Can AZEK sustain its EPS growth trend?

**AZEK's ability to sustain its EPS growth trend is uncertain based on the current data and market conditions.** Here's an analysis to support this view:

1. **Recent Performance and Trends**:
- AZEK's most recent fiscal quarter ended on March 31, 2025, with a diluted EPS of $0.12, marking a significant year-over-year decline of -29.41%.
- The company is expected to report a year-over-year decline in earnings on lower revenues when it releases its Q4 2024 earnings report.
2. **Economic and Market Conditions**:
- The composite decking industry, in which AZEK operates, is likely to be affected by broader economic factors such as housing market trends, consumer spending, and environmental regulations.
- The merger with James Hardie is a significant strategic move that could potentially impact AZEK's financial performance and its ability to sustain EPS growth.
3. **Financial Health and Outlook**:
- Despite the expected earnings decline, AZEK has been maintaining a good financial health score, with a solid market position and consistent performance in the composite decking industry.
- The company's gross profit margin is healthy at 37.34%, and it has a current ratio of 2.56, indicating strong liquidity.
4. **Analyst Expectations and Ratings**:
- Analysts have upgraded AZEK to a Zacks Rank #2 (Buy), reflecting optimism about its earnings outlook and the potential for stock price increase.
- However, the consensus EPS estimate for the upcoming quarter has been revised lower, suggesting a cautious outlook.
5. **Growth Prospects and Risks**:
- AZEK is expected to see an EPS growth of 20.9% this year, which is above the industry average.
- The company's growth prospects are tied to its ability to sustain its market position, manage operational efficiencies, and capitalize on strategic initiatives like the merger.

In conclusion, while AZEK has a strong financial foundation and positive growth indicators, the sustainability of its EPS growth trend will depend on various internal and external factors, including market conditions, competitive dynamics, and the successful integration of the James Hardie merger. Investors should monitor these factors closely to assess AZEK's future earnings potential.