Carlisle trades at $329.74 per share and has stayed right on track with the overall market, gaining 7.6% over the last six months. At the same time, the S&P 500 has returned 9.9%.
Is now the time to buy Carlisle, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is Carlisle Not Exciting?
We don't have much confidence in Carlisle. Here are three reasons there are better opportunities than CSL and a stock we'd rather own.
1. Core Business Falling Behind as Demand Declines
We can better understand Building Materials companies by analyzing their organic revenue. 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 1.1% 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 4.7%. While this projection indicates its newer products and services will fuel better top-line performance, it is still below the sector average.
3. Recent EPS Growth Below Our Standards
While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.
Carlisle’s EPS grew at an unimpressive 4.6% compounded annual growth rate over the last two years. On the bright side, this performance was higher than its 1.9% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.
Final Judgment
Carlisle isn’t a terrible business, but it isn’t one of our picks. That said, the stock currently trades at 16.4× forward P/E (or $329.74 per share). While this valuation is reasonable, we don’t really see a big opportunity at the moment. We're fairly confident there are better investments elsewhere. Let us point you toward one of our all-time favorite software stocks.
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