Over the last six months, Janus’s shares have sunk to $6.80, producing a disappointing 13.9% loss - a stark contrast to the S&P 500’s 13.9% gain. This was partly driven by its softer quarterly results and might have investors contemplating their next move.

Is there a buying opportunity in Janus, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free for active Edge members.

Why Is Janus Not Exciting?

Even though the stock has become cheaper, we're sitting this one out for now. Here are three reasons we avoid JBI and a stock we'd rather own.

1. Core Business Falling Behind as Demand Declines

Investors interested in Commercial Building Products companies should track organic revenue in addition to reported revenue. This metric gives visibility into Janus’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.

Over the last two years, Janus’s organic revenue averaged 4.7% year-on-year declines. This performance was underwhelming and implies it may need to improve its products, pricing, or go-to-market strategy. It also suggests Janus might have to lean into acquisitions to grow, which isn’t ideal because M&A can be expensive and risky (integrations often disrupt focus).

2. Revenue Projections Show Stormy Skies Ahead

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Janus’s revenue to drop by 1.2%. While this projection is better than its two-year trend, it’s tough to feel optimistic about a company facing demand difficulties.

3. EPS Trending Down

We track the change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

Janus’s full-year EPS dropped 79.7%, or 21.6% annually, over the last three years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, Janus’s low margin of safety could leave its stock price susceptible to large downswings.

Final Judgment

Janus’s business quality ultimately falls short of our standards. After the recent drawdown, the stock trades at 10.9× forward P/E (or $6.80 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. We're fairly confident there are better stocks to buy right now. Let us point you toward the Amazon and PayPal of Latin America.

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