Is AZEK's Q2 2025 EPS forecast optimistic?

**AZEK's Q2 2025 EPS forecast is optimistic** for several reasons: 1. **Residential Segment Growth**: The Residential segment has shown strong growth, with a 22% year-over-year increase in net sales in Q1 2025, driven by double-digit sell-through rates across decking, rail, and accessories. This trend is indicative of robust demand and suggests that the growth momentum could continue into Q2 2025. 2. **New Product Launches**: AZEK has launched new products like TimberTech Fulton Rail, TimberTech Reliance Rail, Versatex XCEED Siding, and TrimLogic, which are expected to address diverse price points and drive further wood conversion. These new products are likely to contribute to growth in the coming quarters, including Q2 2025. 3. **Distribution Partnerships**: The company has expanded distribution partnerships in Western U.S. and Canadian markets, positioning it to serve pro contractors more effectively. These partnerships are expected to support continued growth in the Residential segment. 4. **FY25 Guidance**: AZEK has raised its FY25 guidance, expecting consolidated net sales to grow by 5%-8% year-over-year, with adjusted EBITDA growth projected at 6%-10%. The Q2 2025 guidance includes consolidated net sales of $437 million to $448 million, reflecting 4%-7% year-over-year growth and adjusted EBITDA of $115 million to $120 million. These figures suggest a positive outlook for the company's financial performance in Q2 2025. 5. **Market Conditions**: Despite facing some challenges in the Commercial segment, the broader housing and repair and remodel markets remain uncertain, which could impact future performance. However, the strong growth in the Residential segment is expected to more than offset any potential headwinds. In conclusion, AZEK's Q2 2025 EPS forecast is based on strong performance in the Residential segment, new product launches, strategic distribution partnerships, and an optimistic FY25 guidance. These factors collectively support the view that the forecast is optimistic.