Is AZEK's commercial segment recovering in 2024?

**AZEK's commercial segment is not currently forming a recovery trend in 2024.** Here's an analysis based on the latest data and market conditions:

1. **Performance of the Commercial Segment**:
- The commercial segment of AZEK experienced a significant decline in net sales, with a 49% year-over-year decline reported in the Q3 2024 earnings call. This indicates a substantial challenge for the segment.
- The net income and diluted EPS growth rates for the commercial segment are negative, with a -27.93% net income YoY growth and no corresponding revenue growth reported. This suggests that the segment is not only experiencing a decline in sales but also facing pressure on profitability.

|code|Ticker|Name|Date|Total Revenue|Net Income|Diluted EPS|market_code|
|---|---|---|---|---|---|---|---|
|AZEK|AZEK.N|AZEK|2024 Q2|4.18408E8|4.9758E7|0.34|169|
|AZEK|AZEK.N|AZEK|2024 Q3|4.34369E8|5.011E7|0.34|169|
|AZEK|AZEK.N|AZEK|2024 Q4|3.48227E8|2.8363E7||169|
|AZEK|AZEK.N|AZEK|2025 Q1|2.85429E8|1.8124E7|0.12|169|

|code|Ticker|Name|Date|Net Income YoY|Total Revenue YoY|Diluted EPS YoY|market_code|
|---|---|---|---|---|---|---|---|
|AZEK|AZEK.N|AZEK|2024 Q2|173.02057613168725|10.780212448238247|183.33333333333337|169|
|AZEK|AZEK.N|AZEK|2024 Q3|44.659353348729795|12.079896169040104|47.82608695652174|169|
|AZEK|AZEK.N|AZEK|2024 Q4|-27.702582141673677|-10.438206639712766||169|
|AZEK|AZEK.N|AZEK|2025 Q1|-27.93065054875139|18.70913809452513|-29.41176470588236|169|

2. **Market Factors Influencing Performance**:
- The decline in the commercial segment's performance is attributed to the sale of the Vycom business. This strategic decision has had a negative impact on the segment's sales and profitability.
- The company has noted regional softness in the exteriors business, particularly in the Northeast, which could further contribute to the decline in the commercial segment's performance.
3. **Strategic Initiatives and Future Outlook**:
- Despite the challenges, AZEK has outlined strategic initiatives for future market expansion, including new product launches and channel expansion. These initiatives may help the commercial segment recover in the future.
- The company's financial results for the third quarter of fiscal 2024 show a consolidated net sales increase of 12% year-over-year, with an 18% increase excluding the divested Vycom business. This indicates a positive trend in the residential segment, which may provide some support to the overall company performance.

In conclusion, while AZEK's commercial segment is facing significant headwinds in 2024, the company's overall performance is showing some positive signs, such as increased net sales and margin expansion in the residential segment. The success of future strategic initiatives and market conditions will be crucial in determining the segment's recovery trajectory.