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PGT Innovations' (PGTI) New Keyless-Entry Lock to Aid Sales

Zacks Equity Research

PGT Innovations, Inc.’s PGTI brand WinDoor has unveiled an impact-resistance, multi-point lock and smart-tech keyless-entry front door lock collection.

The collection features electronic smart-lock technology that will be controlled by touch-to-open Bluetooth technology, similar to an app on a smartphone or a key fob. The multiple bolts within the lock will secure the door panel into the frame when activated.

The Bluetooth technology will make it easy for homeowners to remotely lock and unlock a door when in range. Also, it allows them to share and withdraw authorization to access to their home with eKeys.

Product Innovation to Drive PGT Innovations’ Top-Line Growth

PGT Innovations, the nation’s leading impact-resistant windows and doors manufacturer and supplier, banks on innovation and expansion to drive growth. The company is dedicated toward designing and engineering new and innovative products that transform the way people live, thereby helping it to generate higher revenues. Within the window and door industry, the company has exclusive rights to use the hardware on impact-resistant products.

Within the Southeast business, WinDoor consistently delivers high-performance, impact-resistant windows and doors, thereby accomplishing homeowners’ desires. Notably, the recent innovation positions WinDoor as the first and only brand in the industry to provide this luxury and smart front door locking system.

In first-quarter 2019, the company’s net sales increased 23.9% year over year, backed by improved results across the markets served and the recent acquisition of Western Windows Systems (“WWS”). Particularly, its Impact-resistant window and door products within the Southeast unit generated net revenues of $120.7 million, contributing approximately 70% to total net revenues.

Our Take

We believe that the recent move will further help PGT Innovations to retain its competitive position over peers. Markedly, on Jun 11, 2019, the company unveiled 1,920 square foot multi-brand showroom in its own manufacturing facility in Hialeah, FL, in a bid to enhance presence and innovation. Again, during the first quarter, it launched the Western 3700 series vinyl door, as part of innovation.

Coming to price performance, shares of PGT Innovations have declined 0.6% against its industry’s 24.7% growth on a year-to-date basis. The company has been witnessing softness in the repair and remodeling market over the last few quarters. Also, it is experiencing lower demand in a few markets served.

Nonetheless, the company remains confident to deliver improved results going forward, backed by improving overall construction market and the WWS acquisition. In 2019, it expects to generate net sales growth of 11-15% year over year and adjusted EBITDA improvement of 13-20%. The company projects earnings for the current year within 93 cents to $1.05 per share.

Zacks Rank & Key Picks

Currently, PGT Innovations carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include Armstrong World Industries, Inc. AWI, Arcosa, Inc. ACA and Construction Partners, Inc. ROAD, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Armstrong World, Arcosa and Construction Partners have a three-five year earnings growth rate of 19%, 12.6%, and 10%, respectively.

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