, which signals more efficiency in using shareholders’ funds than peers.

AWI’s Zacks Rank & Other Key Picks

Currently, Armstrong flaunts a Zacks Rank #1 (Strong Buy).

Other top-ranked stocks from the Construction sector are Everus Construction Group Inc. ECG, Tutor Perini Corporation TPC and Great Lakes Dredge & Dock Corporation GLDD.

Everus Construction Group presently sports a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 42.7%, on average. ECG stock has jumped 16.7% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for ECG’s 2025 sales and EPS indicates growth of 18% and 3.9%, respectively, from the year-ago period’s levels.

Tutor Perini sports a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 387.2%, on average. Tutor Perini's stock has jumped 145.1% year to date.

The Zacks Consensus Estimate for Tutor Perini’s 2025 sales and EPS indicates growth of 21.2% and 220.8%, respectively, from the prior-year levels.

Great Lakes Dredge & Dock flaunts a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 45.3%, on average. Great Lakes Dredge & Dock stock has gained 2.8% year to date.

The Zacks Consensus Estimate for Great Lakes Dredge & Dock’s 2025 sales and EPS indicates growth of 9% and 21.4%, respectively, from the prior-year levels.

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This article originally published on Zacks Investment Research (zacks.com).

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