Since August 2025, Owens Corning has been in a holding pattern, posting a small loss of 2.8% while floating around $137.98. The stock also fell short of the S&P 500’s 9.1% gain during that period.
Is there a buying opportunity in Owens Corning, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Do We Think Owens Corning Will Underperform?
We're cautious about Owens Corning. Here are three reasons we avoid OC and a stock we'd rather own.
1. Core Business Falling Behind as Demand Declines
Investors interested in Home Construction Materials companies should track organic revenue in addition to reported revenue. This metric gives visibility into Owens Corning’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, Owens Corning’s organic revenue averaged 3.3% 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 Owens Corning 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. Shrinking Operating Margin
Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.
Analyzing the trend in its profitability, Owens Corning’s operating margin decreased by 13.6 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Its operating margin for the trailing 12 months was 3.2%.
3. New Investments Fail to Bear Fruit as ROIC Declines
A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity).
We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, Owens Corning’s ROIC has unfortunately decreased significantly. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities.
Final Judgment
Owens Corning doesn’t pass our quality test. With its shares trailing the market in recent months, the stock trades at 13.9× forward P/E (or $137.98 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. There are more exciting stocks to buy at the moment. We’d suggest looking at our favorite semiconductor picks and shovels play.
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