Tecnoglass: Vinyl Windows Have More Than Doubled Sales Potential in the $26 Billion Market - big-Picture Breakout Started!

Tecnoglass (TGLS), a leading supplier of architectural glass and windows, relocated its headquarters to the USA, where 95% of its revenue is generated, only last quarter. Despite higher mortgage interest rates, the core business with single-family homes in key markets with high population growth remains stable. This grew again last year from $306 million to $335 million. In 2020, this was only $71 million. However, the company also serves multi-family homes as well as hotels, offices, schools, hospitals, banks and airports. In this context, 85% of revenue is "green revenue" in connection with sustainability and climate protection, as the glass on offer can significantly reduce heating and cooling costs, for example.

All products are aimed at a $40 billion US market. In the $26 billion US market for architectural windows in particular, sales potential has more than doubled with vinyl windows, which have a market penetration of 63%. First deliveries of the now 3 US production lines were started in December, with orders expected to increase significantly in the second quarter following initial tests by customers. On April 9, B. Riley rewarded these developments with a price target increase from $51 to $65 (Buy).

Although Q4 was disappointing with a decline in sales of just under 8%, a 20% higher order backlog with a record $870.1 million was convincing. Tecnoglass aims to gain further market share and achieve double-digit growth in 2024. The growth check currently has the highest score of 15 points. A P/E ratio of 15 signals an attractive valuation. The big-picture breakout has already started, although increasing hopes of interest rate cuts by the Fed could provide a further tailwind.

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