Carlisle currently trades at $386.55 per share and has shown little upside over the past six months, posting a small loss of 4.3%. The stock also fell short of the S&P 500’s 11.7% gain during that period.
Is there a buying opportunity in Carlisle, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free.
Why Is Carlisle Not Exciting?
We’re cautious about Carlisle. Here are three reasons why there are better opportunities than CSL, plus one stock we’d rather own.
1. Core Business Falling Behind as Demand Declines
In addition to reported revenue, organic revenue is a useful data point for analyzing Building Materials companies. This metric gives visibility into Carlisle’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, Carlisle’s organic revenue averaged 1.2% 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 Carlisle 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. Projected Revenue Growth Is Slim
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 Carlisle’s revenue to rise by 6.4%. While this projection implies its newer products and services will catalyze better top-line performance, it is still below average for the sector.
3. Recent EPS Growth Below Our Standards
Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.
Carlisle’s weak 3.6% annual EPS growth over the last two years aligns with its revenue trend. This tells us it maintained its per-share profitability as it expanded.
Final Judgment
Carlisle isn’t a terrible business, but it doesn’t pass our bar. With its shares lagging the market recently, the stock trades at 17× forward P/E (or $386.55 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. We’re pretty confident there are more exciting stocks to buy at the moment. Let us point you toward the most entrenched endpoint security platform on the market.
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