Allegion’s Cash Flow Improves, but Core Growth Remains Modest

Allegion returned 6.4% since April, trailing the S&P 500’s 16.6% gain, according to an Oct. 1 StockStory analysis. As of 16:54 UTC that day, shares traded at $152.47, down 0.85% since the previous close.

StockStory highlighted Allegion’s average operating margin of 19.8% over the past five years. The publisher also said the company’s free cash flow margin rose by 6.1 percentage points over that period, reaching 15.6% for the trailing 12 months.

The analysis described the cash-flow improvement as a sign that Allegion had become less capital-intensive. It also noted that organic revenue, which excludes acquisitions, divestitures and currency effects, averaged 4.1% annual growth over the past two years.

StockStory called that growth rate underwhelming and said Allegion may need to improve its products, pricing or sales approach. The analysis concluded that the company’s strengths outweighed its weaknesses, citing a forward price-to-earnings ratio of 16.5 at the article’s stated share price of $153.33.