VULCAN MATERIALS COMPANY (VMC): what the price requires
At today's price, VULCAN MATERIALS COMPANY (VMC) is priced for today's economics sustained for ~5.3 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/VMC
Headline
| Field | Value |
|---|---|
| Ticker | VMC |
| Company | VULCAN MATERIALS COMPANY |
| Current price | $291.82/sh |
| Composition | Aggregates 73% / Asphalt 16% / Concrete 11% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 23.6% |
| Operating margin today | 19.3% |
| Margin expansion implied | +4.3pp |
| Must persist for | 5.3y |
| Multiple paid | 30x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 8.8% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.8 years.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | +0.39σ |
| cohort percentile (of 76 peers) | 84 |
| sustained it ~5.3 years at this level | 32% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.67x | 4 | expensive |
| Earnings | 5.06x | 5 | expensive |
| Relative | 1.69x | 5 | expensive |
| Growth | 1.21x | 3 | expensive |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.3%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $181.24 | 1.61x | yes | FCF base $1.1B, growth 7% (input: historical growth), terminal g 4.0%, WACC 8.3%, 5yr projection |
| DCF Exit Multiple | Growth | $286.42 | 1.02x | yes | Exit EV/EBITDA: 13.1x / 18.1x / 23.1x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $173.13 | 1.69x | yes | P/E 20.12x (blended: static sector reference 14x + trailing (TTM) 34x), scenarios: 15.1x / 20.1x / 24.1x (bear / base = reference held flat / bull), EV/EBITDA 11.03x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $91.74 | 3.18x | yes | BV/sh $64.42, ROE (TTM) 13.2%, ke 9.3% |
| Two-Stage Excess Return | Asset | $108.52 | 2.69x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $240.63 | 1.21x | yes | Rev $8.1B, growth 7% (input: historical growth; tapered), Terminal P/S: 3.6x / 4.7x / 5.7x (bear / base = today's held flat / bull, cap 6x) |
| Peter Lynch Fair Value | Relative | $212.94 | 1.37x | yes | EPS $8.40, growth 25% (input: historical EPS growth), PEG=1.36 (Fair) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $57.63 | 5.06x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.31B × (1−22%) / WACC 8.3% → EPV (no growth) |
| Residual Income | Asset | $112.11 | 2.60x | yes | BV $64.42 + 5yr PV of (ROE (TTM) 13.2% − Kₑ 9.3%) × BV; BV grows 8.6%/yr |
| Graham Number | Asset | $110.34 | 2.64x | yes | √(22.5 × EPS $8.40 × BVPS $64.42) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $107.75 | 2.71x | yes | EBITDA $2.39B × sector EV/EBITDA 8.0x |
| FCF Yield | Earnings | $53.95 | 5.41x | yes | FCF $1116.4M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $48.62 | 6.00x | yes | SBC-adj FCF $1.05B (FCF $1.12B − SBC $0.06B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $271.04 | 1.08x | yes | EPS $8.40 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $12.09 | 24.14x | yes | BV $64.42 × (ROIC 1.5% / WACC 8.3%) (excluded from median) |
| P/Sales Sector | Relative | $92.18 | 3.17x | yes | Revenue $8.06B × sector P/S 1.5x |
| PEG Fair Value | Relative | $315.00 | 0.93x | yes | EPS $8.40 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $90.81 | 3.21x | yes | EPS $8.40 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $5.8b |
| Net debt / NOPAT (after-tax) | 4.94x |
| Net debt / operating income (pre-tax) | 3.87x |
| Interest coverage | 6.6x |
| Share count CAGR (buyback) | -0.5% |
| Burning cash | no |
Bullet Takeaways
- Vulcan is the largest US producer of construction aggregates, with crushed stone, sand and gravel at about 73% of the business and asphalt and concrete making up the rest. Q1 2026 revenue rose 7% to $1.76 billion, EPS of $1.35 beat the $1.12 consensus by more than 20%, and gross margin expanded 180 basis points to 24.1%.
- The franchise is a pricing machine. Aggregates shipped 50.0 million tons at a freight-adjusted price of $22.80 a ton, and full-year guidance calls for 4% to 6% pricing growth on top of low-single-digit volume growth, with adjusted EBITDA guided to $2.4 to $2.6 billion.
- The price asks a lot for that quality. At $302.81 the market is paying about 31 times operating income, which embeds operating growth held at its self-funding ceiling for roughly six years. The business is excellent; the question is whether even an excellent aggregates franchise grows fast enough, for long enough, to justify the multiple.
Bull Case
Start with what the market is pricing in, then set it against the fundamentals, because for Vulcan the gap is smaller than the headline multiple suggests. The price embeds operating growth at the company's self-funding ceiling for about six years, which sounds aggressive until you look at the pricing engine underneath. Aggregates are the closest thing in industrials to a local monopoly: rock is heavy and cheap relative to the cost of moving it, so a quarry effectively owns the customers within trucking distance. Vulcan's own 10-K makes the point that each operation is defined by its location within a local market and its particular geology, and that intersegment rock is transferred at local market prices. That is the language of a business that sets price locally rather than competing it away.
The fundamentals are delivering exactly what the price needs. Q1 2026 revenue rose 7% to $1.76 billion, EPS of $1.35 beat by more than 20%, and gross margin expanded 180 basis points to 24.1%, while aggregates moved 50.0 million tons at a freight-adjusted $22.80 a ton. Crucially, the growth is price-led: full-year guidance is for 4% to 6% pricing growth against just 1% to 3% volume growth, which combined with disciplined unit costs should push high-single-digit growth in cash gross profit per ton. Pricing that runs ahead of volume is the most durable kind of growth a cyclical can have, because it does not depend on the construction cycle cooperating every year.
The demand backdrop extends the runway. Public construction remains strong on infrastructure funding, private demand is improving, and a new structural driver has arrived: data-center construction, with roughly 650 million square feet under way or announced, is aggregates-intensive. Vulcan is positioned to capture it, with about 60% of all large public and private projects sitting within 50 miles of a Vulcan facility. With interest covered about seven times and a share count that has slowly shrunk, the company can fund its growth and still return cash. The analyst consensus is a buy, the average target sits around the current price with high-end targets near $355, and the bull case is that a near-monopoly pricing franchise with a lengthening demand runway earns the premium the market is paying.
Bear Case
The cleanest bear argument is about capital allocation and the price of growth, because Vulcan has built its scale partly by buying it. The aggregates leaders grow by acquiring quarries and reserves, and doing so has left Vulcan with net debt of about $5.8 billion, roughly 3.5 times trailing operating income. That is manageable while the cycle is strong and interest is covered seven times, but it is real leverage on a cyclical business, and it means a chunk of the franchise's value was paid for at acquisition multiples that the company now has to earn back through pricing. When management is buying reserves and the stock trades at 31 times operating income, every capital decision, whether to acquire, to buy back stock near record prices, or to deleverage, has to clear a high bar to add value rather than simply chase scale.
The valuation itself is the harder problem. At 31 times operating income the price embeds growth at the self-funding ceiling for about six years, and the earnings-power family in the X-ray lands at roughly a fifth of the price. That is an enormous gap for a business whose growth ultimately rests on pricing 4% to 6% a year. Aggregates pricing has been remarkable, but it is not guaranteed to continue at that pace forever, and the sector is already showing cracks in confidence: peer Martin Marietta was downgraded on narrowing aggregate price realization and moderating infrastructure bid activity, and analysts have trimmed its fair-value estimate on more conservative growth and margin assumptions. The same questions apply to Vulcan, and 42% of analysts already sit on hold.
Finally, the volume side is cyclical no matter how good the pricing is. Guidance assumes only 1% to 3% volume growth, and that rests on public construction funding staying robust and private and residential demand recovering. A pullback in infrastructure spending, a higher-for-longer rate environment that delays private projects, or a softer data-center build than the 650-million-square-foot pipeline implies would slow volumes just as the price is counting on a long, smooth growth runway. Pay a peak-quality multiple on a cyclical, and the downside is that both the multiple and the volumes compress at the same time, which is precisely when the leverage stops being a footnote.
Valuation
Vulcan is a textbook case of a high-quality business priced for a long, uninterrupted run. At $302.81 (June 28, 2026) the market is paying about 31 times company-wide operating income, which under an 8.9% cost of capital solves to operating growth held at the self-funding ceiling for roughly six years. That spread is the signature of a durability premium, the market paying for compounding that the snapshot methods structurally cannot capture.
The premium is not irrational given what aggregates are. A 20.6% operating margin, guided pricing of 4% to 6% a year, and a near-captive position in each local market are the kind of economics that justify a multiple well above a typical cyclical. The reliability on this solve is reasonable. One measurement note belongs in view: the trailing operating income diverges by more than 10% across the two bases here, about $1.66 billion on the EDGAR basis versus $1.45 billion on the record basis, so the precise multiple depends on which trailing window you use; neither is wrong, they are different bases.
The honest read is that the entry price already capitalizes the pricing franchise close to perfection. The implied six-year run at the growth ceiling leaves little margin for a pricing slowdown or a volume air pocket, and the sector's own messengers, with a peer downgraded on narrowing price realization, suggest the pricing tailwind may be maturing. The analyst consensus captures the tension: a buy rating with an average target around the current price and a high end near $355, but with 42% of analysts on hold. The conclusion is that you are paying full price for a genuinely excellent business, so the return depends on the pricing engine running for as long as the multiple assumes rather than on any discount at entry.
Catalysts
The recurring catalyst is aggregates pricing and volume. Q1 2026 set the pace: revenue up 7% to $1.76 billion, EPS of $1.35 beating consensus by more than 20%, gross margin up 180 basis points to 24.1%, and 50.0 million tons shipped at a freight-adjusted $22.80 a ton. Full-year guidance, reaffirmed, calls for 4% to 6% pricing growth on 1% to 3% volume growth, with adjusted EBITDA of $2.4 to $2.6 billion. Each quarter's price realization is the single most important number, because the whole valuation rests on pricing continuing at that pace.
Demand drivers are the medium-term swing factor. Public construction funded by infrastructure programs and a recovering private market underpin the volume guide, and a newer structural driver, data-center construction with roughly 650 million square feet under way or announced, is a potential tailwind given that about 60% of large projects sit within 50 miles of a Vulcan facility. Watch infrastructure bid activity and the pace of the data-center build, since both feed the volume side that the cycle ultimately controls.
Sector sentiment and capital allocation round out the picture. The analyst consensus is a buy with an average target near the current price and a high end around $355, but a meaningful share sits on hold, and the peer read matters: Martin Marietta was downgraded on narrowing aggregate price realization, a warning that applies sector-wide. On capital, watch how management balances acquisitions, buybacks near record prices, and deleveraging against the roughly 3.5-times operating-income net debt, since at this multiple those choices move per-share value.
Peer Cohorts (Per Segment, With Filing Citations)
Aggregates 1 / Asphalt 2 (reported)
- MLM (MARTIN MARIETTA MATERIALS INC)
- (no filing in the citation store)
- KNF (Knife River Corporation)
- (no filing in the citation store)
- AMRZ (Amrize Ltd)
- (no filing in the citation store)
- CRH (CRH public limited company)
- (no filing in the citation store)
- EXP (EAGLE MATERIALS INC.)
- (no filing in the citation store)
Concrete (reported)
- MLM (MARTIN MARIETTA MATERIALS INC)
- (no filing in the citation store)
- CRH (CRH public limited company)
- (no filing in the citation store)
- EXP (EAGLE MATERIALS INC.)
- (no filing in the citation store)
- KNF (Knife River Corporation)
- (no filing in the citation store)
- AMRZ (Amrize Ltd)
- (no filing in the citation store)
- MDU (MDU RESOURCES GROUP, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.