Is Owens Corning’s Slump a Chance for Investors After Housing Market Concerns?
December 6, 2025
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Wondering if Owens Corning is a bargain after its rough year, or if the market sees something you do not? Let us cut through the noise and get straight to what the current price really implies.
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The stock has slipped to around $113.63, barely up over the last week and month at 0.3% and 2.3%, while still down a steep 32.9% year to date and 42.6% over the last year, even though it is up 29.1% over 3 years and 66.1% over 5 years.
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Recent headlines have focused on shifting expectations around US housing and construction activity, along with ongoing attention on infrastructure and energy efficiency spending. All of these trends directly affect demand for Owens Corning’s roofing, insulation, and composites. At the same time, investors have been reassessing how cyclical building product companies should be priced as interest rates stay higher for longer and project pipelines adjust.
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On our checks, Owens Corning scores a solid 5 out of 6 for being undervalued, which suggests the current market pessimism might be overdone. Next, we will walk through each valuation lens and then finish with a more holistic way to think about what the stock is truly worth.
Find out why Owens Corning’s -42.6% return over the last year is lagging behind its peers.
The Discounted Cash Flow model estimates what a company is worth by projecting its future cash flows and then discounting them back to today, so we can compare that value to the current share price.
Owens Corning generated last twelve months Free Cash Flow of about $1.16 billion, a strong base from which analysts and our model project future cash generation. Using a 2 Stage Free Cash Flow to Equity approach, analyst forecasts and extrapolated estimates see FCF moderating from around $0.92 billion in 2026 to roughly $0.89 billion by 2035, all in dollars. Simply Wall St extends analyst expectations beyond the typical 5 year window to build a full 10 year cash flow path.
When these projected cash flows are discounted back to today, the estimated intrinsic value comes out at roughly $129.87 per share, implying the stock is about 12.5% undervalued versus the current market price near $113.63.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Owens Corning is undervalued by 12.5%. Track this in your watchlist or portfolio, or discover 906 more undervalued stocks based on cash flows.
For a company like Owens Corning, which operates in a cyclical, capital intensive sector, the Price to Sales ratio is a useful way to judge valuation because it focuses on how much investors are paying for each dollar of revenue, regardless of short term earnings swings.
In general, faster and more predictable growth, stronger margins, and lower risk justify a higher multiple. More volatile or slower growing businesses tend to warrant a lower, more conservative range. Owens Corning currently trades on a Price to Sales ratio of about 0.80x, which is below both the Building industry average of roughly 1.66x and the broader peer group around 4.39x.
Simply Wall St’s proprietary Fair Ratio framework estimates what a reasonable Price to Sales multiple could be, given Owens Corning’s growth outlook, profitability, risk profile, size, and industry position. It arrives at about 1.27x. This approach is more tailored than a simple comparison to peers or the sector because it adjusts for company specific strengths and risks. Comparing the Fair Ratio of 1.27x with the current 0.80x indicates that the market is still applying a meaningful discount to the shares.
Result: UNDERVALUED
PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1442 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply clear, written explanations of your view on a company that connect the story you believe in with the numbers you use, such as future revenue, earnings, margins, and ultimately the fair value you think is reasonable.
A Narrative links three things together in a straight line: what you think is happening in the business and its industry, how that flows through to a financial forecast, and what that implies for a fair value you can compare with today’s share price to decide whether to buy, hold, or sell.
On Simply Wall St, Narratives are built into the Community page and are designed to be easy to read and easy to use. They update dynamically as new information comes in, for example after earnings releases or major news that might change the outlook.
For Owens Corning, one investor Narrative might lean toward the higher fair value end, closer to 210 dollars, based on confidence in margin expansion and buybacks. Another might anchor near 157 dollars, stressing construction cyclicality and competitive pressure. Narratives let you see, compare, and refine these perspectives for yourself.
Do you think there’s more to the story for Owens Corning? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include OC.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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